Reshaping the Travel Landscape
The travel retail sector is one that has rebounded tremendously in recent times and its future looks as bright as it ever has as it continues to grow exponentially. Over the coming pages, RLI will take a closer look at the overall sector and highlight a number of global projects that have launched, or are due to open across airports, train stations and cruise liners.
This year, global air passenger numbers are expected to surpass 2019 levels, this surge in travellers presents a huge opportunity for travel retail in the air and on the ground. The improving income levels and increasing expenditure on travel by the millennial population are anticipated to be key factors stimulating this growth and for luxury brands, this puts the potential of travel retail and duty-free firmly back in the spotlight.
The travel retail market size is projected to grow from $66.30bn in 2024 to $145.46bn by 2032, at a CAGR of 10.32 per cent during the forecast period, according to a market report by Fortune Business Insights.
The report continues by saying that travel retail businesses offer products in travel environments such as cruises, airports and train stations. These environments provide significant revenue generation opportunities and assist companies in enhancing their brand awareness among international travellers at minimum marketing costs.
Meanwhile at a macro level, the report explains that the rising popularity of goods in airports, cruise liners and railway stations will favour the market’s expansion over the forecast timeframe.
The travel retail market size is projected to grow from $66.30bn in 2024 to $145.46bn by 2032, at a CAGR of 10.32 per cent during the forecast period, according to a market report by Fortune Business Insights.
Airport Retail
Hybrid stores, a blend of retail and food and beverage offerings, are reshaping the landscape of airport retail worldwide. This is the viewpoint of Dennis Limmer in his article entitled ‘Is Airport Retail Evolving Into the New Shopping Mall?’
His piece goes onto say that, overall, the global airport retailing market is on a trajectory of growth, set to exceed $90bn by 2033, from a projected valuation of $29.84bn in 2023. This surge, projected with a CAGR of 11.7 per cent, underscores a shift toward omni-channel retailing to meet evolving traveller needs.
The Port Authority of New York and New Jersey, in partnership with American Airlines and Unibail-Rodamco-Westfield (URW) Airports, have announced a $125M commercial redevelopment program for Terminal 8 at John F. Kennedy International Airport (JFK). The project will feature a new Great Hall and is expected to bring more than 60 new shopping and restaurant offerings to the terminal. With an emphasis on locally owned and diverse businesses that will create economic opportunities for the community, the new program will showcase New York’s world-renowned culinary scene and establish a unique sense of place for travellers. Following the recent completion of a $400M expansion of Terminal 8, the commercial redevelopment will further enhance the customer experience at the terminal with a complete redesign and expansion of the concessions program, including new dining, retail, duty-free shopping, performance space and new digitally enabled experiences for customers. Affordable dining options consistent with the Port Authority’s street pricing policy will be included.
Elsewhere in the airport, Terminal 4 is set to welcome a new Capital One Lounge which will measure 13,000sq ft, offering the most expansive tarmac views of any Capital One Lounge yet. Located in T4’s Retail Hall, the new Lounge will serve as a tribute to New York City’s charm and provide guests with an elevated travel experience that gives travelers a taste of the diverse city without ever having to leave the airport.
Kansai International Airport (KIX) opened its new integrated commercial area to the public in December 2023. The area has been completely redesigned, with a central plaza, a gate area where passengers can enjoy themselves right up to boarding and four ‘mood’ zones that offer a range of atmospheres. These mood zones are named Peaceful, Curious, Active and Fun. They have been designed to improve customer flow and synergy effects, while offering travellers everything from luxury brands, cafes and restaurants, to walkthrough duty-free shops, bars and stores that provide a ‘sense of Japan’. This work is an important part of KIX’s large-scale Terminal 1 renovation project. The renovation project has been broken down into four phases and is scheduled for completion in spring 2025 ready for the Osaka-Kansai Expo. At a size of 26,910sq ft, the new commercial area has one of the largest walkthrough duty-free stores in Japan with a total of 27 units, broken down into 16 retail stores, nine F&B outlets, one complex and one service offering. This will rise to 172,223sq ft upon completion of Phase 4.
