Online pay & collect impetus at Argentina’s airports, reveals ASUTIL

By Luke Barras-hill |

ASUTIL shared updates during a panel session on Tuesday 12 April dubbed ‘LATAM moves forward’.

Asociación Sudamericana de Tiendas Libres (ASUTIL) has applauded a recent move in Argentina to allow shoppers to purchase online and collect duty free items at the country’s airports.

The regulatory change, agreed with Argentina’s customs authorities, boosts a regime that was previously limited to reserve and collect with travellers having to pay instore and retrieve their items, TRBusiness understands.

In addition, ASUTIL is engaged with relevant authorities in Uruguay to permit travellers to exhaust their remaining duty free allowance through online transactions up to 10 days after travelling, though an agreement has yet to be struck.

It is gathered these discussions are also ongoing with regulatory authorities in Brazil and Argentina.

PAX COMEBACK AT INTL HUBS

The developments emerged during the Summit of the Americas held this week at the Palm Beach County Convention Center (10-13 April) in West Palm Beach, Florida.

A session entitled ‘LATAM Moves Forward’ offered shrewd observations on the pace of the regional industry’s recovery and key market developments from Gustavo Fagundes, President, ASUTIL; Enrique Urioste, Vice President, ASUTIL; and José Luis Donagaray, Secretary General, ASUTIL.

Above and below: Brazil’s infant land border duty free business has lost two shops during the Covid crisis, but a further four are set to open.

Sharing his thoughts in an opening address, Fagundes painted an optimistic picture for the trajectory of the passenger traffic revival in South America.

In the 12 months ending December 2021, the decline in total pax across the region stood at -49% of 2019 pax volumes. This compared with -59% in December 2020.

In December 2021, domestic numbers were beginning to return to levels witnessed in 2019 and in some markets growth has surpassed 2019.

February recorded an approximate 77% restoration of pre-pandemic passenger levels across the region.

He said the most important hubs within the region are growing their international volumes more positively than the secondary locations.

With that in mind, LATAM is eyeing an approximate 70% recovery of 2019 pax levels in 2022 as the regional air network restores.

Key tourist destinations such as Cancún International (CUN) in Mexico, for example, is showing faster gains than Mexcio City International Airport [Cun restored 75% of its pax in 2021 to reach six million. click here for further detail in the TRBusiness March/April e-zine].

At the beginning of 2020, the duty free allowance ceiling for purchases on arrival at Brazil’s airports was lifted from US$500 to US$1,000 and the average ticket has improved as a result.

“The allowance is key for us first of all because the [product] portfolio can move better,” Fagundes told TRBusiness separately.

“We have some items we are bringing to [take advantage of] the $1,000 allowance. By adding home delivery, this allows people to purchase big things and what we see is although we are targeting 3% of the buyers, when you multiple this by $1,000 and compare with the average ticket, this is very relevant for us to boost sales.”

HYBRID TRAVEL BLENDS WORK AND PLAY

Reflecting on the challenges of the past two years, Urioste said the incidence of high minimum annual guarantees coupled with a zero-income scenario at airports forced to shut their shops was a ‘really heavy backpack’ to carry, as operators battled to protect P&L.

“We were lucky with most airports; we were able to get some waivers and push forward, but with others we couldn’t,” he admitted.

In instances where governments were only able to offer minimum income support, the monies was used to create an unemployment support fund for staff.

During the session, Fagundes touched on several changes being witnessed in the pax profile across the region, including a tendency for more family and holiday travel that is helping to stimulate airline movements.

Business travel on the other hand remains weaker, albeit narrowly.

“We have some blended travelling which is interesting; although families are going [on trips], it is clear that parents will work wherever they are,” noted Fagundes.

After more than two years of the pandemic, Latin America’s duty free and travel retail market is experiencing a climb back in passengers and shift in shopper profiles.

“Sometimes the business traveller is there, but it isn’t the typical one that is alone. It is becoming more difficult to realise who is the business and leisure traveller.”

Fagundes pointed out that more hybrid travel plans involving business and work trips means it is becoming more difficult to ascertain the traveller profile.

He went on to mention that reserve and collect is ‘booming’ and home delivery, for instance in Brazil, is ‘key’ as leading operator São Paulo/Guarulhos Airport (GRU) handles 75% of the passenger numbers in Brazil.

HARMONISING THE SALES MIX

On the current state of Brazil’s land borders duty free market, Fagundes noted that while the volume is down, spend per pax is up.

Meanwhile, a public declaration from Uruguay’s government acknowledging DF&TR’s importance and relevance to the tourism industry was ‘very good news’ according to Fagundes.

Left to right: Gustavo Fagundes, President, ASUTIL; Enrique Urioste, Vice President, ASUTIL; and José Luis Donagaray, Secretary General, ASUTIL.

In Uruguay, the main challenge exists with products that are permitted for sale across the border in Brazil but not in Uruguay – an issue ASUTIL is working to harmonise.

The past two years have not been easy for Brazil’s fledging land border business, which features around 20 stores.

During the Covid-19 crisis, two stores were lost but four more are due to follow.

“Resilience is the name of the game; we’ve lost two [stores] out of 20 and have four coming,” said Fagundes. “We are still in a very young phase but believe this is going to be a very strong sub-category of the industry in the medium term.”

For more on Brazil’s developing land border market, click here to read a report in the March/April e-zine.

Europe

MAN 'very sorry' after power spike cancels flights

Manchester Airport (MAN) Managing Director Chris Woodroofe has issued an apology to passengers...

International

Vantage rebrands as airports manager and investor looks to the future

Vantage Airport Group (Vantage) has announced a corporate rebrand to Vantage Group. The...

International

Arnaud Lagardère reinstated as Chairman and CEO of Lagardère

On the proposal of Jean-Christophe Thiery, who had been appointed to the position on a...

image description

In the Magazine

TRBusiness Magazine is free to access. Read the latest issue now.

E-mail this link to a friend