PARIS — Luxury stocks surged Thursday on the Paris bourse after China lifted its long-standing travel ban on group tours to more than 70 locations, with immediate effect.
The increases were led by LVMH Moët Hennessy Louis Vuitton, whose stock closed the day up 3.4 percent to 834.70 euros, while Hermès International’s stock rose 3.2 percent to 1,960.20 euros.
China’s Ministry of Culture and Tourism said Thursday it had ended its ban on group tours to 78 locations in the Asia-Pacific region, Europe, North America and Africa, three years after it was instigated to stem the spread of the coronavirus, in early 2020.
Chinese travelers can now visit the U.S., Japan, South Korea, the U.K., German and Australia, among other locales.
Beijing dropped its zero-COVID-19 policy in December 2022, then the following month allowed for group tours to 20 countries. That number was expanded to 60 in March.
Other French luxury stocks ending Thursday up included Dior couture, with a 2.7 percent gain to 781.50 euros, and Kering with a 2.2 percent rise to 528.40 euros.
“The Chinese used to spend 70 percent of their luxury budget when traveling abroad pre-COVID[-19]. And while we believe some of the spend repatriation to China will sustain, there is still about 50 percent of spend we expect to happen abroad, as Chinese customers take advantage of the [approximately] 30 percent lower prices and tax advantages,” wrote Maria Meiță, Bernstein consumer sector specialist, in a research note. “Our top picks in this scenario are LVMH, Kering, Shiseido and Estée [Lauder Cos.].”
— With contributions from Tianwei Zhang