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European Travel Retail Council (ETRC) - Articles and news items

Eastern and central Europe’s retail partnership

Issue 4 2012  •  1 August 2012  •  Alan Bork, Commercial Director at Budapest Airport

It makes sense to bring together the central and eastern European travel retail and duty free industry under an umbrella association. Providing the members with a forum to exchange views, build relationships, and find common ground while establishing a united voice that can tackle local and regional issues as they arise. This initiative is already attracting support from key stakeholders who recognise the value it provides in helping to further develop the industry in the region and to guide it to reach its full potential.Although the volume of the duty free and travel retail sector in the region may not be that significant compared to the rest of Europe, one should pay attention to the growth rates in the region. While Europe’s overall share of global duty free sales decreased from 50 per cent in 1998 to 35 per cent in 2010, the Eastern European share increased from 3.7 to 7.6 per cent in the same period.That duty free and travel retail industry plays an important part in the airport sector is an increasingly clear position currently being recognised by all stakeholders including ACI. For most airports, as much as 40 per cent and even up to 60 per cent in some cases of total revenues are generated from non-aviation activity, where duty free and travel retail account for the biggest part.

Travel retail can still cash-in

Issue 3 2012  •  6 June 2012  •  Frank O’Connell, President of the European Travel Retail Council (ETRC)

In 2010, the global duty-free and travel retail market recorded net sales of $39 billion1 despite the aviation sector being hit by the economic crisis. Having such a vibrant retail sector while many of the economic indicators are at half-mast should be a source of positivity.Commercial activity is, and will continue to be, one of the principle driving forces behind Europe’s airport industry in the years ahead. In 2010, non-aeronautical revenues, which accounted for 48 per cent of airports’ incomes, grew twice as fast as aeronautical revenues, as airports put greater emphasis on developing their retail activities. This enabled the airports to bring down the costs for airlines and passengers and to finance infrastructure improvements and expansion. The airport commercial sector is now such an important means of generating revenue that vibrant and attractive retail areas are considered by airport operators to be a critical element of their facility modernisation plans.Development prospects for the duty free and travel retail industry are good, both within the EU and outside its borders. In the next 20 years, I expect that our industry will track and indeed outperform the forecast increases in air traffic, with specifically, travellers from Asia and the Middle East representing a major economic potential.

 

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