Monday, July 15, 2024
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Travel Retail

A Market of Opportunity

The travel retail industry revolves around airport, cruise ship and train station retail and it is an industry that is growing at an unprecedented rate. Over the pages ahead we will take a look at the overall travel retail market to assess how it is changing and growing, as well as highlighting a number of examples of retail expansion within these spaces around the world.

A market research report on the Travel Retail Market by Fortune Business Insights highlights that the global travel retail market size was valued at USD 55.74bn in 2022, and this is projected grow from USD 60.72bn in2023 to USD 117.18bn by 2030, exhibiting a CAGR of 9.85 per cent during the forecast period.

The report continues by saying that a growing number of millennial and idle-income traveller groups are offering immense opportunities to grow international retailing businesses. Nowadays, retail businesses keep food stations, bookshops, bars and conference spaces decorated to maintain their shops attractive. Additionally, they maintain high-quality merchandising displays to capture travellers’ attention towards buying their products.

Travel Retail 1
Hamad International Airport
Doha, Qatar

The UN World Tourism Organisation (UNWTO) has predicted that international tourist arrivals could reach up to 95 per cent of pre-pandemic levels this year as the industry continues to rebound after a difficult few years. In terms of markets, the Middle East has enjoyed the strongest relative increase, reaching 83 per cent of pre-pandemic arrivals in 2022. This region is also set to be one of the world’s fastest-growing economies over the next decade.

According to the Lead8 Year Book, it is not only the Middle East that is experiencing this surge and a refocusing on its travel and tourism-related developments. All regions are bouncing back and now looking to stand out amongst the competition. The renewed demand for tourism is leading governments to invest in their infrastructure and transit-oriented hubs. In Asia for example, developing around transport is not only commercially sound but sustainable, making the most use of the land that is servicing the largest footfalls in their cities.

New trends and retail elements are rising up all the time in the travel sector and at the moment airport lounges are a hot topic in the industry and are experiencing huge growth. According to Matt Webb, Associate Director at Pragma, the combination of the returning business travellers and the growing demand for affordable luxury from leisure travellers has created a perfect storm for airport lounges, leading to exceptional sales figures. As a result, airport lounge operators are actively expanding and enhancing their offerings to cater to this increased demand for a premium travel experience.

Travel Retail 2
Proposed new Terminal 2, Manchester Airport
Manchester, UK

He continues by saying that the increased demand for lounges in airports can be attributed to three key factors. Firstly, the return of business passengers to airports has further fuelled the surge in lounge demand. Business travellers, recognising the importance of productivity and relaxation, are actively seeking out lounge facilities to optimise their pre-flight experience. Secondly, the escalating costs of dining at restaurants have prompted travellers to seek better value for their money. As a result, affordable lounges have become increasingly desirable, providing a comfortable and cost-effective alternative.

Lastly, Webb says that the rise in private memberships offered by banks has enticed individuals to switch to new banking institutions. These memberships often include lounge access as a perk, attracting customers who seek enhanced travel experiences.

Airport Retail
Earlier this year, Newark’s Liberty International Airport celebrated the opening of Terminal A after a four-year redevelopment. Travellers can now enjoy restaurants and retail space that reflect the local New Jersey character, like Shorepoints Market, Carlito’s Tacos, Smokehouse and KitchenStep, as well as explore inspiring public-art installations like the ‘Forest of Firsts’, which celebrates the Garden State’s pioneering accomplishments in science, literature, energy and film. Passengers will also benefit from modern airport infrastructure, such as touchless security checkpoints and boarding areas, while enjoying views of the Manhattan skyline across the Hudson River. The $2.7bn overhaul consists of 33 gates and the one million square foot space also offers state-of-the-art passenger amenities, digital technology, artwork from nearly 30 local artists, and dining and retail options provided by 60 regional, national and global brands. The retail line-up has expanded recently with the launch of a range of new post-security concepts for travellers by WH Smith North America.

Travel Retail 3
Airport City
Jeddah, Saudi Arabia

Manchester Airport has unveiled plans for 27 new eateries and retail units in its brand-new Terminal Two, as part of its £1.3bn transformation programme. The extended departure lounge will feature a food market serving a variety of world cuisines and quick eats, for those who prefer a more casual dining experience, alongside a boutique high street-style shopping area complete with a Champagne Bar and premium brands, artisan cafes and a brasserie. The shopping zone, to be known as The Avenue, will have a vibrant and airy feel. Each store front will open onto airfield views, with plenty of passenger seating for added comfort. The airport is searching for retailers selling toys, fashion, accessories and travel essentials to take up units in this area, and is seeking out partners who will showcase the best of the North in their units, through the design of their stores and the range of products on offer. The expanded retail and restaurant offering forms part of the transformation programme’s second phase, which will see the original Terminal Two building remodelled and upgraded, in sync with the recently-opened terminal extension. Work is expected to be completed by 2025.

