The Changing Face of New York Shoppers
The increasing US dollar is changing the face of the New York shopper. The shifting exchange rate has transformed the consumer habits of tourists who consider retail shopping as a must-have part of the trip to New York.
Nevertheless, statistics provided by the official marketing, tourism and partnership organization for the City of New York, NYC & Company, shows that the yearly amount of tourists coming to the city has increased by another 2 million in 2014 adding to a total of 56.4 million coming from abroad and other US regions. By 2015, the city government is hoping to generate $70 billion from travel and tourism. So who is shopping in New York today?
One of the world’s fastest growing economies, China, is making a significant contribution to New York’s tourism boom. Although the Chinese Yuan depreciated slightly against the US Dollar in 2015, increasing from 6.2 Yuan in January to 6.35 Yuan per dollar in September, tourists coming from China still find it appealing to buy general retail and especially luxury goods in the United States.
“For luxury goods it’s much cheaper in New York” says Evelyn, Chinese entrepreneur, currently living in New York and running a startup that imports healthy food from other parts of the world to China. “Chinese government has more strict regulation on the luxury goods than in other parts of the world, so a lot of Chinese will go abroad to buy these. Even for retail the average level is still higher in China”.
Indeed, in 2013 Chinese tourists spent 128.7 billion dollars abroad, according to the World Tourism Cities Federation. Chinese shoppers prefer buying luxury goods abroad because of the significant difference in prices, due to various taxes and fees on these types of products in China. And although in 2015 the Chinese government announced import fees reduction for some of the brands the difference still remains.
On the other hand, despite the overall growth of tourism revenues, New York is losing some of its more regular shoppers from Latin America. Not so long ago Brazilian visitors used to spend autumn vacations in the Big Apple and come back with a great deal of Christmas presents for friends and family. However recently, the Brazilian Real weakened against the US dollar, making tourists from this part of the world think twice about the benefit of buying in New York versus in home.
“I like fashion, but currently in Brazil the currency is so devaluated against dollar that for me it’s not worth it, buying here. Usually I buy purses and clothes, but this year almost nothing” says Patricia, financial controller from Sao Paolo, who is taking a few days of vacation in New York. “Currency is a trouble this year”.
A similar trend can be observed with Mexican tourists. The value of the Mexican peso in comparison to the dollar lost 16% since the beginning of 2015 and today is 17.12 Mexican Pesos for one US Dollar versus 14.74 on January 1st which makes visitors from Mexico spend less while travelling to the United States.
