A simple reason why 2023 has the potential to be a powerful profit-making year for airport retailers and brands is that people spend more time at the airports when they transfer.
VALENCIA – Travel data firm, ForwardKeys, latest air ticketing data reflects a better year for travel retailers and airports as post-covid consumer preferences swing in a more premium direction. Despite the economic slowdown, business travel continues. As airlines and airports are scrambling to rebuild air connectivity with Asia, some Eastern European airports have managed to position themselves as credible gateways to Europe and North America.
Business travel shows resilience in 2023
Despite the economic slowdown, business travel is on an upward trend. This is great news for travel retailers, duty-free operators and brands as business travellers are a key audience for luxury goods at the airports.
Intraregional Europe business travel made a comeback in 2022 and now it is time for APAC business travel to make a return.
Business travel from Japan is stronger than its leisure equivalent. Europe is attracting the business crowd from Japan through Frankfurt, Paris, London and Istanbul. Istanbul Airport is in a strong position in this market, up by 13% in Q1 of 2023. More than 90% of those tickets booked are for transfers to Italy, Germany, France, and Spain.
“What is aiding this hot trend are two things. Seat Capacity is above 74% of the 2019 levels and the lower cost of airfares when compared to flights from Japan to Germany or France,” says Olivier Ponti, VP of Insights at ForwardKeys.
With travel restrictions now eased in China and Southeast Asia new opportunities have opened. According to bookings for travel in Q1, the share of single Chinese travellers travelling abroad has increased from 25% in 2019 to 40%, and the share of passengers flying in premium class has increased from 10% to 17%.
Changing airport gateways per source market
The data at ForwardKeys can be used as a game changer in your travel retail business strategy this year and if you are not using it already, you ought to add it to your budget this year as it will save you from futile campaigns targeting the wrong audiences.
Is your travel retail store or brand doing enough at the following airports in terms of product selection, brand ambassadors or bi-lingual staff? Returning to pre-pandemic levels, or even growing, does not mean getting back to the situation as it was in 2019. Traveller behaviours have changed, and global air connectivity is very different, as can be seen with the examples of travel from the US to Europe, and outbound travel from India.
In Q1, US travellers are flying and increasing the number of travellers into Lisbon (+106% vs 2019), Copenhagen (+68%) and Istanbul (+62%). Moreover, they are staying longer and increasingly taking multi-destination holidays. The top destination pairs from the US remain the UK & France, and France & Italy, but new pairs are emerging like Denmark & Sweden (+127%), Portugal & Spain (+116%) and Turkey & Greece, +32%.
As India is roaring to get back to long-haul travel, its residents dare to test new itineraries. For example, the new air connectivity put in place between India and Warsaw Airport means that Warsaw Airport has witnessed an unprecedented triple-digit growth versus the pre-pandemic period from Indian travellers heading towards the US or key destinations in Europe.
More good news for duty-free and travel retailers…
A simple reason why 2023 has the potential to be a powerful profit-making year for airport retailers and brands is that people spend more time at the airports when they transfer. The share of short transfers (meaning less than two hours) has decreased from 44% in 2019 to 37% in 2023. This means travellers have more time to shop now that airport operations are running more smoothly. Besides, many of them also tend to plan a bit more time at the airport before departure to avoid bad surprises.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.