As promised, here is a taste of The Travel Retail Business and TREND?s Global Industry Survey 2007 where we asked the industry 10 important questions. Here are initial answers to the first two from suppliers,

retailers, airports and others from all corners of the globe related to expectations for the year ahead.

WHAT ARE THE THREE MOST IMPORTANT ECONOMIC OR SOCIO-POLITICAL FACTORS THAT YOU BELIEVE WILL INFLUENCE YOUR AREA OF BUSINESS OVER THE NEXT YEAR, EITHER REGIONALLY, INTERNATIONALLY, OR BOTH?

Alessandra Piovesana, Managing Director, Nuance-Watson (HK):
(1). The continued economic growth of Mainland China and its active participation in the international political stage have made it become an indisputable major power influencing and even leading both economic and political developments of the region and the world; (2). Strengthening of airport management among the pan-Pearl River Delta regions (inclusive of HK, Macau and Taiwan) will further enhance the importance of the respective airports being international hubs within the region; (3). The terrorist threat.

Peter Eriksson, Chief Commercial Officer of Unique (Zurich Airport AG):
Strong growth of the economy in Switzerland, as well as a booming export industry will further increase the willingness and need to travel, for business and leisure reasons (passenger growth at Zurich Airport in 2006, +7.5%) thus giving a platform for commercial growth.
I believe in Europe we will also experience growing traffic figures and Germany could develop to a locomotive with its improving economics. The importance of commercial activities and revenue for the industry (for airports, retailers and suppliers) must be understood also among the aviation industry and by this giving us the necessary support to develop the business.

Roberto Graziani, President and Ceo of The Nuance Group:
The booming economics of the emerging markets will continue to shift business from the ?old world? into the ?new world? and will push the overall level of business into the positive direction. Therefore it is important to build the required operational presence in such markets. China, India and most of the Asian markets will show a continuous growth, but also the South American market (the ?new old world?) should not be underestimated.
However we do believe that the instability of the oil market and increasing oil prices will influence negatively the overall aviation business and could bring several strong growing and young airlines in some difficulties.
Last but not least, the ongoing uncertainty about the new liquids/baggage restriction will not help to influence positively the overall perception of our flying customers. A global solution for this issue is of utmost importance otherwise the overall credibility of aviation security will be jeopardized.

Erik Juul-Mortensen, Managing Director, Maxxium Global Travel Retail and President of TFWA:
International terrorism, continued unrest in certain parts of the world, and the currency development with the impact these three factors will have on international travel – be that for business or for leisure.

Colm McLoughlin, Managing Director, Dubai Duty Free:
I think that we are going to see further growth and development of Dubai as a major business and leisure destination and therefore the continued investment by the Government of Dubai in particular, will be an important factor for the forthcoming year.
Secondly, peace and stability in the region will continue to be an important factor and in Dubai/UAE, we have been fortunate that regional conflicts have little or no impact on our business.
Thirdly, that Dubai Duty Free continues to have the support of the Government of Dubai and continues to invest in developing the retail offer both in the existing operation and the new operations.

Mark Riches, BAA Managing Director, Global Airport Retail & World Duty Free:
(1) The threat of terrorism; (2) continuing political instabilityin the Middle East (Israel/Palestine/Lebanon/Iran) and the uncertainty over North Korea; (3) the US$ exchange rate.

John Sutcliffe, Managing Director, Aer Rianta International Middle East:(a) Peace. We now have several very volatile areas in the Middle East, including Iraq, Lebanon/Israel/Palestine; (b) travel security; (c) stability in ?related? markets, such as Thailand.

David Merriman, Manager, Time Products, UK:
Threat of terrorism; declining UK economy; expansion of EU.

Christian S?ltemeyer, Fraport AG and Frankfurt Airport Senior Manager in Retail and Properties:
(1). Definitely security restrictions regarding liquids (and maybe even other product groups in the future) and the quest for global harmonisation and mutual acceptance of standards; (2). global economic development concerning currency fluctuations; (3). how fast our industry will again be able to react to an ever changing trading environment and the fast moving trends and customer demands that come with it.

