Sydney Airport generated retail revenue of A$295.6m ($227.1m) in calendar year 2016, representing a 12.2% growth on 2015 (A$263.5m/$202.4m) and a revenue contribution of 22%.

 

The airport introduced 12 first-to-Australia brands and 33 first-to-Australian-airport brands in 2016. It also completed 68 store transformations, having leased 236 retail outlets in total, with 94% of retail revenues coming from minimum guaranteed rental agreements last year.

 

STRONG OVERALL NUMBERS

This was underpinned by 14.9m (+8.9%) international passengers and 26.9m (+3.8%) on domestic routes in 2016, as the publicly-quoted company reported total revenue of A$1,364.6m ($1,048.2m) and EBITDA of A$1,085.7m ($833.8m) representing +8.2%.

 

As reported, Sydney Airport has transformed its retail offering in recent years, pointing to major improvements around 68 stores in 2016 which are aimed at providing ‘a more tailored mix of retail offers for passengers and visitors’.

 

Airport management said: “At T1 International, our City View premium dining precinct opened in September. Sydney Airport welcomed The Bistro by Wolfgang Puck, alongside Australia’s first flagship Heineken House as part of the precinct. These premium dining options are reshaping the passengers’ airport dining experience.

 

“Our new T1 dining options have complemented retail offerings by Gebr Heinemann Tax & Duty Free, introduced in 2015. The Sydney Airport store was awarded gold in the Interior Design Retail category at the Sydney Design Awards and Summit 2016, reflecting our leadership position in the design of the T1 retail precinct, and the improved offering now available to passengers.

 

 

GUCCI SET TO OPEN IN Q1 THIS YEAR

“A dedicated fashion precinct was also launched at T1, introducing a range of luxury brands, including Tiffany & Co. and Burberry – with Gucci to open in the first quarter of 2017. The fashion precinct has redefined the product offering to increase passenger spend.

 

“Our retail marketing focus extended beyond the airport this year, with strong pre-engagement with the passenger on our new retail offering. Our marketing strategy is helping visitors to better plan their time at the airport to maximise dwell time in the retail precinct.”

 

The airport said it established a stronger marketing presence in China and in 2016 it became the only Australian airport to establish a dedicated website hosted in Shanghai to outline key facts and useful information about Sydney Airport.

Meanwhile, the airport points to several other planned changes moving forward: “In 2017, we’ll continue to deliver an integrated strategy to drive growth across our terminals. New outlets launched in 2016 will transition to regular trading patterns, providing consistent rental returns for the retail business.

 

“In 2017, we’ll build on the significant works already completed at T1 as we introduce new specialty retail stores at Pier C. It’s expected these works will be completed by mid-2017. We’ll also work to further develop our T2 retail precincts, including the refurbishment and expansion of T2’s Pier B.”

 

SYDNEY SKYTRAX 2016 WINNER

Meanwhile, the airport was only recently voted one of the world’s top four by passengers in the prestigious 30m to 40m passenger category in 2016 by Skytrax – and amongst the top three in the Australia/Pacific region.

Jointly commenting on the calendar year performance, Chairman Trevor Gerber and Managing Director and CEO Kerrie Mather said: “Total passenger numbers continued to grow from the previous year’s record numbers, with 41.9m passing through our terminals in 2016.

 

“We saw our strongest international passenger growth in 12 years, with an additional two million international seats entering the Sydney market. This was driven by high load factors, increased seat capacity as airlines introduced bigger aircraft, and new routes from existing and new carriers.

 

SIX MORE CHINA ROUTES

“We continued to build a diverse passenger base, seeing double-digit passenger growth across many of our major markets, including China, the United States, India, Korea, Japan and Indonesia.

 

“South East Asia represented the region with the highest number of international passengers, with five million passengers during the year. With no one nationality representing more than 8% of our inbound passenger numbers, our growth across many markets is providing resilience for the future.

 

“The China market also continued to perform well, with another six routes to Chinese cities announced during the year.

 

“By January 2017, Sydney Airport had seven airlines flying to 14 mainland Chinese cities, confirming our position as a world leader for long-haul Chinese routes. The growth of this market saw 1.3m passengers travel to and from China during the year.”