Group Tours to 78 Countries Expected to Boost Luxury Spending
Luxury stocks experienced a notable surge on Thursday on the Paris bourse following China’s announcement to lift its long-standing travel ban on group tours to 78 destinations, effective immediately.
Leading this upward trend was LVMH Moët Hennessy Louis Vuitton, whose stock closed the day with a 3.4 percent increase at 834.70 euros, closely followed by Hermès International, which saw its stock rise by 3.2 percent to 1,960.20 euros.
China’s Ministry of Culture and Tourism declared that it had officially ended its restriction on group tours to 78 locations spanning the Asia-Pacific region, Europe, North America, and Africa. This move comes after a three-year ban that was imposed in early 2020 to mitigate the spread of the coronavirus.
With this development, Chinese travelers are now able to explore various countries including the U.S., Japan, South Korea, the U.K., Germany, and Australia, among others. Chinese buyers constitute approximately 25 percent of the sales in the European luxury goods market.
Several countries such as Switzerland, Italy, Spain, France, Greece, Denmark, Iceland, and Portugal had previously received approval for group tours earlier in the year.
After a promising start to the year, luxury stocks experienced a decline over the past few months due to sluggish Chinese consumer and economic data. Optimistic investors are banking on a resurgence, anticipating that Beijing will soon implement robust stimulus measures to rejuvenate the weakening economy.
Beijing abandoned its zero-COVID-19 policy in December 2022 and subsequently opened the door to group tours to 20 countries the following month. This number was further expanded to 60 in March.
Other French luxury stocks that benefited from this development included Dior couture, witnessing a 2.7 percent gain at 781.50 euros, and Kering, enjoying a 2.2 percent rise at 528.40 euros.
This relaxation, which significantly bolsters the global tourism industry, also propelled Europe’s travel and leisure subindex to rise by 1 percent. Notably, Air-France KLM saw an increase of up to 2.8 percent, while TUI AG experienced a gain of 2.4 percent.