Back in the Saddle: Gen Z Boosting the European Hospitality
Sunshine abroad and a voracity for tax-free shopping have propelled UK consumer expenditure throughout Europe in June. Findings from Planet, an international tech leader offering integrated software and payment solutions, show a 6% increase in the average UK consumer transaction values in euros across Europe in June. This is good news for retailers as the improved weather is acting as a light at the end of the tunnel.
The UK is now the runner-up among global shoppers in Europe, a significant improvement over its fifth place at the start of the year, according to Planet’s latest Intelligence report. Since the beginning of 2021, UK residents have been eligible for VAT refunds when shopping in the European Union with consumers benefitting from up to 19% of VAT returns. France, Italy, and Spain are gaining massively from this trend, with 45% of UK tourists spending going to France alone.
Compared to their peers from outside of Europe, the youngest consumers in the UK stood out as extraordinarily high spenders. A significant 30% of sales among UK buyers were made by Gen Z, up from 23% in May. Nevertheless, the age group responsible for the largest share of expenditure is still Generation Y, accounting for 41% of sales outside the EU and 34% of sales in the UK.
The newest generations of Britons are very clear about what they want and where they want it from. Together, they spent over 50% on luxury clothing. Retailers in continental Europe are setting their eye on Gen Z due to the cohort's reputation for returning to the same vacation destination more frequently than other demographic groups, as well as its purchasing power and brand loyalty.
Regarding geographical power distribution, the UK, Belgium, and Germany are trailing behind other nations. After already slowing down a little in May, the hotel payments growth rates continued a downward trend in June. Only Portugal comes close to regaining the number of arrivals from before the pandemic. The US's outbound travel is expected to significantly slow down during the coming months, while south-east Asia's arrivals are not offering a reassuring picture either. Nevertheless, in September, the UK, and Brazil are expected to have strong growth.
Rory O’Neill, Chief Marketing Officer at Planet, notes: “The summer season is the most important time of the year for hotels, travel companies, and holidaymakers across Europe, so it is fantastic to see the positive momentum in June. Hotel revenues continue to get closer to recovering to pre-pandemic levels as the world opens up once more. With an increase in travel, comes an increase in competition for hoteliers. After a couple of years of living with restrictions, people want to travel, and they want it to be a seamless experience. From booking a trip to deciding how they pay; hotels need the right infrastructure in place to make sure that the customer experience, including payments, is integrated, and aligned to the customer’s needs and expectations across the entire guest journey.”