Despite inflationary pressures, unrest in the Middle East and Eastern Europe and mixed experiences around the evolution of the concession model, the lion’s share of respondents to TRBusiness’ 20th-anniversary-year Global Industry Survey are envisioning an improved travel retail trading environment in 2024.
A total of 71.2% of duty free and travel retail (DF&TR) executives who took part in the survey believe it will be “better” than 2023.
The sentiment closely echoes the results of last year’s survey, which showed that 74% respondents thought 2023 would be “better” than 2022.
Crunching the Global Industry Survey 2024 data further shows that 26.4% of participants think this year’s trading environment will stay “the same”, leaving just a small minority (2.3%) of those who see it being “worse”.
The state-of-the-industry report demonstrates that respondents are largely upbeat about what lies ahead, as the global travel retail industry continues to recover from the shockwaves of the Covid-19 pandemic.
At the 2023 Tax Free World Association (TFWA) World Conference in Cannes in October, TFWA President Erik Juul-Mortensen delivered a rallying speech, underscoring how the business is facing its big ‘moment of truth’ as the build back continues and certain challenges persist.
Spend per passenger plummeted 29% in 2022 to just US$17 according to the Kearney report carried out as part of the TFWA Insight series, disrupting what the authors describe as a decade of GTR growth.
At the global gathering, Juul-Mortensen said: “Our industry must transition from a one-size-fits-all approach to segmented value propositions, tailored to each customer segment across four pillars: assortment, experience, services, and price and promotions.”
Comments shared exclusively with TRBusiness for the survey offer a compelling insight into how leading stakeholders are visualising the year ahead.
“There is a lot to look forward to in 2024,” said Avolta CEO Xavier Rossinyol. “We are seeing a lot of expansion in terms of new airports and infrastructure, driven by the ongoing and increasing demand for travel.
“Emerging markets such as Asia and Africa, for example, are seeing significant growth in travel driven by their expanding and younger populations and their increased wealth.”
Lagardère Travel Retail Chairman and Chief Executive Officer Dag Rasmussen commented: “We expect travel retail to confirm its positive tendency in 2024, even though economic conditions and geopolitical instability will continue to impact consumer spending and travel patterns.”
Aer Rianta International CEO Ray Hernan was also among the roster of high-profile contributors to this year’s state-of-the-industry report.
He said: “Since 2023 saw a return to normalcy for the first time following the pandemic, the anticipation is 2024 will continue to see a strong appetite for leisure travel.
“Expectations are that we will see some growth in top-line sales, but importantly passenger volumes and passenger average spend are more likely to return to a more normal trading and growth pattern.”
Added Florian Seidel, Chief Sales Officer, Gebr. Heinemann: “We are positive about the new year and expect an increase in demand compared to 2023. We think that the market will remain as dynamic as it was last year and is prepared to grow in this environment, across various channels and business model.”
Comments from these high-profile senior executives and many more can be read in full in the January issue.
The Global Industry Survey 2024 posed a number of other multiple-choice questions to respondents to garner opinion and sentiment on topical talking points and dynamics impacting the global gravel retial business.
As our pie chart above shows, 63.2% of respondents think the rising cost of travel and inflationary pressures across the globe will have just a “moderate” effect on spend per passenger in DF&TR in 2024, whereas 26.4% believe it will be “significant”.
Furthermore, 43.6% of respondents believe unrest in Eastern Europe and the Middle East will colour the way the DF&TR industry is able to trade in those regions, although 45.9% are “unsure” of the impact.
When asked which traveller demographic is currently providing the biggest share of their organisation’s sales in the channel, 30% cited Generation Alpha.
This could demonstrate how the children’s market, and catering to the needs of families may influence the category mix.
The Global Industry Survey is an independent and impartial piece of research run by the editorial team at TRBusiness.
“It is a vital temperature check of the industry, shedding light on a variety of issues that are the subject of hot debate through expert opinion in order to help stakeholders interpret and navigate the year ahead with confidence,” said TRBusiness Editorial Director Luke Barras-Hill.
“We thought long and hard about the questions to ensure our free-to-access report provides first-hand intelligence and utmost value for our growing audience.”
This year’s coverage features contributions from an impressive roster executives from companies including Avolta, Lagardère Travel Retail, Aer Rianta International, Dubai Duty Free, Gebr. Heinemann, Lotte Duty Free, Groupe ADP, Heathrow Airport, Fraport, Qatar Duty Free, Duty Free World Council, TFWA, Newmark, Tallink Duty Free, and many more.
“We urge you to read their in-depth responses and to utilise the survey as a reference tool to aid your decision-making during this year and beyond,” added Barras-Hill.
We hope you enjoy delving into the report in our January issue – stay close to TRBusiness for more extended versions of the responses submitted. Thanks to all those who participated for sharing their candid comments and views on the industry.
Note: The Global Industry Survey 2024 was conducted from 17 November 2023 until 4 January 2024. Some of the views expressed are representative of individuals, rather than their entire organisations.