The gap between the number of international visitors in London and the spending associated with them widened in the final quarter of last year, sparking calls for the government to reinstate tax-free shopping.
Visitor numbers in the capital in the last three months of 2023 were level with that in 2019, however, spending was down by 15%, according to data by the New West End Company (NWEC).
Last year, spending plunged 19%, while visitors were down 4% from the pre-pandemic levels.
NWEC said the data “add weight to the calls from businesses to remove the tourist tax, which is responsible for a reduced propensity to spend among tourists”.
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The group’s chief executive Dee Corsi said: “The data is clear. The return of tax-free shopping would encourage [tourists] to spend more in our city and boost its economy at a time when domestic shoppers are keeping their belts tightened.”
The fresh figures follow the news that chancellor Jeremy Hunt had asked the Office for Budget Responsibility to review the costs and benefits of reinstating the shopping scheme for overseas tourists, which was scrapped in 2020.
Corsi said the news was “an opportunity that should be grabbed with both hands”.
“A return to tax-free shopping would have a net positive effect on tax revenues and make British businesses competitive once more,” she added.
Last month, data from the Centre for Economics and Business Research (CEBR) revealed that ditching tax-free shopping for tourists is costing the UK £11.1bn and deterring around 2m foreign visitors per year.
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