Indian tourists spend more in cheaper, post-Brexit vote London

Suzanne Plunkett | Bloomberg | Getty Images

A family of Sikh tourists from Mumbai, India, visit Buckingham Palace in London, U.K., on June 6, 2007.

China’s recentGolden Week holidaysaw an influx of Chinese tourists to London, but a different Asian consumer has increasingly been spending money in the U.K. capital.

Spending by Indian tourists in London’s West End was up 38 percent year-on-year in July, according to the New West End Company, a body that represents the central London shopping and theater district.

Visitors from the world’s second most populous country ranked third for international spending in the West End in July, outstripping typically high-spending Middle Eastern visitors, and falling behind only China and the U.S.

Economic growth in India is expected to rise to 7.2 percent in the fiscal year of 2017/18, and 7.5 percent the following year, according to the World Bank. India is home to 1.3 billion people, trailing only China’s 1.4 billion population; by a United Nations estimate, India is set to overtake China’s population by 2024.

But, according to the New West End Company, there was a marked lag between the spending power of Indian consumers in comparison to the Chinese — an average of £677 and £1,478 respectively in July. VisitBritain, the U.K.’s tourism authority, said that the average spending by Indian tourists in the U.K. was 74 percent higher than the all-market average.

Sterling, despite recovering some losses since its initial drop following June 2016’s Brexit vote, is still down roughly 11 percent since before the referendum. International tourist numbers have since been on the up, sparked by cheaper prices.

VisitBritain, in a report on Indian tourism to the U.K. out last Thursday, said that over the past decade, the value of the international Indian tourist market had grown by 150 percent, rising from $6.2 billion in 2005 to $16.4 billion in 2016.

The report said that the U.K. was the 10th most popular destination for travel, and second to France in Europe, with Indian tourists preferring to visit Gulf countries and the U.S.

India’s overhaul of its Goods and Services Tax was launched on July 1, resulting in a fall in the taxation of economy flights from 5 to 6 percent, while business class flights are now taxed more at 12 percent, up from 9 percent.