Americans are flocking to certain European major cities for holiday shopping, taking advantage of the strong dollar. Spending by American tourists in the region rose more than 40% during the week of Black Friday compared with the same period in 2019, before the pandemic, according to value-added-tax refund data from payments company Planet.
The average transaction amount by U.S. tourists in European stores this year—at 1,244 euros, equivalent to $1,313, according to Planet—is also significantly higher than €500 in 2019.
According to Bank of America, very strong demand from US luxury customers was the biggest positive tailwind in 2021, also it has continued in 2022 despite a more complex macroeconomic backdrop.
Higher costs in energy, fuel, borrowing and general costs of living, have not curbed American appetites for luxury, so the boost will be very welcome to Europe’s luxury houses, who are yet to see a rebound from Chinese customers since the pandemic.
Sales to local Europeans remains more challenging, with inflation soaring and consumer confidence ebbing to all-time lows.
European prices after tax refunds can be as much as 20 percent cheaper for the same luxury items in the U.S.
According to Bain & Co., “The luxury market continued to perform strongly throughout this year to date, with winners for brands across the board, and positive growth for some 95 percent of brands.”
However, all luxury categories have now recovered to 2019 levels or better, with hard luxury, leather and apparel leading the resurgence following the pandemic.