Travel Retail Market Overview:
Travel Retail Market Size is expected to reach USD 202.95 Billion by 2030, from the value of USD 95 Billion in 2021, and register a CAGR of 8.8% during the forecast period (2022-2030).
Thriving travel and tourism industries have created immense opportunities for travel retail business. Surging disposable incomes alongside rise in globalization have resulted into rampant growth for air travel internationally and domestically leading to high footfalls at airports. Creating excellent opportunity for businesses to showcase their products in order to capitalize on concurrent opportunity. For instance according to an article published by TRbusiness. Nestlé is launching its coffee portfolio into travel retail outlets with Singapore Dubai, Madrid, Panama, Doha and Barcelona among the eminent airport locations now selling coffee products to travelers with more such ventures in pipeline.
Market Dynamics:
Travel retail engages in catering shopper’s demands while they are on transit. It comprises of retail outlets dealing in sales of cosmetic, fragrances, and alcohol, fashion accessories, food products And others. With continuous rise in international traffic and purchasing power travel retail business is well positioned to observe exponential growth in years to come. At the same time Governments push for promoting international trade has resulted into augmentation of duty-free shops causing expansion of existing high profit and revenues prospects for businesses.
Drivers:
Surge in international travel owing to the rise in tourism is the main driver, large number of footfall in airports pose as a great opportunity for business to showcase and sale there products . Furthermore, with globalization now international travel has become a significant part of corporate ecosystem. Additionally with introduction of duty-free shops good’s appeal from airports have further increased due to no tax liability. Making them more affordable resulting into augmented demand. Surging purchasing power of millennials is also an attributing factor.
Restraint:
Generally travel retail businesses indulge themselves into the sale of high-end luxury goods which have high profit margins. This restricts people with low disposable incomes to afford them. Furthermore, the market for luxury goods is niche and only caters to a small portion of population. Another major restraint is unawareness among travelers about this segment and different promotional offers it presents.
COVID-19 Impact:
Travel retail industry has been majorly impacted during the COVID-19 pandemic outbreak. To minimize the spread of corona virus governments all over the world had implemented strict travel bans by all means of public transportation. Especially international travel this severely contracted the footfalls in airports resulting into temporary shutdown of travel retail businesses. But the situation has stabilized in 2022, the market experienced a V-shaped recovery and is projected to grow in a similar manner due to the upliftment of restrictions and reopening of the economy as whole.
Travel Retail Report Coverage:
| Report Attributes | Report Details |
| Study Timeline | 2016-2030 |
| Market Size in 2030 (USD Billion) | 202.95 Billion |
| CAGR (2022-2030) | 8.8% |
| By Type | Perfume & Cosmetics, Electronics, Wine & Spirits, Food, Confectionery & Catering, Tobacco, Luxury Goods, and Others |
| By Sales Channel | Airports, Cruise liners, Railway Stations, Border, Down-Town & Hotel Shop |
| By Geography | North America, Europe, Asia Pacific, Latin America, Middle East and Africa. |
| Key Players | KING POWER International (Hong Kong), Aer Rianta International (Ireland), DFS Group Ltd. (Hong Kong), Dubai Duty Free (UAE), China Duty Free Group Co., Ltd. (China), Gebr. Heinemann SE & Co. KG (Germany), Duty Free Americas, Inc. (U.S.), HOTEL SHILLA CO., LTD. (South Korea), Flamingo (India), J.R. GROUP (India), Qatar Duty Free (Qatar), 3Sixty Duty Free (U.S.), Dufry (Switzerland), Lagardere Group (France). |
Market Segmentation:
By Type
The type segment is bifurcated into Perfume & Cosmetics, Electronics, Wine & Spirits, Food, Confectionery & Catering, Tobacco, Luxury Goods, and Others. In this segment the largest market share is with cosmetics and fashion. Reason being availability of products from international primer brands which is generally difficult to find in one’s native country. Cosmetics segment have numerous players offering array of niche products giving consumers better options choose from. Wine & spirits segment is also anticipated to observe growth as the demand for fine wines is souring especially from affluent pack of travelers which holds a major share in air travel. Food product segment also have a major share in travel retail business owing to demand of fast and hassle free food options by travelers. Additionally a surging demand for exotic foods could also be observed for the purpose of gifting.
By Sales Channel
The sales channel segment is categorized into Airports, Cruise liners, Railway Stations, Border, Down-Town & Hotel Shops. Among all the sales channels the airport retailers have largest market share owing to rising air travel and being choice of primer brands. Railway retail segment is also anticipated to observe growth as the number of commuters have increased exponentially. Furthermore, with recent developments in railway infrastructures by the governments have also augmented the growth of railway segment as travel retail business rushed to capitalize this lucrative opportunity.
The scenario with cruise liners is different as compared to the hotel retail this segment is growing at accelerated pace thanks to the surging numbers of businesses offering cruising activities at lower prices. With augmented incomes, cruise vacations have become very popular especially in North American and European region. Furthermore, with rise in maritime activities the number of sailors and workers involved into water shipping industry have increased this had resulted into surged demand for seaports retailers.
By Region
The regional segment includes Asia Pacific, Europe, North America, the Middle East, and Africa, Latin America. Asia pacific region has a major marketshare in this market in the year 2021 Asia pacific market was valued at USD 26 billion. This is due to rising per capita income in combination with enhanced standard of living. Furthermore, the partnership of international brands with airports in this region in order to increase their reach and customer base is also resulting into expansion of Travel Retail Market in this region.
European market is also set to grow as it attracts large number to tourists generally threw air route. The reason being presence of large number of tourist attractions in form of historical monuments and hotels with sites holding religious importance like Vatican City which is visited by millions of travels each year.
North America Is also seeing augmented growth in travel retail business owing to rising spendings by general public on tour and travel especially in USA and Canada. Augmented spending on travel is the main factor behind this markets revenue growth.
Middle east & African retail are mainly supported by the spendings by tourist coming to visit destinations like Dubai and Abu Dhabi. Recently Dubai had successfully marketed itself as one of the major tourist destination and is attracting large number of visitors especially threw air route. Additionally Middle Eastern airports are among most developed and visited airports in the world for international travel.
Latin American markets especially countries like brazil are observing growth due to rise in purchasing power as well as living standards brazil has emerged as a major tourist destination thanks to its beaches and rainforests.
Travel Retail Market Competitive Landscape:
The competitive landscape of the industry comprises the detailed profiling of major players functioning in the market and have been analyzed specifically in the report to emphasize over numerous lucrative opportunities for market growth. Further, the analysis of Research and Development (R&D) expenditures, adoption of multiple business strategies, and growing innovations in the travel retail industry. The key players operating in the market include-
- KING POWER International. (Hong Kong)
- Aer Rianta International (Ireland)
- DFS Group Ltd. (Hong Kong)
- Dubai Duty Free. (UAE)
- China Duty Free Group Co.,Ltd. (China)
- Heinemann SE & Co. KG (Germany)
- Duty Free Americas, Inc. (U.S.)
- HOTEL SHILLA CO., LTD. (South Korea)
- (India)
- R. GROUP (India)
- Qatar Duty Free (Qatar)
- 3Sixty Duty Free (U.S.)
- Dufry (Switzerland)
- Lagardere Group (France)
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