Frankfurt Airport operator Fraport AG admits that adjusting to changes in the current passenger mix represents a challenge.

However, spending behaviour demonstrates that its commercial offer is on track and being tweaked and optimised continually, according to Nina Kristin Gür, Vice President Retail Key Account Management and Christian Sültemeyer, Head of Retail Analysis.

The duo shared their views in the TRBusiness Global Industry Survey 2023*, revealing their assessment of the travel retail industry in 2022, and what’s on the radar beyond, including the opening of the airport’s Terminal 3 in 2026.

“2022 had a difficult start with lockdowns that heavily limited travel and specifically the F&B business. Recovery picked up strongly and steadily from April on, when restrictions were further lifted, until the end of the year.

“Even though the war in Ukraine and the connected energy crisis with high inflation has posed more challenges to our industry, we feel that aviation and travel retail are once again proving to be quite resilient after coming out of the Covid pandemic, which has hit our industry harder than others.

“Frankfurt Airport (FRA) still suffers from the lack of our best retail spenders from Asia and Russia, which have not come back yet in comparable numbers to 2019.

“On the plus side, we had very strong passenger growth from Schengen countries and also the US. The general spend from these passengers was exceeding 2019 and to a certain extent overcompensated for the lower numbers in non-EU top spenders. Thus, retail sales were above passenger growth almost the entire year.”

Read on for their answers to our top questions:

Question: What are your expectations for your business in travel retail in 2023 and what are the major challenges you anticipate?

Answer from Fraport AG’s Nina Kristin Gür, Vice President Retail Key Account Management and Christian Sültemeyer, Head of Retail Analysis: We expect traffic to recover further during the course of 2023. Pre-bookings for flights look very promising right now. The predictions on some of our most important destinations such as China/Asia and Russia, however, are very difficult.

READ MORE: Frankfurt Airport almost doubles its passenger traffic to 48.9m in 2022

FRA is in the preparation of the ramp-up phase to the opening of our Terminal 3 in 2026. This will be a quantum leap for our retail business and detailed preparations and tenders will start soon. One of the biggest challenges remaining from 2022 is recruiting in all sectors of the travel industry.

How would you describe the impact of supply chain and logistics challenges on your travel retail business?

Moderate – the bigger challenge will remain recruitment and staff. We do notice some difficulties with the provision of shop fitting materials when shops are newly opened or refurbished, but not as much on an everyday basis.

How has the shift in passenger demographics as a result of the pandemic/travel restrictions affected your product portfolio and growth plans?

The concept and brand portfolio at airports cannot be changed overnight due to average contract durations of five years and more. Still, we have reacted quickly with introducing our new pop-up-store approach where we can bring in new brands and products with a very short lead time in certain locations.

“FRA is in the preparation of the ramp-up phase to the opening of our Terminal 3 in 2026. This will be a quantum leap for our retail business” Christian Sültemeyer, Head of Retail Analysis, Fraport AG

It is still a challenge to completely understand changes in passenger structure. At FRA, for example, we saw Ryanair as one of the biggest airlines leaving and are once again lacking a significant share of low-cost passengers.

Most of the gap has been filled by Eurowings Discover from Lufthansa, which is not necessarily the same structure of passengers. Spending behaviour though shows that our offer is still on track and we are optimising and adapting constantly.

READ MORE: Boost for retail as Fraport charts ‘dynamic’ recovery of leisure traffic

In terms of retail offers which are aiming directly to Chinese customers, we are working on concepts which are a bit more flexible in case we will lack this target group for an even longer period.

However, as the shopping behaviour of especially younger target groups shows tremendous changes, we are working on future concepts that take their expectations into account.

CLICK HERE: To read the Global Industry Survey 2023 in full.

*The Global Industry Survey was conducted during November 2022 up until the second week of January 2023. Some of the views expressed are representative of individuals rather than their entire organisations. Some of the comments were also shared prior to China’s announced easing of travel restrictions from 8 January.