LONDON (REUTERS) - London's West End lost nearly 200 million euros (S$340 million) in retail revenue last year due to tough visa requirements keeping Chinese tourists away, a report by tax-free shopping facilitator Global Blue said on Wednesday.

Harrods' managing director Michael Ward said in the report that Chinese tourists were the luxury department store's most important customers, and that Britain's current visa arrangement was "narrow-minded".

Spending by Chinese tourists abroad rose 58 per cent, as they traveled to find cheap deals on luxury goods, making them the highest-spending travellers in the world, the report showed.

But Britain's strict visa application process, which requires applicants to visit British embassies, has kept many Chinese tourists away from London's upmarket retail districts of Bond Street and Chelsea.

Russian tourists, who are the second-biggest shoppers, face up to two months' waiting time for a British visa, whereas one for Europe's 26-country Schengen Area can take as little as three days to process.

The report showed that tourists favour travel to the Schengen zone because of its straightforward visa process and widespread use - it is accepted in all member countries.

Global Blue operates a network of tax refund points for foreign shoppers.

Chinese shoppers were shown to prefer buying clothing, while Russians most commonly bought watches and jewellery.

"Chinese tourists often prefer to shop in Europe where they can save as much as 50 per cent on luxury goods," said Mr Dai Bin, president of the China Tourism Academy.

France was ranked the top destination for Chinese tourists, with nearly 10 per cent higher growth in Chinese visitors than Britain.

Germany ranked second with a 76 per cent increase in Chinese visitors, boosted by flights from China landing at Frankfurt airport.

The report also showed that Chinese tourists favour Singapore as a short-haul shopping destination.