Economy Watch: Tourism Growth to Boost Luxury Retail Worldwide

London topped the global ranking of new luxury retail store openings in 2016, with New York also taking a high spot, according to Savills latest luxury retail report.

retailLondon topped the global ranking for new luxury retail store openings in 2016, according to the Savills Global Luxury Retail report, which was released this week. Tied for No. 3, New York was also high in the rankings—the highest in the United States, in fact. The British capital saw a total of 41 new luxury openings during the year, of which 15 were the respective brands’ first-ever stores in London, compared to 36 openings in Paris and 31 in both New York and Dubai.

For European luxury brands, London is a useful stepping stone to expand into the U.S., while for U.S. brands, it provides a gateway to Europe both geographically and in terms of brand profile. A number of European and U.S. luxury retailers opened new stores in the capital in 2016, including Moncler, de Grisogono and Valextra.

Tourists with money to burn will be increasingly prominent in the coming years, boosting luxury retailers in gateway cities in particular. Forecasts by the World Tourism Org. suggest that international tourist arrivals globally will double to almost 1.8 billion by 2030, aided by further growth of low-cost air travel and a rapidly expanding and mobile middle class in emerging economies.

Marie Hickey, commercial research director at Savills, noted that “a significant proportion of luxury goods are now purchased outside a shopper’s home market, particularly those of Chinese consumers, reinforcing the importance of destination cities. This was apparent in 2016, when all of the key established global retail destinations saw more than 20 luxury brand store openings.”