The travel retail business has always been prone to being knocked off course by external factors. In my two decades-plus of reporting on this niche retail sector, everything from wars, to volcanic ash clouds, pandemics and security restrictions have impacted passenger traffic levels at one time or another.
It turns out that only a small percentage of air travel is essential. People are only too willing to cancel or postpone their flight if trouble (and anaconda-length queues) look likely. If you decide to brave the chaos and head for the airport, duty free shopping is probably the last thing on your mind.
Unexpected government regulatory changes can also often prove a destabilising factor. Look no further than the Thai government’s abrupt decision to axe arrivals duty free shopping last month in a bid to lift tourist spending inside the country.
The Asia Pacific Travel Retail Association (APTRA) swiftly responded by calling the move a “disappointing blow for the travel retail industry”.
APTRA argues that travel retail is not in direct competition with domestic markets because only travellers can access it.
The association concludes that a business worth $82m in 2023, according to official data from Thai Customs, has been sacrificed needlessly.
“Retail revenue is a vital source of non-aeronautical income for airports and is a significant contributor to national infrastructure and employment,” APTR argued in a statement issued on the subject.
More generally, this summer has seen an unprecedented level of disruption. In July, a seemingly innocuous software update from Microsoft descended into a global IT catastrophe with far-reaching consequences. The ripple effects were felt across many industries, but perhaps none as acutely as in the aviation sector.
Airlines worldwide found themselves in the unenviable position of grappling with widespread system failures, leading to a chaotic meltdown of flight operations. From ticket booking to baggage handling, every aspect of air travel was thrown into disarray. Countless flights were grounded, delayed, or cancelled, leaving thousands of passengers stranded and frustrated. The financial impact on the airport retail sector is likely to have been immense.
International mix
At least the worst of the crisis was over by the time last month’s Paris Olympic Games got underway. Along with the Paralympic Games, the Olympics was predicted to attract 15.3m people to the French capital, many of them arriving at and leaving from Paris CDG airport, the country’s biggest international gateway.
The high footfall and affluent international customer mix proved irresistible to some of the country’s biggest drinks brands. For instance, Rémy Cointreau Global Travel Retail opened a month-long pop-up experience at Paris CDG to celebrate the 300th anniversary of Rémy Martin cognac. The centrepiece of the event was the launch of the Rémy Martin 300th Anniversary Limited Edition XO, priced at $230. Presented in a gold-adorned decanter, this exclusive cognac was the third in a series marking the brand’s tricentennial.
Virtual reality (VR) technology also played a prominent role in the activation. VR headset-wearing travellers were transported through time and place to learn more about the cognac house’s long history and how the brand is still made today, as told by existing cellar masters, winemakers and artisans.
Rival Cognac house Martell has also been actively targeting overseas visitors to France this year. In July, the Pernod Ricard-owned brand introduced the Martell Paris Exclusive Edition, the latest addition to the Martell Cordon Bleu City series, which has already seen editions dedicated to Singapore and Hainan.
Launching exclusively with Lagardère Travel Retail, the Martell Paris Exclusive Edition features packaging that aims to evoke the spirit and imagery of Paris, blending cityscape imagery with elements of Martell’s signature brand style. The limited edition is only available at Paris CDG and Orly airports, as well as at Martell’s brand home in Cognac.
Across the Channel, the great summer getaway was also underway at British airports last month despite all the IT disruption. At London Gatwick, for instance, Southwestern Distillery introduced a travel-exclusive expression, Tarquin’s Wonderful World Gin, in partnership with travel retailer Avolta as part of Gatwick’s Wonderful World 2024 summer marketing campaign, priced at £23.67 for a 1-litre bottle.
Master distiller and founder Tarquin Leadbetter sourced botanicals from London Gatwick’s top tropical destinations, such as pineapple from Costa Rica, pomelo from Thailand and Italian lemon zest to create the new expression, which comes in an aquamarine-coloured bottle sealed with black wax. The botanicals were distilled in flame-fi red copper pot stills at Tarquin’s distillery on the Cornish coast.
Domestic gin sales plunged 14% in the UK last year, according to data from the IWSR Drinks Market Analysis, as the gin boom continued to fizzle.
Yet the category continues to surprise and innovate in travel retail, growing in non-traditional gin markets and, in the case of Tarquin’s Gin, creating a summery exclusive expression that clearly appeals to departing British holidaymakers.
Gin’s performance in travel retail continues to surprise.
