In the second of an exclusive two-part video interview with TRBusiness, Avolta Chief Executive Officer Xavier Rossinyol takes a stance on new market opportunities and discusses why awakening Chinese international passenger traffic spells good fortune for the DF&TR industry (scroll below to view).
Previously, Rossinyol spoke to TRBusiness about the reaction to and vision behind Avolta, the refreshed corporate branding for the Dufry-Autogrill business combination unveiled last month (you can watch the part 1 video interview by clicking the below link).
Shares in Avolta AG began trading officially this week on Switzerland’s principal equity market, SIX Swiss Exchange, following shareholder confirmation of the powerhouse travel retail and F&B firm’s new fascia.
During the conversation, conducted during the TFWA World Exhibition, Rossinyol considers the yet-to-be-witnessed exodus of international travelling spenders from China and what that means for the future of global travel retail.
New markets, calculated bets
“I tend to focus on opportunities more than concerns, maybe because Avolta has the most diversified portfolio and we are practically exposed to all the nationalities of the world,” he observes.
“Over the last 30 years, we have seen that different geographies, nationalities and profiles change over the years… but overall, passengers keep growing year after year. If you are exposed to a very big number of passengers and in one or two years one or another nationalities is stronger than another, it is less of a concern than if you focus on one nationality.”
While acknowledging the size and consumption profile of Chinese travellers as historically “a big driving force in the industry”, Rossinyol noted that the currently suppressed volumes of international travellers outside China itself – the arrival of the Golden Week holiday in early October spawned media reports on the revival of the domestic tourism business – means any future growth for the outbound travel sector only be positive.
“Some people say it will take longer or shorter to get to 2019 levels; I’m relatively unconcerned about that as [Chinese international travellers] will come back one day but anything […] is better than what we have today,” he said.
With sales this year tracking ahead of 2019, Rossinyol confirms this has been achieved without certain key nationalities.
“For me, the Chinese coming back is not a concern, only an opportunity,” he described.
During the roughly 15-minute exchange, conversation turned to Hainan and the anticipated seal-off in 2025, when the island province is expected to introduce its own independent customs regime in a significant fillip for the duty free luxury goods market. At the same time, there are hopes it will unlock the spending power of local shoppers and visitors alike.
“My best estimate is that Hainan is here to stay; to be a relevant driving force in the industry,” commented Rossinyol, pointing out that the likes of Hainan, Hong Kong and Macau will be likely draws for those Chinese travellers closest to home, but added that Hainan would perform a “complementary” role rather than replace the importance of other travel and spending destinations.
Asked about markets of possible business intervention in the future, Rossinyol chose to play his cards close to his chest, giving little away. Nonetheless, he did make clear that the timing will be crucial: “We are making some short-term bets, but also some very long term bets. There are some markets where we want to be and where it will take time. You need to bet on the places where it is not so obvious, but everywhere in Asia Pacific is one of our key priorities going forward. We are here for the long term.”
Avolta’s CEO also touches on the company’s Destination 2027 strategy.
As reported, Dufry/Avolta’s nine-month turnover reached CHF 9,578.9 million, up 24.8% year-on-year on an organic basis.
Watch the full interview above.