Fewer overseas tourists are visiting US and it hurts Macy's sales too
Business
In complete contrast, things are booming in France – the world’s most visited country
NEW YORK (Reuters/Web Desk) – Macy's is the latest major retail chain to disclose that significantly fewer overseas tourists in the United States are hurting overall sales, says Reuters.
It is in complete contrast to what is happening in France, the most visited country of the world, which saw the foreign tourists bringing in a record of 58 billion euros to France in 2022, according to figures released by the French Tourism Development Agency, Atout France.
International tourism receipts in France were up by 1.2 billion euros at the end of December 2022 compared to their 2019 level, the agency had reported.
In fact, France also saw international tourism revenue rose by 21 per cent over the first four months of the year compared with 2019.
According to the Reuters, international visitors now account for less than 2pc of Macy’s sales, compared to 3pc-4pc prior to the COVID-19 pandemic, CEO Jeff Gennette told investors on Tuesday during a post-earnings conference call. Macy's net sales in the quarter were $5 billion, down 8pc compared to the same period last year.
Macy’s is among the retailers that have spent big on flagship locations in a bid to attract high-spending visitors. The company in 2021 announced that it would invest $235 million in its Herald Square flagship, including improvements to nearby subway station entrances and an expanded pedestrian plaza.
Luxury behemoth LVMH also invested heavily in its recently reopened Tiffany & Co flagship store on the corner of Fifth Avenue and East 57th Street, although the company declined to disclose how much it spent on the renovation. The store accounted for 10pc of Tiffany's global sales before it closed for construction in 2019.
Tourism in the United States is still lagging pre-pandemic levels.
According to the US Travel Association, overseas visits dropped slightly in June to 2.6 million and remained 27pc below 2019 levels. Travel to New York City was also lower in 2022 compared to 2019, although visits are forecast to reach 63.3 million in 2023 and surpass pre-pandemic levels by 2024, according to the New York City Tourism and Conventions bureau.
Tourist visits to New York from Western European countries including France and the United Kingdom have significantly rebounded as of 2022, as have visits from Canada, the organization reported in March. Chinese tourists, key drivers of luxury purchasing, are returning at a slower pace than other visitors.
While overall global travel has rebounded in a big way since the end of COVID-19 restrictions, travelers are not spending as much on goods and instead are splurging on sporting events or concert tickets in new destinations.
Tourist spending on experiences like restaurants, amusement parks and nightclubs globally was up 65pc in March 2023, the most recent month for which data is available, from March 2019, before the pandemic, according to Mastercard's Travel Industry Trends 2023 report. But spending by travelers on goods like cosmetics, jewelry and electronics is up just 12pc, the report said.
THE FRENCH AFFAIR
On the hand, things are returning to normal for France which is set to be the most visited country in the world, according to GlobalData, which estimates that the country will attract 93.7 million international travelers by 2025.
During the first quarter of the current year, France’s tourism sector continued a strong rebound as overnight stays in hotels and other short-term accommodations rose 12.6pc in Q1 2023 compared to the same period one year ago.
The National Institute for Statistics (INSEE) said tourism was boosted by a strong increase in visitors from the UK. Overnight stays by British tourists rose 102.5pc, compared to an increase of 62.3pc for Americans 41.7pc for Germans and 9.7pc for Dutch.