Anthony Chalhoub, Managing Director, Habchi & Chalhoub:
(1). Crude oil price; (2). increase government spending; (3). increase in the number of passengers flying KAC due to the development of international business with Kuwait.

Arturs Saveljevs, Marketing Manager (Rents & Concessions), Riga International Airport:
Joining the Schengen area, rise of salaries, inflation.

Gilles Vigeral, Elizabeth Arden:
(1) Weakness of the USD; (2) strength of Mexican economy; (3) weak US consumer confidence.

Foster Fu, Director of Development, Department of Commercial and Trading Corp of Beijing Capital International Airport:
The Olympics; interest rates; the consumption tax on luxury goods merchandise.

Ray Martin, Director, Travel Retail Training UK: Terrorism, Complexity of small business tax; cost to ?country-dwellers? of public transport; restrictions on the use of cars; petrol prices; loss of sub-post offices.

Frank J Zhang, Assistant General Manager, Dalian Downtown Duty Free Store, China Duty Free Group:
(1). The changing of exchange rate of RMB into other currencies will continue to influence the business and economic environment worldwide. (2). Asia political situation and stability (such as North Korea problem and development of India) will be important issues on the international political stage. (3) Terrorist problem will continue to be one key topic of the world and American policy will continue to be the key issue to head the world.

Francisco Heredia Lafuente, New Projects Division, London Supply SA:
Rate U$S vs. Argentine peso; Changes of PBI?s of Mercosur countries; inflation.

Howard Amor, Owner, Zero Group:
Currency rates: US$/Sterling and US$/China RMB.

Doug Benham, Brussels Airport:
(1). Economic indicators that affect spend, i.e. interest rates, exchange rates; (2). Regional conflicts e.g. Middle East; (3). Environmental issues regarding air travel (increasingly).

George Horan, Deputy Managing Director, Dubai Duty Free:
Our business will grow because Dubai continues to emerge as a growing destination for tourism, business, banking, etc., etc. The planned growth of Emirates Airlines over the next 12 months will again add to the number of people using Dubai International Airport, and finally the opening of Concourse 2 and Terminal 3 at Dubai International Airport will enable us to serve the customer needs much more efficiently.

Colin Hargrave, BAA Managing Director, UK Airport Retail:
Exchange rate US$ to ?; Regulation; The Green agenda.

Simon Au, Sky Connection Purchasing Manager:
Terrorist threat (restriction on liquids on-board); Cross-strait tension between China and Taiwan and North Korea.

Wim Heemskerk, Managing Director, Dufri International:
(1). The Dollar is too weak in comparison to the Euro to develop our Asia and Middle East business in a proper way; (2). Due to the security factor, our electronic business can grow, as long there will be no security factor on our products; (3). As long there will be more military peace-keeping missions, we will see a positive growth of our business.

Steven Candries, Export & Duty free Director, Guylian:
The security measures will generate extra costs and this will be for sure for a big part paid by the airport authorities/landlords, but also the retailers will have the cost burden. They will cover it partly by absorbing it from their margins, or will increase prices to cover the expense that is related to it, or they will try to get it covered by the suppliers and this is where it will influence us. So price setting will be a new key issue, I believe. It will be mainly a regional issue, where one region is playing a role, i.e. Europe.
The growth of China is a worry…but more in manufacturing and the way they use brand names and the way they market their products. Too much copies of our European packs and the use of 'Made in or Made with' is too easily used, but without evidence that it is correct or not. We must act as companies to avoid misuse/abuse in order not to set any precedent for the future. But I wish them all prosperity and luck if the mission is to grow China in the right direction and according the rules of fair trade.

Theodore Gitzos, Investor Relations Manager, Hellenic Duty Free Shops:
Euro vs dollar; potential terrorist threats or attacks in the Balkan region.

Jean-Pierre Cointreau, President, Pages Vedrenne/Chateau Paulet:
(A). Euro/US$ exchange rate; (B). distributors' listings; (C). travel regulations.

Mark McKenzie, Manager, SR2000:
Interest rates; Australian & NSW government election outcomes; any negative impact of slowdown in Chinese economy?s demand for Australian resources.

