Tourism throughout the European Union has taken a significant dive with its overall profit margins, as previously discussed. Analytic data from the Union Bank of Switzerland revealed that March valuations dropped by 68.5% from 2019 to 2020. This marks the most significant drop in tourism for Europe since World War II, with the industry-changing drastically since then. Chinese tourists have become the most significant spenders in Europe, accounting for 84% of the overall decline. Nations with high infections saw more substantial decreases in tourist activity, with Italy standing number one. Their tourism declines accounted for 96%, with the remaining 4% accounting for medical experts travelling into the country to aid. The UBS Group expressed that more significant reductions are anticipated for April 2020.
Luxury Goods & Retail Services throughout Europe saw a significant decline, citing a large percentage coming from a lack of tourist activity. Infamous brands like Louis Vuitton and Gucci saw an average reduction of 78%. Considering both maintain headquarters throughout Italy, it’s not surprising that their percentages were more significant than popular brands like Mark & Spencer. These valuations aren’t expected to reach average margins until European Government begin lifting lockdowns, which won’t happen until confirmed infections start to drop.
The Closures
Luxury Brands operating exclusive retail locations throughout notable cities will remain closed for an indefinite period, with the minimum being April & May. The Union Bank of Switzerland expects brands to reopen their operations by Mid-June. Locations in cities like Barcelona and Rome have become dead zones, with profit margins on the retail level dropping to 0%.
Any profits earned throughout this period have come from Louis Vuitton’s or Gucci’s online store. These cities extend to Milan, France, Zurich, Berlin, Budapest, and Stockholm. 2nd Quarter Profit Margins are anticipated to be the lowest in these brands history. The 2020 fiscal year will be recorded as one of the worst historically, for countless retail operations.
It should be mentioned that four nations throughout the European Union have exceeded 100+ thousand confirmed cases of COVID-19. This includes Germany, France, Italy, and Spain. The United Kingdom’s Great Britain & Ireland have also exceeded this vast number. Death counts are considerably lower though, with more than 65% expected to defeat the respiratory issues revolved around COVID-19.