The rise in travel & tourism has intensified the demand for apparels, cosmetics, food items and electronics retail in the travel retail market. Moreover, increase in urbanization and changes in lifestyle are expected to propel the growth of the global travel retail market during the next few years. Here, RLI assesses the current state of the markets and highlights some key projects within the sector.
The travel retail market was valued at $69.5bn in 2016, and it is projected to reach a staggering $125.1b by 2023, according to a report published by Allied Market Research, titled, Travel Retail Market by Product and Channel: Global Opportunity Analysis and Industry Forecast, 2017-2023. Asia-Pacific is now the largest travel retail market in the world, and is growing at the fastest rate owing to improvements in living standards, rise in disposable income, and development of the tourism industry. Furthermore, Europe is one of the largest travel retail markets, owing to its stronger base of luxury products. The region possesses some of the biggest apparels and cosmetics brands, namely, LVMH from France and H&M from Sweden, which hold a significant share in the luxury apparels, perfumes, and cosmetics sector, thereby making it the second largest travel retail market. Wealthy tourists from the Middle East, China and Russia contribute significantly towards the growth of the European travel retail markets. Being the historical home of most of the luxury houses of Europe’s market accounts for nearly $21b of the travel retail sector.
Home to Dubai Duty Free, the biggest travel retail operator in the world, Dubai has emerged as a leading regional commercial hub with state-of-the-art infrastructure and a world-class business environment, and is the ideal base for multinationals and other companies targeting markets in Central Asia, the Middle East, Africa, the Asian Subcontinent and the Eastern Mediterranean. Thousands of Chinese businesses use Dubai as a hub for Africa. Indian traders use the emirate to access the world. Latin American ‘multilatinas’ see Dubai as a launch pad into South Asia, while of course Western multinationals use Dubai as a hub for the Middle East, By 2020, Dubai authorities expect to welcome 98.5 million passengers and its aviation industry is projected to account for 22 per cent of the emirate’s employment.
In 2018 Munich Airport once again claimed the title of ‘Europe’s Best Airport’ at the annual World Airport Awards. The victory marked Munich Airport for the sixth time claimed the ‘World’s Best Airport’ award. Brick-and-mortar retailers struggling in traditional malls of yesteryear should look no further than the sky, the tracks and the ocean for inspiration. With a concentrated flow of traffic, airports, train stations and cruise liners have an opportunity to create a memorable impact on a global audience, that they may never get online or in a traditional mall.
Istanbul New Airport took off on 29 October this year. The Turkish transport hub will initially accommodate 90 million passengers a year. But it is then supposed to blossom into the biggest airport in the world where 150 million passengers a year will be able to check in. The dimensions of its retail space are nothing to be sneezed at, either: it will boast approximately 53,000sq m. Gebruder Heinemann and Ubifree Dutyfree won the tender for the concession for the period of 25 years with the support of Interbrand. Interbrand developed a retail concept for the entire sales area of the airport, with luxury fashion boutiques, a bazaar with Turkish products, information areas, duty free shops, business areas, tasting booths, and lounges, and catering areas.
Manchester Airport has unveiled a marketing campaign to attract new retailers and F&B outlets as part of its £1bn transformation programme. The transformation programme will see Terminal Two more than double in size creating 60 new units in over 167,000sq m of retail space. With more than 27 million passengers and continues growth, the airport is looking to fill the space with a range of new Food & Beverage and retail outlets. The new terminal building is expected to be operational by 2020.
Further details have been revealed for the planned $13bn overhaul at JFK International Airport, with 28,000sq m of retail space announced across two new terminals. the project, which is expected to be completed in 2025, will add 15 million in annual passenger capacity to what is already the busiest airport in the US for international traffic. It is expected the overhaul will see the current eight disparate terminal sites become a more unified airport by demolishing old terminals and utilising vacant space. Developed by Terminal One Group, which comprises of Lufthansa, Air France, Japan Airlines and Korean Air, the new facility will boast over 21,300sq m of space for retail, dining and other concessions. On the south side, the new terminal there will have 12 international gates, more than 6,800sq m of retail space and 2,800sq mm of airline lounges and 1,400sq m of recreational space.
Vancouver International Airport is embarking on a $9.1bn upgrade to the facility in Richmond. The cost estimate, which takes inflation into consideration, will cover 75 major projects over a 20-year span. The projects include a GeoExchange system, which is a heating and cooling system, significant terminal expansions and new parking options. There will also be improved vehicle-rental facilities and a renovation that will feature a forest inside the terminal. The airport authority added that the construction will create thousands of jobs for local residents.
