In a major gain, Heinemann Asia Pacific has been appointed as the new duty free operator at Sydney Airport from February next year.

 

Sydney Airport made the announcement this morning, confirming that the new contract will begin on 17 February 2015 and run for seven-and-a-half years until 31 August 2022.

 

The win is a major coup for Heinemann and a reward for its long search for a quality contract with critical mass in the Asia Pacific region where it has invested strongly in the region. Sydney Airport CEO Kerrie Mather also confirmed that the airport is looking forward to higher revenues.

 

In a statement, she said that retail revenues are expected to be higher in 2015 alongside a reconfiguration of the duty free space for Heinemann’s new shop design and following a retail tenancy mix review, the duty free business has been given some extra space, although the total retail footprint ‘has not increased’. Sydney Airport added intriguingly that revenue is expected to be even further enhanced from 2016 onwards after ‘new initiatives have been completed’.

 

“This is a fantastic outcome for both our passengers and the airport. It will create a significantly improved passenger experience, a new and dynamic duty free offering tailored to our evolving passenger mix and deliver enhanced revenue growth,” said Kerrie Mather (shown here).

 

SYDNEY THANKED NUANCE

She added: “I would also like to acknowledge the strong partnership between Sydney Airport and The Nuance Group, operators of SYD Duty Free.  I would like to thank Philippe Boyer and his team [CEO of Nuance Australia-Ed] for their dedication over the years and wish them the very best for the future.” [Nuance is being taken over by Dufry at this time-Ed].

 

Paying tribute to Heinemann, she said: “Heinemann has extensive global expertise and will deliver a new and innovative offering for the 13 million international passengers travelling through Sydney Airport each year. We saw this as an opportunity to completely transform the airside experience and in partnership with Heinemann, we will create new and dynamic retail offerings that will support one of the most exciting duty free experiences of any airport globally.

 

“Heinemann will introduce more than 400 new brands to the airport tailored to our evolving passenger mix, along with an innovative design concept creating a unique sense of place. The space will be reconfigured to focus on customer orientation zones and establish clear lines of sight to aircraft gates and other areas of the terminal to significantly improve the passenger experience.

 

“Along with wide-ranging choice, another key criteria in the selection of our new duty free partner was to offer value for money to our customers and Heinemann with its global scale has the ability to do this. Heinemann will also offer a multi-channel digital commerce strategy offering customers the convenience of online shopping, mobile shopping, a digital loyalty app and a number of other unique digital features.”

 

“This is a fantastic outcome for our passengers and we look forward to working with Heinemann and our on-airport stakeholders to deliver the exciting concepts and initiatives planned.”

 

 

Sydney Airport has been a tough contract for Nuance in recent years and this has not been helped by the reduction in the duty free tobacco arrivals allowance.

 

MAJOR STEP UP FOR HEINEMANN IN ASIA

Heinemann Asia Pacific CEO Max Heinemann said the company was also looking forward to partnering with Sydney Airport: “We were particularly encouraged by Sydney Airport’s challenge to ‘ReThink’ all elements of its duty free business because this aligns precisely with Heinemann’s philosophy of constantly challenging the status quo.

 

“We promise to create an authentic and living representation of Sydney that breaks away from tired stereotypes, by delivering an environment that is an extension of the city of Sydney in all its exuberance.”

 

From February of next year, Heinemann will operate a total of five duty free shops in the following areas of the terminal, in addition to a landside service offering. These will be located in the main departures ‘Forum’; Departures Pier B satellite; Departures Pier C satellite; Arrivals Pier B; and Arrivals Pier C. Heinemann already operates two small stores at Sydney Airport with its National Geographic and A Little Something in Terminal 1.

 

 

SYDNEY HAPPY WITH OFFERS

In a communique to investors, Mather added: “We were delighted that our global tender process attracted high-calibre submissions from the world’s leading operators. This significant demand has again demonstrated the attractiveness of Sydney Airport’s retail proposition, driven by factors such as passenger growth, diversity of customers and airlines and higher spend rates.”

 

Sydney Airport (SYD) acknowledges that its duty free contract shortlist finally came down to three, with Lotte Duty Free known to have been a strong contender for a business which accounts for nearly 13% of the airport’s total revenue and 23% of commercial revenue. Retail revenue in the first half (ending June) grew by +7.4% at the Australian hub to A$125m ($116.7m).

 

In the first half, overall traffic rose by +2.3%, but international passenger growth was double that at +4.7%, benefiting from the Chinese New Year and Easter periods, plus a number of business, sporting and cultural events in Sydney.

 

During the period, growth in Asian nationality markets was buoyant. Malaysia (+22.5%), Hong Kong (+17.0%), China (+15.8%), India (+15.4%) and Singapore (+9.3%) were the strongest contributors.

 

The good news for both Sydney and Heinemann is that Tourism Research Australia has just reported that an all-time record 6.1m international visitors to Australia spent A$30.1bn ($27.9bn) in the year ending June 2014 – up 8% on last year – with 2.8m holidaymakers spending A$12bn ($11.1bn). Most of them arrived and departed through Sydney Airport. For more information, click here: http://www.trbusiness.com/index.php/regional/asia/15895-record-30bn-australia-visitor-spend.html