TFWA President Erik Juul-Mortensen speaking at the TFWA World Conference 2024.

In his farewell state-of-the-industry address before stepping down at the year end, TFWA President Erik Juul-Mortensen highlighted pivotal moments in the history of the duty free and travel retail (DF&TR) industry and how he sees a bright future ahead.

To kick-start the 39th TFWA World Conference, Juul-Mortensen took to the stage to offer his perspective on the industry’s immediate and long-term future during this time of considerable change.

He took delegates on a journey, referencing the first edition of the event in Nice in 1985 through to the present day as stakeholders join hands to celebrate the 40th anniversary of the founding of the Association.

“TFWA was the brainchild of two bright ambitions men – Patrick Moniotte and Jean-Philippe Haumont – who decided to replace an existing commercial exhibition and shape the future by creating the Tax Free World Association on a not-for-profit basis,” he explained.

“Its ethos was and remains: ‘By the trade for the trade’.

“Patrick and Jean-Philippe shared a vision of others in the industry and the first management committee was formed, representing all the different categories. The committee members became ambassadors persuading brands and retailers to participate in TFWA’s first trade event in 1985.”

The four original TFWA management committee members.

In the audience today were four of the original management committee members – Ian  McLuskie, Alain Bonardo, Massoud Esfandiary and Juul-Mortensen himself (pictured above).

He also paid reference to the early days of the trade press, spearheaded by Doug Newhouse (then editor of ITC Tax Free Marketing magazine and who went on to co-found TRBusiness with Nigel Hardy and Janice Hook in 1997) and his colleague Sarah Branquinho.

He painted a picture of the very first TFWA exhibitor in Cannes, attended by the likes of Harry Diehl, Colm and Breeda McLoughlin, Alberto and Pancho Motta, Sachio and Takako Asaki and Gunnar and Claus Heinemann.

“TFWA World Exhibition & Conference in its current form would not exist without the vision and tenacity of those who believed on its founding principles and championed its cause.”

A $60 billion industry

Juul-Mortensen charted the growth of the DF&TR industry over the past 40 years, with its turnover growing from around US$5 billion to well over $60 billion.

He talked about the storms the industry has weathered, from the financial crisis to armed conflicts, all the while helping to build a more connected world.

“Our industry has even boosted by waves of tourism but it has also been driven by socio-economic change – the first package holidays, the opening up of travel to the masses with low-cost airlines the popularity of cruise for the old, young and everyone in-between,” he said.

“Only a fool would try to guess what the next 40 years would bring so let us look at the market today.

“Air passengers are the lifeblood of DF&TR and ACI world figures give us reason to be optimistic.”

He quoted the statistic showing a forecasted 11.5% increase in global passengers in 2024 (versus 2023), putting passenger traffic above pre-Covid levels.

ASCI World data showing international and domestic passenger statistics for H1 2024 including the uplift compared to H1 2023 and H1 2019.

“In the first half of 2024 international passengers were up 1.4% on H1 2019 while domestic passengers were 1.3% higher.

“As we know, the recovery is unevenly spread geographically. The Middle East and Africa bounced back strongly in the first half of the year, followed by Latina America while North America and Europe were more measured.”

He went on to pinpoint how Asia Pacific was still below 2019 levels, although this deficit is reducing.

“ACI World’s long-term outlook is encouraging,” he said.

Indeed, the data shows a predicted recovery to the 2019 level by the end of this year (9.78 bn passengers), reaching 19.5 bn by 2042 and 24.5bn by 2052.

However, the end of revenge travel and lower spend per head is making an impact, with some retailers in the Middle East and Europe suggesting that sales growth is sometimes slower than passenger growth, reflecting reduced per capita spend among travellers reluctant to shop in uncertain economic times.

“Research shows two aspects vital to attract today’s travellers are value and personalisation,” said Juul-Mortensen.

He stressed the power of perceived value encompassing qualities such as functionality and convenience, in addition to accessible pricing.

Personalisation, he said, resonates especially with younger travellers.

These insights are thanks to a new Euromonitor study commissioned by TFWA, which will be revealed in depth at Tuesday morning’s workshop.

TFWA President Erik Juul-Mortensen receives a standing ovation for his farewell state-of-the-industry address.

He also highlighted the growing importance of the cruise sector, which is forecast to account for 40 million passengers by 2027.

Meeting the needs of tomorrow’s passengers

For the industry as a whole, he stressed the significance of digitally savvy Gen Alpha (born between 2010-2025) as the consumers of tomorrow that will shape retail strategy for years to come.

“Their use of the internet is all aspects of their life will affect store design and will further push services such as Click & Collect,” he said.

He added: “Both Gen Z and Gen Alpha are highly aware of social and environmental matters – they expect see diversity and inclusion in the media and advertising they encounter. Their heightened climate consciousness makes sustainability a key criteria in their consumption choices.”

Ultimately, he stressed that: “Brand experiences in travel retail must move beyond core physical products to tell a story that is relevant to their consumers’ lifestyles. That’s not easy in a market where retailers and and brands have limited space and where sales per square metres are closely monitored.

“Unquestionably, however, brands lie at the heart of this industry, without brands there would be no duty free and travel retail. Brands’ ability to innovate and entice is what drives our development, which is why events like this one are so important providing an opportunity for brands and retailers to explore the best options for our industry to grow.”

Juul-Mortensen underlined how defending the industry from “heavy handed or even misguided legislation” is equally as important as efforts to grow it.

“In tough economic times, governments are always looking to close text loopholes.” he warned. “Our industry, which is often misunderstood by politician represents a tempting target.”

On standing firmly behind the vision of the industry, he said: “We must remain vigilant, present travellers with a clear proposition and provide no grounds for others to question our status.”

He urged more stakeholders to sign the Duty Free: Trusted, Transparent, Secure declaration launched by TFWA and DFWC, which includes a commitment to doing business only with companies that have clear anti-illicit trade policies in place.

As his speech drew to an end, Juul-Mortensen received a standing ovation – a tribute to his impactful tenure as President (Juul-Mortensen will step down in December). He paid tribute to this colleagues at TFWA and on successive managements committees and boards.

“Their dedication and commitment have made my job as President not only easier but also more enjoyable than it would otherwise have been so from me a very big thank you to all.

“Duty free and travel retail is a marketplace that changes constantly and TFWA must change with it. I firmly believe the Association is in a good shape to do that… responding to members’ needs and providing the industry with platforms to prosper.”

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