Brexit is fraught with obstacles, although it also hides some good news. For example, with the UK leaving Europe, British people can benefit from duty-free shopping on their travels across the EU. This translates into a permanent discount when they go to the shops, a gold mine for Spanish commerce. The first spending data of the British who have used the tax free (Anglicism with which the procedure to obtain the tax refund is known) they demonstrate this: from January to the end of September the disbursement was 1,337 euros for each tourist who accepted the refund, well above the average among all nationalities in 2019 (357 euros), according to Global Blue, a leading company in the management of tax refunds. It also exceeds the 837 euros on average paid by Chinese tourists, the ones who spend the most on average each year.
In this way, leaving the European Union has become an unprecedented opportunity for Spain. By volume, each year the British make more than 70 million trips through Europe and of them 18 million tourists choose Spain (at least that was the usual before the pandemic). From these we must deduct six million who visit the Canary Islands, where it is not possible to benefit from tax-free shopping. The cake to distribute in the Old Continent is 40,000 million euros, according to the British Statistical Office.
The battle for this loot is now focused on promotion. “The destination that first places this idea on the market will take a giant step,” says a senior manager in the sector. The explanation campaign seems fundamental, since there is still a lot of ignorance among travelers. “According to the shops, only 10% of the British who have bought in Spain have benefited from the refund. It is a very low percentage, since the rest of nationalities are always above 50% ”, explains Luis Llorca, general director of Global Blue Spain.
Thus, the duties are clear, both for the public and private sectors: “The authorities have not yet made the necessary effort to publicize this possibility of return on purchases,” warns Llorca. An opportunity, he says, that cannot be missed. In the private sector there is also a long way to go: there are businesses that are unaware of the change, those that are collecting information on how they work and some that have already opted for it.
In this last group is El Corte Inglés, which in summer launched a campaign together with Iberia to encourage tax free of the British. An initiative that has worked well, according to company sources, and that is expected to grow exponentially in the coming months. “We are going to promote it at the World Travel Market at the beginning of November in London. We are going to tell the market about it and it is something that public institutions and large cities should also do. We must take advantage of this moment to change the inertia ”, explains Javier Fernández Andrino, director of international clients and luxury at El Corte Inglés.
Permanent discount
Tax-free purchases represent, in practice, a permanent discount in all businesses in Spain that does not involve an effort for businesses. For example, it is as if an establishment gave away some AirPods (it costs 179 euros in the Apple store) for the purchase of the iPhone 13 Pro of 128 GB (1,159 euros). But without having to assume that cost. An offer that is maintained in all types of purchases (the percentage of return varies depending on the amount of the purchase), from clothes to bags, through electronic products or jewelry.
Precisely this last category, watches and jewelery, is the one that has stood out the most among the purchases of the British this summer. They account for 55% of spending, according to Global Blue, above fashion and accessories, which account for 40% of total spending made with tax free by UK residents. By province in which the purchase was made, more than 9 out of every 10 euros have been spent in Malaga (27%), the Balearic Islands (26%), Barcelona (21%) and Madrid (18%).
Market sources insist that the prospects for the future are very favorable and highlight the growth margin that exists, especially due to a very high number of travelers who are still unaware of the advantage they have after Brexit. For this reason, they demand a boost from the governments of Spain, regional governments and even city councils in large cities. “You have to move, tell and promote it. If done well, the British should be the nationality that makes the most tax-free purchases in Spain ”, explain senior executives in the sector.
So far this year, until the end of September, the average ticket of British travelers who benefited from the tax refund was higher in France, where the outlay amounted to 2,337 euros, a thousand euros more than in Spanish territory. It is followed by Italy (1,688 euros) and Spain, third in this classification of European destinations. Behind are Germany (1,059 euros), Greece (1,020 euros) and Portugal (695 euros on average).