Annual Survey: What can we expect in 2022?

By Luke Barras-hill |

The deadline to complete the Global Industry Survey is Friday 7 January.

In a special preview of the forthcoming Global Industry Survey*, TRBusiness considers what 2022 will bring for duty free and travel retail….

Published in the January e-zine, the Annual Survey acts as a timely and discerning barometer for the current health of the market, offering views from influential stakeholders on a number of critical developments.

There is still time to have your voice heard by clicking below and completing the survey, but hurry – the deadline for submissions is fast approaching (Friday 7 January).

CHALLENGE & REWARD

Reflecting on the past 12 months, Nina Kristin Gür, VP Retail Key Account Management at Fraport AG said: “The year has been showing challenging ups and downs, with a more difficult start than expected, but then a promising Summer and also strong ongoing development in fall.

“With the discovery of Omicron, we have experienced a further dip, but not as heavy as expected, at least until now. Luxury retail and also financial services are strongly dependent on Asian customers which are still not there. However, traditional luxury brands nevertheless were outperforming our expectations.”

Indeed, Dubai Duty Free’s Executive Vice Chairman and CEO Colm McLoughlin noted a year marked out by its volatility.

Colm McLoughlin, Executive Vice Chairman & CEO, Dubai Duty Free.

While early optimism at the beginning of 2021 due to breakthroughs in vaccine deployment augured well for the restoration of international travel, the Delta variant resulted in further border restrictions/closures.

But the business returned to profitability in January and McLoughlin reveals that sales for January through November reached US$769 million – a 34% increase compared with the same period year-on-year.

Sales are expected to exceed US$900 million in full-year 2021, added McLoughlin.

In comments that will strike a familiar chord with many in the industry, Gür says DF&TR spend per head and basket sizes in 2021 trended upwards in most areas.

While acknowledging the positivity of elevated spend per passenger during the pandemic’s phased re-opening of retail shops, David Chan, Vice President of Spirits, Wine, Tobacco, Food & Gifts at DFS Group believes the situation is not sustainable ‘as revenge spending will slowly decline’.

SUSTAINED REVENGE SPENDING?

McLoughlin notes that while average sale per head has increased to around US$52 versus US$33 in 2019, he also does not think the elevated spending situation is sustainable.

Fraport AG, operator of Frankfurt Airport (pictured), expects passenger numbers to stabilise again towards Spring/ Summer and climb steadily thereafter. There are hopes that countries across Asia will reopen towards the third quarter of 2022. Source: Fraport AG.

Nonetheless, optimism in the trajectory of the industry’s revival through 2022 prevails.

“Despite the Omicron strain, we believe that a surge in vaccinations will result in the weakening of the strain and the resumption of international travel,” explained McLoughlin.

He mentioned the retailer’s excitement around the recent opening of the first Louis Vuitton travel retail store in the Middle East at Dubai International Airport (DXB), with more openings in the pipeline.

“[In] January we have the opening of a 100 sq m Cartier Boutique, also in DXB. This will immediately upgrade the fashion offer in DXB which already includes Chanel, Gucci and Ferragamo. Based on projected pax traffic of 56 million (high figure) and the investment in the retail offer, we are very positive for 2022.”

Watch out for the Global Industry Survey in the TRBusiness January 2022 e-zine

*The survey is conducted without any personal bias or alliances. We simply ask a series of questions and publish the answers alongside your name, company and job title.

If you would prefer to receive the survey in a word document then please email [email protected].

TRBusiness thanks you very much in advance for your responses.

 

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