Currently being completed in stages, with the final completion set for 2028, Istanbul Airport is on course to accommodate nearly 200 million passengers a year when finished. With such a high volume of traffic, retail on-site is an important aspect and with this in mind, ATU Duty Free in collaboration with Gebr. Heinemann has expanded its multi-brand concept Luxury Square store at Istanbul Airport and has added new fashion brands to its portfolio. ATU Duty Free – a subsidiary of TAV Airports and Unifree Duty Free/Gebr. Heinemann – has increased its brand mix with the store expansion of 440sq m, which is located in Zone 5 Departures at the hub. The store now covers an area of 1263sq m and features around 25 luxury brands, including Burberry, Kenzo, Givenchy, Loewe, Stella McCartney, Alexander McQueen, Chloé, Marc Jacobs, Off-White and Palm Angels. With the extension, the assortment is complemented by new brands such as Lanvin, Autry, MM6, Acne, On Running, Axel Argiato, Tod’s, Versace, 04651 Trip in a Bag, Vetements, Thom Browne, Casablanca and Zegna.

Travel Retail 4
Brisbane International Airport
Brisbane, Australia

In Australia, the luggage company Globite, has launched its first Queensland store at Brisbane Airport and becomes one of the newest stores to open at Brisbane Airport, as part of the $40M Domestic Terminal retail upgrade project. Meanwhile, Brisbane Airport Corporation announced the next phase of the Domestic Terminal makeover will start this year. This phase will include an evolution of food and beverage options in the southern end of the terminal, primarily serving Virgin Australia passengers. CPB Contractors, a member of the CIMIC Group has been selected by Brisbane Airport Corporation to undertake the planning phase of the International Terminal Security and Retail Upgrade project, which involves the reconfiguration and expansion of the International Terminal’s main security screening area and upgrading retail and administrative facilities.

Chapman Taylor has created the masterplan for an innovative new urban district adjacent to King Abdulaziz International Airport in the Saudi city of Jeddah. The 1.91 million square metre gross build area masterplan for Airport City introduces an innovative mixed-use community concept to the region, creating diverse tourism and business opportunities while also providing a dynamic lifestyle and family entertainment venue. A vibrant transport-orientated development creates a new hub gateway to Jeddah and beyond at the strategically important meeting point of the airport, high-speed railway station and the motorway junction between central Jeddah and the Northern Expansion Zone. The scheme will deliver a dynamic and sustainable mix of provisions around a central avenue, which links the airport’s railway station to the airport’s dedicated mosque. Included within the masterplan are shops, leisure and entertainment functions, healthcare clinics, private residences, a financial district, an artisans’ district, a green food yard and a central artists’ district.

As mentioned earlier in this article, airport lounges are popping up in airport’s all around the world and Hamad International Airport in Doha, Qatar is no exception. Qatar Airways has opened a VIP business lounge at Hamad International Airport. Called “The Garden”, it includes an airport-spa, quiet rooms, a gym, nursery, sushi station and gelato dining. The new Al Mourjan Business Lounge overlooks “The Orchard” and features retail and dining spaces along with uniquely designed relaxation spaces and areas to socialise. In addition, with the arrival of 40 new stores and a refreshed and enhanced range of dining options, the user experience for travellers checking in and touching down at Hamad International Airport has been completely revolutionised. The enhanced retail and F&B options in the North Plaza were born out of the recent 125,000sq m expansion of the airport – enabling the seamless movement of over 58 million passengers per year. It’s just one of nine improvements to the airport catalysed by the 2022 World Cup and the need for increased capacity to meet continued customer growth in Doha.

