TRBusiness Annual Survey: Key statistics revealed

By Luke Barras-hill |

China ended its quarantine policy for inbound travellers on 8 January 2023 in a major step towards unlocking the country’s international borders. Source Shutterstock

While more than half (54%) of respondents in the TRBusiness Global Industry Survey 2023* describe the impact of supply chain and logistical challenges confronting the trade as ‘high’ or ‘very high’, in excess of three quarters (88%) have expressed confidence that this year’s trading environment will be ‘better’ or ‘much better’ than 2022.

Nudging three quarters (74%) of respondents believe that the travel retail business environment in 2023 will be ‘better’ than 2022, but less than a fifth (13.6%) signal the coming year will be ‘much better’ than the previous one.

A smaller percentage (12.1%) view this year’s trading climate as either ‘the same’ or ‘worse’ than last year.

As a staple fixture of the travel retail calendar, the Global Industry Survey once again attracted a wave of high-calibre responses – you can read the full report in the January e-zine by clicking here.

Of those that responded, almost half (49.2%) were suppliers/agents/distributors, with just over one fifth being retailers/concessionaires (23.9%). Airports (11.9%), other channels (7.5%) and agencies (7.5%) made up the total.

Meanwhile, nearly half (46%) of individuals/companies that responded to the survey were ‘satisfied’ with their corporation’s diversity and inclusion strategy.

NEW: Exclusive online polls

For the first time – and in a novel twist this edition – TRBusiness conducted a series of online-exclusive polls** as an addendum to the Global Industry Survey.

One of the polls revealed that more than two fifths (41%) of respondents believe trained shop floor sales staff will be the most effective tool for driving consumer engagement with DF&TR brands and products in 2023 – you can read all three polls by clicking here.

While 2022 was described by one respondent as a ‘critical milestone’ in the recovery, clearly, there are hurdles and uncertainty persists – macroeconomic fragility, exacerbated by the ongoing Ukraine conflict and associated energy crisis; rampant inflation; cost of living pressures; and supply chain challenges, among others.

In the UK, the Brexit hangover on cross-channel sales caused by the removal of the VAT concession (aside liquor & tobacco) remains a stark issue.

However, travel restrictions for much of the globe have now eased and traveller confidence is, for the most part, restoring.

While caution should be exercised on the pace of the rebound – unclear quarantine rules in some countries mixed with global inflation and interest rate hikes remain obvious headwinds – the anticipated ‘orderly’ return of outbound travel from China has emerged as an exciting and timely development.

Diversifying retail approaches

Indeed, many retailers have worked hard since the pandemic to diversify their customers bases beyond travellers from China.

The Shilla Duty Free’s Executive VP/Sales HQ Younghoon Kim commented: “We diversified our sales strategies to target customers from other countries in addition to China, including Korea as well as Southeast Asia.

“We also launched a reverse direct purchase online store that would be able to address the constraints of cross-border movement restrictions, on top of an extensive digital transformation to meet the contract-free shopping needs, including AR, metaverse and O2O (online-to-oflline) stores.”

Likewise, airport landlords are reporting passenger gains in their terminals from different territories.

“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,” reminded Fraport AG’s Nina Kristin Gür and Christian Sültemeyer.

Xavier Rossinyol, Chief Executive Officer, Dufry: “What we have seen during the recovery is […] demand has first resumed within convenience and duty paid assortments. With a slight delay, as soon as international and intercontinental routes were opened, duty free products have recovered fast as well and the traditional mix of duty paid and duty free products, including the weighting of the single categories, has been restored.”

“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.”

Casting an eye across the spread of responses, a consensus emerges: travelling consumers’ habits (versus pre-pandemic) have changed, in some instances irrevocably, and diversified products and services are the new rules of the jungle.

“[…] New customer profiles have emerged and we have identified three of them, which we will cater for with the implementation of our new strategy Destination 2027,” Xavier Rossinyol, CEO, Dufry Group told TRBusiness.

“However, we also need to be aware that new profiles will continue to evolve and we need to keep adapting to changing needs and behaviours.”

Gebr. Heinemann’s Co-CEO Raoul Spanger points to observed changes in travel frequencies.

“We are observing a change in travel behaviour and expect a shift in peak seasons,” he noted. “Whereas we are used to seeing a peak in business travel from March to May and again in autumn with another peak in holiday travel in summer, for example, we recorded steady sales numbers above our expectations from April to October 2022.

“Travel was heavily concentrated in this period, as passengers were afraid that Covid restrictions might come back in winter.”

Elsewhere in the survey, increased appetite for ‘hybrid’ retail concepts emerges as a powerful driver for change.

Heathrow Airport and Aena, for example, are investing their energies into improving the interplay between physical and digital retail options.

Sustainability also continues to be front-and-centre for companies across the value chain.

Interestingly, almost two fifths (39%) of respondents are concerned about ‘green hushing’ [being cautious of publicising sustainable goals and achievements to avoid scrutiny and for fear of being seen to be greenwashing] within the industry.

Click here to read the Global Industry Survey 2023.

*TRBusiness would like to thank all those who completed the Global Industry Survey. It was conducted during Nov 2022 up until the second week of Jan 2023, attracting 67 responses. 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.

**Three polls, conducted on LinkedIn, ran for two weeks in Dec and attracted a total of 169 votes (combined). Respondents were invited to vote for one of four options per question posed by TRBusiness (as outlined above).


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