Dufry Group presents four-pillar ‘Destination 2027’ strategy in London

By Charlotte Turner |

At Capital Markets Day in London, Dufry presented its new four-pillar company strategy, ‘Destination 2027’ following its acquisition of Autogrill, announced on TRBusiness.com in July.

 

Dufry held its Capital Markets Day in London on 6 September, with members of Dufry’s Board of Directors and Global Executive Committee participating.

 

Acknowledging that travel patterns have changed during the pandemic, with stronger rebound of domestic and short-haul routes, increasing share of low-cost service, acceleration of leisure vs business travel, and different mix in the origin of international travellers, especially on the path to full recovery after Covid, Dufry said it plans to cater to the needs of these ‘new travellers’.

 

Dufry also highlighted that the industry is experiencing ‘a significant shift in consumer behaviour and in travel patterns’. “Consumer demographics have changed, bringing about, amongst other things, a stronger demand for personalised experiences, a greater influence of online media in purchasing decisions, and stronger interest for sustainable, healthy, eco-friendly products.”

 

Through ‘Destination 2027’, Dufry is launching a ‘Travel Experience Revolution’ (the first pillar) by creating – together with brand and landlord partners – a unique, new value proposition for customers, it says.

 

Xavier Rossinyol, Dufry CEO

Xavier Rossinyol, Dufry CEO, said the new company strategy has been crafted based on a deep understanding of ‘our stakeholders’ needs, customer insights and the current market trends evolution.’

The new value proposition is based on a customised offering for travellers, including elements of experience, new categories, and exclusive products, it says.

 

According to the retailer, this experience will be delivered both in physical “smart” stores, with a modular concept that allows to customise the offering to different passengers, routes and nationalities, as well as through digital channels, with extensive digital engagement before and after travel, to drive consideration and loyalty.

 

Pushing beyond the boundaries of retail, the travel experience revolution brings together travel retail and food & beverage, with the transformative business combination with Autogrill, which will allow to engage consumers with a broader set of products and a wider range of experiences, providing a platform to make travellers happier during travel.

 

Under its second pillar, Dufry will continue to ‘Diversify Its Geographical Presence’ to tap into fast-growing markets and hedge against regional economic cycles and shocks.

 

Dufry says it will continue to expand its footprint, with strong focus on the ‘highly attractive and resilient US market’, and a dedicated strategy for Asia Pacific, building a team focused on a set of strategic markets in the region and on the fast-growing cohort of the Chinese traveller.

 

In Europe and Rest of the World, Dufry will accelerate its business development process and set clear priorities and targets.

 

“The combination of travel experience revolution and geographical expansion will drive passenger acquisition, spend per passenger and net new concessions, which is expected to translate into annual turnover growth of 5% to 7% in 2025-2027,” said Dufry.

 

“The years 2023-2024 are considered a transition period, for which we expect an annual turnover growth of 7% to 10%. Both annual growth rates refer to an unaffected environment and to the pro-forma combined company, pending regulatory and other approvals.”

 

Under its third pillar, Dufry said it will foster a ‘Culture Of Operational Improvement’ to fuel profitability, accelerate cash-flow generation, and reinvest in growth.

 

“Dufry will continue to strive for superior profitability with a logic of zero-based budgeting, focused on disproportionally allocating resources to activities that make the most impact for the customer, while leveraging technology to simplify work and operations,” it added.

 

 

In addition to budgeting discipline, Dufry will systematically and actively manage its portfolio of concessions, with stronger focus on the evaluation of full profitability and cash flow contribution.

 

Finally, connecting the other three pillars of the strategy, ESG continues to be a defining ambition for Dufry and a ‘strong lighthouse’ for our day-to-day business, providing a source of inspiration of what to do best for our customers, our employees, and the world at large.

 

Xavier Rossinyol, Dufry CEO, said: “The new company strategy has been crafted based on a deep understanding of our stakeholders’ needs, customer insights and the current market trends evolution.

 

“Our new strategy ‘Destination 2027’ will be delivered by further empowering our already excellent teams and reinforcing them when needed. As a team, we are in a position to generate sustainable long-term value for all our stakeholders, including employees, landlords, brand partners, and, finally, our shareholders.

 

“This is supported by the transformative business combination with Autogrill as an inherent part of our vision to deliver a holistic travel experience and to make travellers happier.”

 

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