Travel Retail 5
Galataport Istanbul
Istanbul, Türkiye

Cruise Ship Retail
Meanwhile, leading cruise retailer Harding+ has revealed a stellar line-up of new retail operations partnering with some of the biggest and most anticipated new ship launches ahead, bringing data driven insights, innovation, and brand experiences to life to help make every cruise better for guests. Original spaces, cruise retail firsts, new brands at sea and an increased focus on wellness and sustainability all feature heavily in the mix as on board retail experiences increasingly challenge or exceed land-based retail where the benefit of guest dwell time becomes ever more commercially desirable. Summer 2022 saw the full launch of Norwegian Cruise Line Prima, with a new promenade style ‘borderless’ shopping experience, the largest ‘tech’ shop at sea, and a specialist Pandora jewellery lounge. Further ships in the Harding+ and NCL partnership will include NCL Viva, NCL Spirit, and NCL Gem, all of which will be live between July and November 2023. December 2022 heralded the P&O Cruises Arvia arrival, which included 900sq m of open-plan and experiential retail space, a wellness specialist retail focus, a showcasing of the latest in tech at sea and a ‘design your own’ fine jewellery bar. Harding+ retail experiences also landed on Carnival’s Luminosa in November with Mardi Gras following in January 2023 and were a part of Ambassador’s Ambition launch in spring 2023 and Marella Voyager in June 2023.

In Switzerland, MSC Cruises continues to outdo itself with an ever-growing and ever-diversified range of retail offerings on board their newest ships, with the MSC Euribia being crowned the newest and largest shopping area at sea – totalling 1,278sq m, when she launched in June. On board, guests will be treated to a brand-new Luxury Plaza, an expansive range of tech and gadgets, as well as new environmentally responsible products in line with the ship’s environmental message. Among the new and updated features of MSC Euribia’s retail space, guests will see the brand-new Luxury Plaza which is the ultimate space for new luxury retail concepts, located on Deck 6, off the promenade. Open from morning to night, guests can participate in workshops, seminars, discovery sessions, one-to-one consultations with a personal shopper, tastings, as well as demonstrations. In addition, there is a transformed and open shopping gallery, where nearly 250sq m of completely re-designed and evolved space features beauty, the widest selection of tech in the fleet, as well as food and drinks, showcasing new products and events through fully immersive experiences, using a newly created “digital zone”. This new zone includes the fleet’s widest range of Samsung products, providing numerous and varied product options from smart watches to mobile phones. The gallery brings modernity and technology together in an innovative way as never before seen in cruise retail.

A USD 1.7bn investment, Galataport Istanbul is regarded as a major destination project globally with a cruise liner port on the 1.2km coastline. Galataport Istanbul has transformed this historical city harbour into a world-class cruise liner port and touristic destination, while opening the promenade to public use for the first time in approximately two centuries. Galataport Istanbul features a total of 230 food & beverage and retail stores. Around 52,000sq m of the total leasable area is set aside for shopping and food & beverage establishments, whereas total leasable office space is 43,000sq m. All of the brands included in Galataport Istanbul, whether they enter the Turkish market for the first time or not, provide their services based on a concept centred on experience, suitable for all audiences and different tastes. The project has a broad range of store options, ranging from 20 to 2,000sq m. Galataport Istanbul has become the new gastronomy neighbourhood of the city, with 40 per cent of its leasable area reserved for food & beverage establishments, situated in an area that had been home to a variety of different cultures in the past.

Travel Retail 6
Roma Termini Station
Rome, Italy

Train Station Retail
Competing to outdo one another, China’s train stations tower over its cities like grand palaces, surrounded by large main roads, imposing viaducts and often empty plazas. But instead of pursuing monumental architecture, Beijing-based MAD Architects asks if it is possible for urban train stations to be constructed at a more comfortable, human scale; to be more than a stopover for travellers, but also an open, green public space that both inhabitants and tourists can enjoy and would want to spend time in. On a 35.4ha site in a city of 5.4 million people southwest of Shanghai, MAD Architects rebuilt Jiaxing’s historic early 20th-century train station based on archival studies, replacing an outdated, ageing, noisy, chaotic and undersized facility, whilst simultaneously constructing a new futuristic train station mainly hidden underground – with just one floor above so as not to eclipse the old station building. Known as the Train Station in the Forest, it is a one-of-a-kind transport hub.

A great example of urban regeneration within train stations is the project for the whole Roma Termini station. The refurbishment will comprise of: bringing to light the remaining of Mura Serviane in the historical Atrium; the refurbishment of windows and facades of “Galleria Gommata” and the introduction of two new holes on the floor to improve the connection with the underground floor and facilitate customer journey. The underground floor will be completely redesigned too thanks to the refitting of floor, ceilings, lighting and windows. Set to launch next year by developer Grandi Stazioni Retail, the total GLA will be 47,800sq m and the number of stores and brands will reach 170 when it opens at the end of 2023.