Dufry-owned Hellenic Duty Free Shops (HDFS) is pressing ahead with renovation and expansion work at Rhodes, Zakynthos and Chania Airports and is extending the space at Heraklion International Airport.

Development at these four airports is part of the retailer’s investment plan running from 2017-2021. This includes the design of ‘spacious, stylish shops’ carrying a rich product mix, which offers an opportunity to generate greater revenues.

HDFS is investing €55m ($62m) to upgrade the travel experience across its 14 regional airports managed by Fraport Greece.

STRONG GREEK PRESENCE

The company, which was acquired by Dufry Group in 2013, started out in 1979 with two shops at the old airport in Hellinikon. It currently operates 115 shops at 46 locations (22 airports, 11 border stations and 13 ports) throughout Greece.

Through subsidiary Hellenic Distributions, HDFS also runs shops on 26 Anek and Attica vessels, travelling from Greece to Italy via Patras.

Speaking exclusively to TRBusiness, Executive Chairman, George Velentzas, HDFS said: “Investments in these airports are currently underway. In Rhodes, three new shops were created in the departures area of the new terminal, one being a 1,000sq m walkthrough concept store.”

Expansion work is ongoing in Rhodes, according to Velentzas. “Currently, the old terminal is being refurbished. Three more shops are being created there with a total surface area of approximately 800sq m.

“Work is scheduled to be completed by the beginning of the 2019 tourist season, at which point our company will be operating retail space spanning more than 2,200sq m.”

In Zakynthos, two new shops have been created, one of which is a 1,040sq m walkthrough outlet. “By the beginning of the 2019 tourist season, our company will be operating 1,151sq m of retail space at the airport.

“At Chania, work on the new 100sq m walkthrough shops is being completed, while at the beginning of the 2019 tourist season, the new extra-Schengen shop with a surface area of 130sq m will begin operations.”

Meanwhile in Heraklion, the new 1,600sq m walkthrough began operating at the renovated airport in time for last year’s tourist season. Velentzas said: “We are also creating a second 140sq m shop, which is a last-minute outlet in the extra-Schengen area of the airport.

“If we compare the total surface area of our shops, before and after, the difference is not so significant and only around an additional 200-250sq m.”

The important element is that the new shop has incorporated the two older outlets creating a single functional space. “This enables us to avoid duplicating product categories. We have, therefore, in essence, doubled our commercial space.”

In terms of time-frame, Velentzas said the fully revamped extra Schengen shops in Rhodes, extra-Schengen area of Chania and extra-Schengen area of Zakynthos Airport would all be operational in 2019.

He also indicated that revamped shops at Aktion, Kefalonia, Kavala and Skiathos, along with a new shop at Mykonos port will be completed this year.

Velentzas added: “In 2020, new revamped shops will be operational at airports in Thessaloniki, Corfu, Mykonos and Samos. The shop at Kefalonia Airport will also have been completed. The following year, we will complete shops at airports in Santorini, Mytilni, Kos and Mykonos.”

The investment includes HDFS’ refurbishment project at Athens International Airport, which is expanding its extra-Schengen building facilities at a fast pace.

Velentzas explained: “This expansion relates mainly to arrivals, but also departures. Our company is working on the creation of new retail spaces with a surface area of around 740sq m and the renovation of existing retail spaces with a total surface area of approximately 550sq m.”

EVALUATION PROCESS

HDFS is evaluating the spaces with Athens Airport so the new shops can cater to the needs of extra-Schengen travellers. The project is scheduled for completion by May 2020.

The creation of walkthroughs when deemed necessary from a retail standpoint and feasible from a technical perspective is an important part of its strategy. “A walkthrough shop has specific needs and particularities and cannot be accommodated by all airports.

“Our planning includes new walkthrough shops at airports in Thessaloniki, Corfu, Santorini, Mykonos, Kos, Samos and Mitilni,” indicated Velentzas.

The advantage of the walkthrough concept is obvious. “Travellers on their way to the departure gate pass through a large and modern commercial space, where they come into contact with all the products on offer to them, without having to look for the duty free shops, as was the case in the past.

“It is like strolling through a large department shop. The chances that you will find something you are interested in and buy it are much greater.”

In 2017, Fraport’s 14 Greek airports handled 27.6m passengers, an increase of +10.3% on the year before. Traffic was also up +11% to 6.25m passengers in the first five months of the year.

With Fraport Greece revising its investment budget from €330m to €450m, the airport operator will be looking to draw on HDFS’ many years of experience and work in tandem with the retailer to ensure the entire project goes according to plan.

Velentzas said: “We look at each project separately. All airports and all areas served by them have their own particularities.

“We have been following Fraport’s work schedule per airport and we are striving to ensure that each new shop correctly caters to its own ‘clientele.’

“Our many years of experience in travel retail give us the possibility to adjust to the specific needs of travellers per airport.”

DIGITAL FOOTPRINT

Embracing digital across the new renovated stores is vital. HDFS takes inspiration from the way parent company, Dufry Group, has tapped into the digital revolution on a large scale across DF&TR.

Velentzas remarked: “Screens are placed in almost all of the renovated shops in many strategic points giving them a very modern look, while also directly communicating all promotions and services on offer. This contributes ideally to passengers’ unique experience.”

In addition, passengers can use the Dufry Red loyalty programme in all shops and enjoy discounts and travel benefits.

“A reserve and collect service will also be available in most airports from March, enabling passengers to order items and collect them on the day of their departure. This will save them time and ensure their chosen items are available.”

As the investment project gathers pace, internal challenges include ensuring ‘larger, more efficient and modern spaces’ for the operation of its shops, enriching its product mix with premium items offered at competitive prices, covering passengers’ consumer needs and retail travel trends and delivering high-quality services through well trained staff.

External challenges are currency devaluations and reduced purchasing power and the possibility to reduce their impact is limited, according to Velentzas. “Brexit is one more unquantifiable factor that we believe will greatly shape developments in tourism,” he concluded.