In an exclusive on-location interview, Cyprus Duty Free General Manager Andrew Baker told TRBusiness how proud he is of what the company has achieved and how relieved he was to see the return of passengers on a meaningful level in the latter stages of 2021.
“At the moment we’re about 22% behind 2019 traffic,” he told TRBusiness last month. “We’re about 17% behind 2019 levels in terms of sales. Spends this year, particularly from the Brits – across the board though as well – have been much higher than in 2019.
“That’s helped with the overall success of the business in terms of the growth in sales; we’re outstripping the volume of passengers.”
As reported, CTC-ARI, better known as Cyprus Duty Free, completed an ambitious renovation of its commercial space in both Larnaca and Paphos Airports, operated by Hermes Airports.
The significant uplift in sales began in October 2021 and by June 2022, Larnaca’s sister airport in Paphos was already surpassing passenger traffic and sales recorded in 2019.
Brits back ‘with a vengeance’
“Brits came back with a vengeance last year, but we didn’t see them until August,” added Baker. “So for the first seven months we didn’t see any Brits at all. Then the UK lifted the restrictions on travel.”
Paphos Airport immediately benefitted from the return of British passengers, whereas Larnaca’s recovery was more gradual, said Baker.
“Paphos is much more seasonal than Larnaca, which benefits from a wider network of airlines. In Larnaca we saw a slower climb, but a more continuous climb.”
Understandably, Baker and his team monitored passengers’ behaviour closely upon their return in 2021, adapting to shifting demands and any new potential anxieties.
‘This is a human business’
“When the pandemic first hit people were saying that customers would not want to engage with sales people,” he said. “We found it to be quite the contrary. We saw customers wanted to engage with our staff even though people were wearing masks… This is a human business, a social business, a contact business.”
Baker cannot speak highly enough of Toni McDonald, Sergios Sergiou and the many other members of the Cyprus Duty Free team including those in commercial, design, marketing and logistics.
TRBusiness can attest that Cypriots are naturally friendly people; something which is celebrated in Cyprus Duty Free’s wealth of talent on the shop floor too.
Said Baker: “We have some amazing sales people here. That benefitted us as a business. The fact that we are a leisure industry has also helped us. Business traffic has been curtailed at other airports because people weren’t travelling in 2020/2021.
“When people began to travel last year, we saw a bigger lift than at many other airports. People are frustrated; there is pent-up demand from the last couple of years and now they want to travel after having saved up a bit of money in that time. Now they can, they want to spend. That’s what is really driving the business this year.”
Of course, he is under no illusion that there are no bumps in the road ahead and anticipates that the cost-of-living crisis in many parts of the world, fuelled by the war in Ukraine as well as the long-lasting economic impacts of the pandemic, will have an effect on business next year.
“There is uncertainty about what is going to happen next year of course, when inflation really starts to bite. Will we get the same number of people travelling? Will their spend drop because of inflation?”
Aside the supply chain complications and associated rise in costs, the war in Ukraine has eliminated the second-biggest group of travellers to Cyprus.
“In 2019 Brits dominated traffic, the Russians were in second and Cypriots third,” confirmed Baker. “Then you had the Germans, Eastern Europeans, including the Polish, and traffic from Scandinavia, which can be really strong here. That has continued into this year with the exception of the Russians.”
While Baker says that the lack of Russian traffic continues to pose a major challenge, it is one he believes the business has risen to admirably.
“In 2019, before Covid and the war in Ukraine, we introduced the ‘wow’ offers; really great value for money on many popular brands and products, because back then we already saw that people’s pockets were being squeezed.”
Baker also pointed out that the company ‘has always had to compete with downtown’, which boasts ‘very cheap liquor prices.’
However, he was keen to highlight that the big drinks companies, such as Diageo, have been ‘very supportive in combatting this issue’.
Sales of liquor and tobacco, historically strong among British travellers to Cyprus, received a further boost in January 2021 after UK-EU duty free was restored following the former’s departure from the latter.
TRBusiness had the great pleasure of meeting many talented members of the Cyprus Duty Free team while on location in Larnaca, and has nothing but admiration for their spirit, determination and kindness.
Read more about Cyprus Duty Free and the ambitious renovation that took place at Larnaca in the August/September e-zine.
TRBusiness looks forward to welcoming all industry stakeholders to the TR Consumer Forum in September year. Register here.