The equation for success in the travel retail industry

Post COVID-19, particularly after the reopening of international borders for businesses, the trend of sustainable tourism has been gaining momentum with increased travellers, providing a strong rebound in auxiliary industries of travel and tourism like travel retail, accommodation, sightseeing etc. From retail to restaurants, all dependent businesses are looking forward to double-digit revenue growth in the next 5 years. Heavy investment has been pouring into travel retail to gain more out of the ongoing rebound. New concepts like sustainable travel and circular tourism further accentuate the growth of the travel retail industry. The new channel strategies of guaranteed pick-up and buy-and-pick-up in duty-free shopping are revolutionizing the consumer purchase experience.

2023 was the year of expansion for the travel retail industry. It has witnessed growth in retail segments of duty-free and duty-paid shopping. Competitors are exploring new avenues of travel retailing including e-commerce, and metaverse shopping. The primary motive behind exploring the new avenue is the growing trend of revenge shopping during travel. The concept of revenge travel has gone one level up for travel retail purchases. Revenge travel is directly influencing revenge shopping among travellers worldwide, which is good news for the travel retail sector.

Major Events

Avolta’s new JV at Kempegowda Airport

Avolta and Bangalore International Airport Limited (BIAL) entered a joint venture on 14th Feb 2024 for their new retail and F&B offering at Kempegowda International Airport Bengaluru (KIAB). This joint venture consists of 2 duty-free stores of a 3,630sqm retail area and 15 F&B outlets.

The KIAB stores will be operational with Avolta under a 15-year contract at the airport’s new Terminal 2 in late 2022. The unique design of the terminal has a 1,740sqm walkthrough departures store. The departure stores have been themed by the?Lablagh Botanical Gardens. However, the 1,896 sqm?arrivals?store is operational from the high-rise urban centre. Under the vision of “terminal in a garden”, the 14 new F&B spaces have followed this garden theme developed by The Design Solution agency.

China expands Hainan visa-free entry options

China has implemented a visa-free policy across the southern island province of Hainan. The visa-free policy now allows entry of visitors for more purposes including tourist visits, VFR, medical treatment, sports etc., the relevant authority announced Friday. Under this new policy, the visitors can extend their stay in Hainan Province for up to 30 days.

According to China's National Immigration Administration “Starting Friday, visitors from countries such as Russia, France, the United States, Brazil, Japan and the United Arab Emirates are allowed to enter Hainan visa-free for purposes including business, a tourist visit, visiting a relative, medical treatment, an exhibition or sports, said in a statement.”


Avolta Expanded Operations at Dusseldorf Airport

Avolta has extended its partnership at Dusseldorf Airport by opening its flagship Le Crobag outlet. The new outlet would bring more to travellers in terms of food options. The 190 sqm outlet is located at the airside at Dusseldorf with an exclusive design and a golden logo, the outlet offers various cuisines in the QSR segment. Beyond other French bakery iterations, it has a bar and foods such as tarte flambé

Lagardère Travel Retail started Duty-Free and F&B Outlets at Abu Dhabi Airport

Nov 2023, Lagardère Travel Retail through a joint venture with Abu Dhabi Capital Group opened 12 Duty Free and 6 Food & Beverage outlets at Abu Dhabi International Airport. Through this joint venture, Lagardère Travel became one of the largest concessionaires in the new?Terminal A. An additional retail unit and a restaurant are planned to open by mid-2024. The new expansion is set to launch the post-opening of the US pre-clearance facility of the new terminal to the public.

Le Gourmet, a flagship fine food store with the rich culinary heritage of the region offers cuisines from regionally sourced products and globally celebrated brands. The offering of the store reflects the best of Arabian gastronomy.

Author’s Note

Sustainability is going to be the most defining trend in the travel and tourism industry. The trend of opting for circular products is growing rapidly across Gen Z and millennials. Consumers, particularly millennials, are preferring products from eco-friendly brands. These young buyers are connecting themselves with sustainable values over other generations of shoppers.

It is not just about the product or category but other sustainable services and experiences that are environment friendly. From sustainable store designs to product packaging, every stage in the travel retail industry is now an important part of the sustainable shopping experience.

Environmental concerns are not just limited to product and store operations but are also inclined toward the impact on the entire supply chain and other related operations of companies. The sustainable disruptions are targeted towards raw materials sourcing, effective water consumption, pollution management and waste disposal.

About Paper

This paper delves deep dive into trends, practices, expansion plans, future revenue opportunities and white space available for travel retail stakeholders. We have also examined the top strategic developments of the industry and the actors behind it. The paper focuses mainly on the consumer purchase side of the travel industry by exploring new avenues for the channels, the historical performance of the market, sustainable offerings, and circular economies of the travel retail industry. Our goal is to harness more professional insights into the travel retail industry for operators, airlines, and other prominent brands competing in the travel retail market.

Through this paper, Allied Market Research presents crucial insights on the overall travel retail ecosystem enabling stakeholders to remain up to date and seize the growth opportunity of the ever-evolving market landscape.

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