David Thompson, Managing Director, D. G. Thompson International:
terrorism; stable economy; exchange rates.

Mahendra Thakar, Joint Managing Director, Flemingo International:
The most important factor in each location/region is political stability.

Mireille Sarthou, International Director, Herve Leger Parfums:
Middle East situation; weak US$.

Donatienne de Fontaines-Guillaume, Travel Retail Managing Director, Cosmopolitan Cosmetics:
Liquid ban and new security measures.

DO YOU BELIEVE THAT THIS YEAR?S GENERAL TRADING ENVIRONMENT WILL BE BETTER THAN 2006, OR WORSE? PLEASE GIVE A FEW BRIEF REASONS FOR EITHER VIEW.

Christian S?ltemeyer, Fraport/Frankfurt Airport: Positive thinking means always hoping for the better. Especially in Germany 2007 will be a year ‘without’ the soccer world-cup in comparison to 2006. We have the upcoming global liquid restrictions to solve for transit passengers among other things. In Frankfurt we will have quite a bit of construction work going on in 2007 to open a couple of new areas all shiny and new in 2008.
Still we believe that 2007 should be a difficult but good year of trading. We have seen the average spend per head rising and rising in the last couple of months meaning that once we had the passengers in the shops everything was very good.
Now in 2007 we have to work on penetration and give those passengers the trust back that some lost while having their purchases confiscated at one time in the past due to omnipresent security restrictions – differently handled and communicated in every airport around the world.

Alessandra Piovesana, Nuance-Watson (HK): (1). Within our operation at HKIA, we see a solid growth in passenger volume from Southeast Asia and Mainland China, so the outlook for 2007 remains positive; (2). With the experience of the terrorist threat in 2006, operators, vendors – as well as the airport authorities – have become more alert and learned a lot in coping with such ?crisis?. The result is a stronger relation which will definitely help to create a positive trading environment to counteract difficulties.

Peter Eriksson, Unique (Zurich Airport AG): The trading environment will be better than 2006 because of increased passenger figures and a willingness to consume. Investments in commercial activities at airports offer more attractive shopping experience and entertainment. We do though have to very quickly handle and find a long-term solution for the major risk of the industry – increasing security restrictions – putting the whole industry at risk and causing uncertainty for travellers/consumers. This will probably be the key issue to tackle, and we will have to act strong and fast.

Roberto Graziani, The Nuance Group: In general we do believe that 2007 will continue to be a good year for our industry if the above mentioned negative points can be kept under control. The overall market situation and world economy is seen positive, but maybe with a lower level of growth and will help to keep the expected passenger growth and should materialize in a stable spend growth.

Erik Juul-Mortensen, Maxxium/TFWA: Whereas I entered 2006 with a fair amount of optimism after a more unstable 2005, I am much more cautious in my optimism for 2007. The first months of 2006 proved that the required optimism was justified providing stability for a continued growth of travel and thereby for a continued growth of our industry. However, that was distorted by the events in August in the UK with the thwarted terrorist attacks.

Colm McLoughlin, Dubai Duty Free: Certainly in terms of Dubai Duty Free?s business, 2006 has been a fantastic year in which we broke many records and finished the year with sales of $712 million. We expect sales in excess of $800 million in 2007 and so are extremely optimistic about this year?s prospects.
In 2006, our sales increased by 20% which is higher than the traffic increase at Dubai International Airport. This indicates that average spend per passenger is increasing, as is our penetration level and we are confident that we will continue to achieve this in 2007.

Mark Riches, BAA & World Duty Free: Clearly we have to continue to address and reinforce message to customers regarding security protocols. However, given the significant impact during August/September 2006, we expect 2007, on the whole, to be better.

John Sutcliffe, Aer Rianta International Middle East: All the signals are positive in the Middle East region. There is significant traffic growth forecast especially in the Gulf countries, there are huge infrastructural projects taking place across the region. This includes massive airport development and tourism projects.
Of course, all this is taking place in the shadow of possible political unrest which is capable of erupting at anytime as we saw in Lebanon last July. While oil prices have fallen off somewhat, they are still high and this is good for public investment in this region. The weak dollar is also making our retail prices very attractive to other currency holders such as Sterling and Euro.David Merriman, Manager, Time Products, UK: Worse. Threat of terrorism; US economy going into recession.

