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As the holiday shopping season picks up, retailers across the country hope to get a lift from another wave of spenders: international tourists who can visit the U.S. once again
Starting Monday, the Biden administration will allow visitors from abroad into the country again. Most foreign travelers from more than 30 countries, including the U.K. and Brazil, have been restricted since early 2020, as Covid-19 cases rose globally. Visitors must be fully vaccinated against Covid and have a negative Covid test within three days before departure. Exemptions apply to travelers under the age of 18, if they have medical reasons preventing them from getting a vaccine, or are traveling from one of 50 countries with low vaccine availability.
For retailers, the policy is a much-awaited change that may help them fill up stores and ring up bigger sales again. At stake are billions of dollars that tourists spend on not only souvenirs, but luxury handbags, high-end makeup, top-shelf liquor and other items they often can’t find at home. Global visitors fueled more than $43.4 billion of shopping in 2019 — or 27% of the total shopping driven by travel and tourism, according to the International Trade Administration.
Yet retail experts and companies say it will take time for tourists to return to the U.S. and spend at post-pandemic levels. Airlines still have fewer flights. Other countries, including China, tightly restrict outbound travel. And pandemic-related logistics, from long lines at the airport to show proof at vaccination to Covid test when returning home, could delay travelers from booking a trip.
“Airlines will tell you that they are seeing a surge in booking. What they don’t quantify is when. Hotels will tell you is they’re seeing an uptick in bookings. What they won’t tell you is when,” said Daniel Binder, a partner for Columbus Consulting who focuses on travel retail. “The ban will lift, and it will take time.”
Binder saw the spending power of international tourists — especially Chinese tourists — up close as a longtime executive at DFS, a luxury goods travel retailer that’s owned by LVMH. He said he also saw the many months it took for global tourists to flock back and spend freely after other challenging periods, including the 9/11 terrorism attacks and the SARS outbreak.
Still, National Retail Federation CEO Matt Shay said there is a feeling of optimism as the ban lifts. He said that as Americans feel comfortable booking trips, dining out and having more active lives, they are also shopping. As international tourists visit, that will “give a jolt to the retail side,” too, he said.
“The return to the service and the experience economy is going to be positive and beneficial for retail and it’s going to be enhanced furthermore by these international visitors returning to the U.S.,” he said Wednesday on a call with reporters.
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