Airports Council International: A radical transformation of airport retail

Dubai, 4 February / WAM / Airports Council International, Asia-Pacific and Middle East, the body representing more than 600 airports in 44 countries and territories, revealed the results of a specialized study entitled “Travel Retail in the Post-Pandemic Era”.

According to the study, the results of which the Council reviewed during a conference in Dubai, Emirati passport holders are among the highest spenders at airports, as they rank second after the Chinese.

The study showed a profound structural shift in the dynamics of retail trade at airports, as travelers from young age groups became the main driver of spending, at a time when traveler behavior and demographic composition became the decisive factor in the performance of retail trade, instead of traditional reliance on passenger numbers only.

The study was prepared by Airports Council International (ACI) for the Asia-Pacific and Middle East region in partnership with Auran and Steer, and included 36 major airports in 21 countries, and was based on the opinions of retail operators and travellers.

The results confirmed that, although air traffic has exceeded pre-pandemic levels, the growth of travel retail has become primarily dependent on the diversity and composition of travelers, their preferences and purchasing behavior.

According to the study, 56% of participating airports reported that their commercial revenues exceeded 2019 levels, and 44% of airports expect commercial revenues per passenger to rise during the next twelve months.

The food, beverages, perfumes and cosmetics categories topped the list of best-performing sectors after 2019.

The study showed that Millennials and Gen

Unlike the older generations, who remain more price sensitive and more conservative in purchasing categories, the two younger generations are driving demand for luxury goods, perfumes and cosmetics, along with a clear preference for local products with a cultural dimension, which enhances the demand for destination-related purchases supported by storytelling and the authenticity of the experience.

Stefano Baronchi, Director General of Airports Council International, Asia-Pacific and Middle East, said: “The traditional assumption that commercial performance automatically grows as the number of passengers increases is no longer reliable. As passenger behavior becomes more heterogeneous, financial results depend more on the quality of passengers, rather than the quantity of passengers.

He stated that non-air revenues, retail trade and duty-free shops play a pivotal role in airport business models, and airports that align their commercial strategies with the changing behaviors of travelers are better able to manage revenue fluctuations, maintain their investment capacity and enhance their competitiveness in the long term.

Duty free shops are an essential part of the modern travel experience, providing travelers with a variety of products without paying the taxes and duties imposed on regular goods.

These markets are an important economic pillar for airports, contributing significantly to revenues and helping to improve the financial performance of airports.

In the Middle East, duty-free sales constitute a significant share of commercial revenues, with highs ranging from 31% in Saudi Arabia and 36% in the UAE, to 38% in Qatar, 34% in Bahrain and 31% in Oman.

The study showed that the highest levels of spending currently come from travelers from China, India, the United Arab Emirates and Saudi Arabia, as a result of the nature of travel segments, travel purposes and purchasing patterns in these markets.

The study showed that China is leading the recovery in domestic and international spending, with spending on luxury goods equivalent to twice the Asia Pacific average, while there is significant growth in international spending and free market spending in India, driven by brand aspirations and tax benefits.

As for the UAE and Saudi Arabia, travelers have high incomes and a rich culture of giving gifts as an expression of appreciation and social relationships, which puts them at the forefront of buyers.

Despite the growing digital use, the majority of purchases still take place within stores, as about 70% of purchasing decisions are of an impulsive nature, and digital interaction currently contributes no more than 2% of additional sales, and its role is focused on supporting the journey experience.

The results showed a significant convergence in the performance of retail categories between Asia-Pacific and the Middle East, with luxury goods, perfumes and cosmetics leading sales in the two regions, followed by electronics, supported by price advantages and ease of last-minute purchases.

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