- Kristopher Fraser |
A recent study by boutique consulting firm Webster Pacific has revealed that luxury retail markets will be the most negatively impacted by coronavirus. COVID-19 has dramatically impacted tourism and, in particular, international tourism. Certain luxury retail markets are more dependent upon tourism than others. Webster Pacific's study predicts that the luxury retail markets most negatively impacted by the coronavirus pandemic will be those markets with the greatest presence of luxury retail and the greatest international tourism per capita which include Miiami, Honolulu, and Las Vegas.
Spending at luxury retail stores is heavily dependent on international tourism. 30 percent of Stuart Weitzman’s NYC Hudson Yard’s store comes from international Chinese tourists according to CNN Business. Tourism accounts for about 40 percent of total luxury goods spending according to S&P Global Market Intelligence.
One of the COVID-19 pandemic’s many blows to the U.S. economy was the enormous decrease in international tourism. Data from the National Travel and Tourism Office showed that international visitor travel spending decreased by 98.9 percent in the past year, from 11.6 billion dollars in April 2019 to only 129 million dollars in April 2020.
To better understand which U.S. luxury retail markets were most at risk of being negatively impacted by CVOID-19, Webster Pacific examined various data related to 42 U.S. metros. The objective was to identify which metros had both a significant luxury retail presence and high rates of tourism.
The metrics used to measure which markets would be the most impacted include total designer store count rank, which measured the size of the luxury retail market by U.S. Metro. Webster Pacific gathered the store locations of 20 luxury fashion and jewelry designers including Louis Vuitton, Versace, YSL, Fendi, Cartier, and Harry Winston. Webster Pacific also looked at the International Tourism per Capita Rank, which measures the importance of international tourism to metropolitan areas.