Changi Airport Group (CAG) has revealed to TRBusiness plans to unfurl new retail spaces at Singapore Changi Airport’s Terminal 1 east wing.
Speaking to this publication in an exclusive interview, Lim Peck Hoon, Executive Vice President, Commercial, CAG, says a flurry of successful recent upgrades at the T1 Departure Transit Hall and west wing have acted as a timely tonic to review the reconfiguration of the T1 east wing.
“With the success of these two enhancement projects, next in the pipeline is the revamp of the T1 east wing, which will see the enhancement of a popular F&B cluster and the injection of new retail spaces,” confirmed Peck Hoon. “The project will increase the net leasable area, expand the offerings to passengers and uplift the ambience in the zone.”
CAG has ushered in a wave of new commercial units across its terminals in recent months, including the largest Bacha Coffee store in the world at Terminal 3; a new duplex store at Terminal 3; three luxury boutiques at Terminal 1 (Dior, Louis Vuitton and Tiffany & Co.); plus new-to-Changi brands such as streetwear label ADLV in Terminal 4 and athleisure brand Lululemon in Terminal 3.
“In Jewel Changi Airport, new tenants include Don Don Donki, Japan’s biggest discount store chain offering high quality Japanese products ranging from confectioneries to ready-to-eat meals,” explained Peck Hoon.
“Many of these lease agreements were sealed during the height of the pandemic, reflecting the strong confidence that the brands have in the recovery of travel in Changi Airport.”
Tenders: progressive rollout
TRBusiness hears that CAG drove its leasing activities into a new gear in 2022, as it welcomed travellers back to its terminals [notably from the reopening of Terminal 4 and the southern wing of the Terminal 2 Departure Hall in September and October, respectively – Ed].
“We successfully concluded over 140 airside concession leases and secured 19 new-to-Changi brands and concepts,” said Peck Hoon. “In particular, a large-scale leasing exercise for 20 F&B outlets in Terminal 2 saw an overwhelming response from the market.
“We continue to be on the lookout for tenants and retailers that will add excitement and new innovative experiences to the retail and dining landscape in Changi’s terminals and will announce upcoming leasing tenders progressively.”
The Asian hub served 32.2 million passengers in 2022, buoyed by the island state’s relaxation of travel and border restrictions in April 2022.
This represented a substantial leap on the 3.1 million passengers handled in 2021, but remains less than half than the record 68.3m passengers served in 2019.
As reported earlier this year, total concession revenue across Changi Airport’s transit and public areas, including sales from its online activities, registered S$1.1 billion in 2022 – representing a 37% share of 2019 sales.
“Travel retail sales have seen a resurgence – we see a particularly strong sales recovery from Indonesia, Thailand, and Vietnam, with perfumes & cosmetics, liquor & tobacco and luxury once again emerging as the top categories in Changi’s stores,” said Peck Hoon.
“We saw total sales rising steadily since last year, hitting almost 60% in January 2023 compared to 2019 levels. We are encouraged by the growth in concession sales and are optimistic that we are on track to a full recovery.”
Over two thirds of Lotte’s shops open
That resurgence will rely on anchor tenants The Shilla Duty Free and Lotte Duty Free investing in new brands, concepts and experiences.
The latter officially began its liquor & tobacco concession in June 2020, having taken over the business following DFS’s departure, but the pandemic put pay to any meaningful trading start with sales restricted to online channels to begin.
Around 14 of Lotte’s shops are currently open followed a period of refurbishments and upgrades to its 18 contracted stores, which span more than 8,000sq m of retail space across all four terminals.
Three stores are undergoing refurbishments and these are set to welcome passengers later this year.
CAG maintains that making clever use of opportunities during the pandemic to innovate and strengthen its commercial offerings and flag the ‘magic of travel retail’ to returning passengers underpins its successful recovery.
Its iShopChangi e-commerce platform has proven popular among travellers and digitisation efforts as a whole took on added verve during the pandemic-enforced lull to physical shopping.
More products and services have been made available on platforms such as the iChangi app, highlights CAG.
“For example, our passengers can now exchange foreign currency, rent a wi-fi router and buy things duty free beforehand, and have them ready for pick up when they arrive at the airport,” remarked Peck Hoon.
“We also made available the booking of various activities and events as well as the redemption of shopping GWPs, PWPs (purchase with purchase) and car parking promotions available on our app.
“This means that our customers can make the transactions digitally without the need to queue, providing them with much greater convenience while also allowing us to save manpower.”
‘An oasis of peacefulness’
Beyond shopping, the operator says it has been working with its tenants to sharpen its tactics to passenger engagement.
“One approach is by providing space that is both beautiful and functional, allowing tenants to create experiences that go beyond just shopping,” added Peck Hoon. “The latest example is the revamp of the central piazza in T1’s Departure Transit Hall, which was completed last year.
“We wanted this space to emanate a warmth that is far from the usual spirit of regular airports, more like a hotel lobby than an airport. Here, we have incorporated various design elements where hanging chandeliers, green columns emerging from ponds, the sound of water amid the lush vegetation, as well as the earthy tones and subtle blown glass suspension create an oasis of peacefulness.
“At the same time, we wanted to organise the tenants (Shilla Duty Free, Dior, Louis Vuitton, Tiffany & Co, and Lotte Duty Free) in such a way that they would get superior visibility from passengers entering the transit area. You would notice that the designs of the luxury boutiques blend in seamlessly with the architecture of the T1 central piazza. We envisioned the area to be an island of serenity that is dedicated to passengers, with the allure of an extraordinary retail experience.
“Before this, we had also reconfigured the space in the west wing of the departure transit hall in T1, which helped to rejuvenate the zone and elevate the overall shopping and dining experience. The refreshed design featured more greenery and the entrance to the secondary street was widened, with a new F&B cluster anchored in the zone to drive footfall. Customer experience was enhanced with additional seating, cosy layout with new landscaping and F&B concepts.”
Along with the rest of the aviation and travel retail industry globally, Changi Airport has faced unprecedented challenges in recent years, reminded Peck Hoon.
“Despite the Covid-19 disruption, we knew deep in our hearts that our passengers will return as aviation’s raison d’etre will never go away – we have an insatiable wanderlust and deep desire to connect with our loved ones around the world.”
Watch out for an edited version of this interview with Lim Peck Hoon, Executive Vice President, Commercial, Changi Airport Group, in the Asia Pacific special edition of TRBusiness, available digitally and in print from the press racks at the TFWA Asia Pacific Exhibition & Conference in Singapore.
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