As the festive season approaches, excitement is building in London’s West End. Oxford Street’s iconic lights will shine from 5th November, and Liberty’s famed advent calendar is already catching eyes. For businesses across the district, this is the most crucial trading period of the year — especially for retail, hospitality, and leisure.
The outlook is promising. , reflecting a 3.2% growth over the same period in 2023. A key driver behind this growth is international tourism, with international spending in the West End forecast to increase by 5.8% year-on-year this festive season.
This follows a strong recovery for UK tourism in general, with 2024 expected to welcome over . However, despite the growing number of visitors, we are not fully tapping into tourism’s economic potential —an estimated £220 million in unrealised sales, despite an increase in international visitors to London.
So, what’s holding us back? A significant factor is the removal of tax-free shopping in the UK. VAT refunds in continental Europe surged by 36% in the six months up to June compared to the same period five years ago, while the UK has become less attractive for luxury shoppers. With Brexit, Brits can now shop tax-free in Europe – but international visitors coming to London no longer have access to the same benefit. This has turned into a clear disadvantage for British retailers right across the country.
The impact of this policy is not just theoretical. —including retail, hospitality, and leisure businesses — revealed that the absence of tax-free shopping has affected more West End businesses than inflation or the cost-of-living crisis. As a result, many are reconsidering staffing levels and scaling back future investments in the UK.
Inbound tourism plays an essential role in driving economic growth, and the upcoming festive season is a prime opportunity to capture this spending. But if we want to keep pace with our European neighbours, the UK must reinstate tax-free shopping for international visitors. Doing so would make London’s West End more competitive, restoring its appeal as a premier shopping destination and helping ensure we capitalise on the full economic potential of inbound tourism.
Tourism is bouncing back — as the Chancellor delivers the first Labour Budget in 14 years, it’s an opportune moment to consider how future policy can maximise its economic potential.