Christian Sültemeyer, Fraport AG’s Head of Commercial Development and Category Management Duty Free tells TRBusiness that the company’s airports’ portfolio produced mixed results in 2015, with growing pains in Turkey and Bulgaria, but real solid gains at Frankfurt Airport.

 

In response to the 2016 TRBusiness Annual Survey, Sültemeyer said that in Frankfurt, unlike in many other parts of the world, the company actually benefited from a weak euro: “The USD and Chinese yuan in particular developed very strongly and led to a strong increase in sales from these respective passengers groups,” said Sültemeyer. “All in all this overcompensated the negative rouble effect in Frankfurt.”

 

In December, Sültemeyer told TRBusiness in a face-to-face interview in Germany that Frankfurt Airport hopes to see travel retail sales growth (7%) continue to outpace traffic growth (3.5%) in 2016.

 

“Strong international currencies are good for business if you are in the export business, which is definitely the case in international travel retail.”

 

However, it’s no secret that the German hub airport had to endure an unusually high number of strike days by its home carrier (Lufthansa) in 2015, which apparently had ‘a considerable negative influence’.

 

Sültemeyer also revealed that the year began with ‘a lot of worries about the Russia/Ukraine crisis’ with a rouble that was devaluing heavily, ‘leading to a very negative impact on the spend of Russian travellers’.

 

According to Sültemeyer this went on throughout the entire year and especially hit Fraport’s airports in Turkey, Bulgaria and of course Russia quite heavily. “For this part of our portfolio it was a bad year,” he says.

 

Sültemeyer is under no illusion that the currency problems will cease and believes that they could well dictate the industry’s performance in 2016 too.

 

“I am afraid the currency situation will also be one of the most influential factors in 2016. The other factor will be international terrorism, which will have an impact on people flying one way or the other. Still, we have positive expectations for 2016 since our industry has always proven to be a very robust one.

 

“Additionally we will see that digitalisation will more and more start to change our channel and airports will have to have an answer to that. This applies to online booking and faster processing times as well as online shopping/pre-ordering and loyalty programmes.” 

He is well aware that digitalisation is just one factor that will continue to shape our industry. Another growing trend is industry consolidation – both retailers and brands – and one that divides opinion on whether it benefits or hampers industry. 

“The speed of consolidation in the last two years cannot be good for airports and their previous business model for tendering contracts,” he says.

 

“The power of the remaining big operators will get stronger and stronger. I believe airports will more and more accept travel retail as part of their core business and get more involved. Business models and relationships will be more long-term and we will see more joint approaches in the industry.”