‘Steady progress’ being made on arrivals duty free, reports ETRC

By Luke Barras-hill |

Julie Lassaigne, Secretary General, ETRC.

The European Travel Retail Confederation (ETRC) has called on the industry to sustain powerful messaging around EU duty free on arrival as a vehicle for aviation’s sustainable recovery.

ETRC Secretary General Julie Lassaigne updated delegates on the campaign’s progress at the Central and Eastern European Travel Retail Association’s (CEETRA) second Biannual Forum held this month.

In an address, she called on delegates to sustain pressure at a national level on their respective Member States to request that the European Commission considers arrivals duty free.

DIALOGUE SHIFT

ETRC has confirmed that ‘steady progress’ has been achieved with the European Commission after the association received a supportive letter from DG Move – the department responsible for transport.

This marks ‘a distinct change’ from the absolute refusal to entertain arrivals duty free a decade ago, says ETRC.

As reported, tax and duty free on arrival in the EU has the potential to unlock sizeable economic benefits for EU airports ­should legislators agree to amend existing tax and excise directives.

Permitting the mechanism for passengers travelling from third countries such as the UK would in turn act to ‘level up’ competition between EU airports and their international counterparts that benefit from lucrative arrivals duty free sales, ETRC argues.

Previously, an independent report from York Aviation estimated that the revenue stream could potentially account for 20-30% of total travel retail sales at EU airports (with the more likely figure at the bottom of the range).

Most CEETRA members operate in EU countries and, as such, continue to use their membership of ETRC as a mouthpiece for the region’s representation in Brussels.

Dr Patrick Bohl, Chair, CEETRA.

UK-EUROPE LOAD FACTORS UP

Attendees to the Biannual Forum also heard from Rachel Bulford, Chair, UKTRF and Head of Retail at Gatwick Airport.

She took the opportunity to offer perspective on the travel relationship between the UK and Eastern and Central Europe.

While routes have been impacted by the pandemic, there are some positive signs of recovery.

“Some UKTRF members have reported 80% load factors to Eastern Europe in recent weeks and there had been a significant jump in August; more than doubling in some cases,” explained Bulford.

Bulford said the reintroduction of duty free between the UK and EU could have a significant benefit to those airports in the Central and Eastern Europe region that benefit from strong UK-bound traffic flows.

On the other hand, the removal of airside tax free sales and the VAT Retail Export Scheme has had ‘a big impact on the industry’, with the likes of Dixon’s Travel exiting travel retail.

Elsewhere, m1nd-set presented findings from a survey conducted at larger CEE airports.

Shoppers were found to be ‘less likely to visit the duty free shops, but when they do it is more likely that they convert into buyers’, according to research based on responses from international travellers.

While store visitation (footfall) was down by as much as 37%, conversion was up by 59%, the research continued.

Post-pandemic CEE customers are particularly eager to embrace digital shopping with nearly 90% ‘expecting more digitalisation and technology offers’.

Finally, the number of travellers focusing their attentions on pre-planned purchases for themselves was up by 40%, while gifting was down by 31%.

“Value-related aspects and sustainability have gained significant importance among CEE travellers post-pandemic,” added Anna Marchesini, Head of Business Development, m1nd-set.

For more on the EU tax and duty free on arrival campaign, watch out for the TRBusiness October e-zine.

International

OUT NOW: June/July issue + Top 10 Airports

The TRBusiness June/July 2024 edition, featuring the Top 10 Airports report, is now available...

The Americas

Avolta expands US presence with 15-year contracts at John Wayne Airport

Avolta is set to grow its presence at John Wayne Airport in Orange County, California, through a...

International

TR Consumer Forum 2024 photo gallery now live

The TR Consumer Forum 2024 was packed with memorable moments, from the very first networking...

image description

In the Magazine

TRBusiness Magazine is free to access. Read the latest issue now.

E-mail this link to a friend