Anthony Chalhoub, Habchi & Chalhoub: If the political situation remains as it was during the year 2006, the year 2007 will witness a definite increase of about 5-7%. However, with the increase of number of low-fare airlines coming up, business environment will get more competitive.

Gilles Vigeral, Elizabeth Arden: Better for the above reason [meaning answer to question 1-Ed]. Selling in US dollars means that landing costs will go down so increasing retail penetration.

Arturs Saveljevs, Riga International Airport: I think that it could be the same or a little bit worse due to the security restrictions etc.

Foster Fu, Beijing Capital International Airport: Much better. The third terminal will come into being in 2007 and ahead of the upcoming Olympic Games.

George Horan, Dubai Duty Free: 2007 will be much better than 2006 for reasons mentioned in answer to question one, and, of course, our commitment to enhancing the level of customer service.

Francisco Heredia Lafuente, London Supply SA: 2007 will be better in our region (South America), because we are receiving more and more international tourism, the reasons: Our region is very cheap for people who have dollars, euros or yen; South America is a safe destination considering the terrorist threats.

Howard Amor, Owner, Zero Group: 2007 will be better for us. The more listings we have, the more we get as a result.

Colin Hargrave, BAA: Tougher: Exchange rate US$ to ?; interest rates; customer confusion/security rules.

Wim Heemskerk, Dufri International: (1). Our business will grow due to the demand of LCD TV ( Military business) and the demand of MP3 and more featured digital cameras; (2). Depending on the dollar we could grow. If the dollar stays as it is, we will not grow in dollar-related countries.

Frank J Zhang, China Duty Free Group: I think it will be better. China's new leader group will pay more attention to the stability and healthy development of its economy and policy; America's world policy will be more mild during this period before the new selection of the next president; Peace and development will still be the two main topics of the world, while world economy and policy is still facing risk in the up and coming two or three years.

Doug Benham, Brussels Airport: 2007 will be better because: (1). Operational issues (security) should not be worse than 2006; (2.) traffic growth should be stronger; (3). Benefits of investments and developments.

Simon Au, Sky Connection: The outlook of 2007 is promising and will be better than 2006, particularly in the Mainland Chinese market.

Ray Martin, Travel Retail Training UK: If the terrorist threat is minimal then I see no reason why we should not expect to see a better trading environment – the show must go on!

Steven Candries, Guylian: 2007 will not be an easy year. The past year or even years have been years of heavy promoting and price flouting… credibility of the brands was at stake. In order to make the industry healthy again, we must go back to normal trading with affordable promotions for all. The '3 for 2' is almost like a BOGOF (buy one get one free). You only do this when the goods are nearing expiry dates or are out of fashion. Yes, we also do these promotions, but if you don't, there is no sales and there is no result to keep you in the front line.
The security reasons as explained in question 1 is the other issue. It seems to be a time of restructuring since the mergers and globalisation of operators with a number of people coming and going… this brings challenges on both sides.

Theodore Gitzos, Hellenic Duty Free Shops: Worse. Economies will be worse as well.

Jean-Pierre Cointreau, Pages Vedrenne/Chateau Paulet: Will be better, especially in Asia IF no new terrorism event occurs.

Mark McKenzie, SR2000: Major markets in NSW & Victoria continue to suffer low growth due to labour skills shortages and booming resources-driven economies in Queensland & Western Australia.

David Thompson, D. G. Thompson International: Yes, as we trade in Indo Chine those countries will have major increases in tourism.

Donatienne de Fontaines-Guillaume, Cosmopolitan Cosmetics: Difficult for the whole year. 2006 was tough only after August 10th… we will have to solve the transit passenger issue, live with passenger confusion and very low penetration due to long queues at airport security check points.

Mahendra Thakar, Flemingo International: Keeping trend in travel, tourism and hospitality industries general growth pattern for last 10 years; the belief is that there would be growth between 5 and 10%.

Mireille Sarthou, Herve Leger Parfums: Will get better.