Jewel Changi Airport is envisaged as a world class lifestyle destination. Designed by a consortium led by Moshe Safdie, the iconic architecture comprises a lush indoor environment underneath a distinctive dome-shape facade made of glass and steel. This integrated development will comprise a shopping mall, attractions, facilities for airport operations and a hotel covering a total gross floor area of 137,000sq m. Jewel Changi Airport provides an excellent opportunity for retailers to showcase their brands to a global audience in the world’s fastest-growing region. Opening in 2019 from developers Changi Airport Group and CapitaLand, it will provide visitors with an exciting array of about 280 retail and dining brands including new-to-Singapore occupy another 22,000sq m and centrepiece attractions included the Forest Valley, a five-story garden and the Rain Vortex, expected to the the world’s tallest indoor waterfall standing at 40m.
Due for completion by March 2020 ahead of the Tokyo 2020 Summer Olympic Games, a $933M expansion project includes plans to build two more flight gates at Haneda Airport and create a separate TIAT Annex. In this new annex, TIAT is planning to build a 1,400sq m duty free zone , though final decisions on its format are still to be decided. As Japanese businessmen are ANA’s biggest spenders, the airport will see the introduction of new retail tenancies in the precinct. The improvements will see the introduction of 10 new retail tenancies to deliver a revitalised mix of lifestyle brands for visitors. Areas of the terminal will be expanded and redesigned to create dwell areas with upgrades to key bathroom amenities across T2 while new mezzanine level will offer additional commercial floor space. The next stage of works is due for completion at the end of 2018.
Back in March this year Muscat Duty Free opened its new shopping complex at Muscat International Airport. Departing passengers can enjoy a premium shopping experience including a range of duty free product categories such as liquor, fragrances, skincare and cosmetics, technology and confectionery. The new shopping facilities have increased in area by 300 per cent to 6,200sq m. MDF now boasts an array of luxury brands including; Jo Malone, Kiehls, Michael Kors, Hugo Boss, Tumi and Porsche Design.
Earlier this year RPW Design, one of the world’s leading hospitality interior design practices unveiled leading the completed refurbishment of two P&O cruise ships, Arcadia & Oceana, RPW Design brought a vibrant, creative vision for the refit of Oceana to delight loyal guests, while also inspiring a new generation of cruise enthusiasts. As Oceana will be visiting new destinations in the Mediterranean and Arabian Gulf, particular attention was paid to enhance the outdoor decks. In contrast to Oceana, Arcadia is an adults-only cruise ship. With a different type of clientele in mind, RPW Design’s objective was to enhance the existing luxurious qualities whilst highlighting the sense of travel and adventure. RPW Design carefully considered the refurbishments across the ship to emphasise Arcadia’s unique and traditional elegance.
MSC Cruises, which is set to triple its business in terms of cruise ship capacity by 2026, has underlined the emphasis cruise retail needs to place on experience. MSC, which hols the unique position of landlord and retail operator, is set to introduce 12 new vessels by 2026, increasing onboard capacity to 5.2 million guests, In 2019, MSC will open 26 new onboard boutiques: 11 on Bellissima, 11 on Grandiose and four on its private Ocean Cay Island.
Salesforce Transit Center, formerly known as Transbay Transit Center, is a multimodal transportation centre located in San Francisco in the US. Ground breaking for the project took place in December 2008 and it was opened to the public in August this year. Salesforce Transit Center is part of the Transbay Redevelopment Project, which aims to regenerate a 40-arce site surrounding the centre, a 1,100ft-tall tower, 2,600 residential houses, three million square feet of commercial and office spaces, and 100,000sq ft of retail spaces. Customers at one of the country’s busiest railway stations will soon be able to enjoy a greater choice of dining and on-the-go shopping brands – with a range of exciting restaurants and stores to open at London Bridge Station, part of the Thameslink Programme, includes a range of improvements including a huge new concourse, modern facilities, two new entrances on Tooley Street, and 15 fully accessible platforms. It will also see 92,000sq ft of new retail space and more than 70 retail units – the most ever in a Network Retail station.
The Gare du Nord station in Paris, France, will triple in size by 2024, in time for the 2024 Olympics to be held in the city. The architect Denis Valode will lead this huge transformation, an operation similar in size to the one conducted by the architect Jacques Ignace Hittoriff in 1864, The new departure terminal reinterprets the famous 19th century Haussmanian concept of the ‘passage parisien’, a gallery 18m tall by 300m wide offering a vast array of railway, intermodal and commercial services. In total, the service space for shops and restaurants will be largely expanded, going from 10,000sq ft to 50,000 sq ft.