Last year, in a landmark moment, Changi Airport Terminal 2 fully reopened its doors after three-and-a-half years of engineering and expansion works. The reopening marks a complete restoration of four-terminal operations at the Singaporean gateway. At the heart of T2’s departure hall is a 14m-tall digital display, dubbed The Wonderfall. Set amid a vertical garden, The Wonderfall captures the essence of nature’s raw beauty in breath-taking detail. Onlookers are transported to an immersive world of wonder with a majestic waterfall cascading over megalithic boulders. The T2 expansion project has added more than 21,000sq m to the terminal building to support additional infrastructure, new systems and more retail offerings. Recently, more retail and food & beverage stores have opened in both T2’s public and transit areas, bringing a touch of magic to the visitor journey.
As part of the airport’s wider upgrade project, Swedish airport owner and operator Swedavia is making its biggest commercial investment to date, in the form of a new 118,403sq ft retail space, called Marketplace, at Stockholm-Arlanda Airport (ARN). When fully open, the airport’s commercial offering will have 40 new outlets, with a mix of Nordic and international offerings. The project came about as part of the operator’s long-term development plan to build capacity, as passenger numbers continue to grow post-pandemic. Phase one was opened to the public on 27 September 2023 and has 10 new shopping and dining concepts, including three F&B offerings that are aimed towards families, with one open 24 hours a day and a new flagship duty-free store. Phase two is scheduled for completion this year, with the final phase and the full Marketplace, opening at the beginning of 2025.
Manchester Airport is working on 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.
Meanwhile in Terminal 1 at the same airport, the brand-new Gaming Point has launched, giving video game fans the chance to play their favourite titles – or try out a virtual reality escape room – before their flights. The state-of-the-art outlet is an airport-first in the UK and it also features a Formula 1 simulator, complete with steering wheel and pedals.
Opened in November last year, Abu Dhabi International Airport Terminal A (now known as Zayed International Airport) features 35,000sq m of retail space, with 163 shops and food and beverage outlets that offers passengers a wide variety of shopping and dining options. These include Gucci, Yves Saint Laurent, Ferragamo and the world’s first Muji airport store. Dining outlets include Jones the Grocer, Taste of India, Starbucks, Camden Food Co., McDonalds and TGI Fridays. Additionally, Todd English will open its first airport restaurant providing diners with a wide selection of cuisines from around the world. There are also two health and beauty spas along with a 138-bedroom hotel plus a modern open-air lounge offering renowned Arabic hospitality. Terminal A prioritises the passenger experience, facilitating a streamlined service.
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.
Cruise Ship Retail
While airport retail is leading the way in the market, cruise ship travellers and retail shoppers is catching up fast. The global leader in luxury and experiential travel, Virtuoso, found that after drawing on more than 300 professional travel advisors who specialise in cruising, that 58 per cent believe it will emerge as the strongest tourism sector in 2024-2025, surpassing land-only experiences.
Starboard and Royal Caribbean International are celebrating the cruise line’s highly anticipated return to China with Spectrum of the Seas. The most innovative ship to sail in China is back with transformed retail offerings, featuring new brands, curated collections and immersive shopping experiences. A new addition to Spectrum is a fine jewellery and watch boutique, bringing together Kering’s sister brands, Gucci and Qeelin. Setting the stage for unparalleled luxury experiences, Spectrum boasts an array of globally renowned brands and stand-alone boutiques. Notably, the Bvlgari, Cartier and Omega boutiques will offer the latest styles complemented with experiential events that immerse guests in each brand’s sophisticated and luxury lifestyle. Inside Regalia, vacationers can indulge in Swiss timepieces from Longines, Jaeger-LeCoultre, IWC Schaffhausen and Hublot, as well as luxury fine jewellery from iconic brands including FRED, Mikimoto and Messika. The revamped Beauty Avenue is the epicentre of Beauty for All, featuring coveted international brands spanning skincare, makeup and fragrances from SK-II, La Prairie, Sisley, La Mer, Chanel, Dior, Givenchy, Jo Malone to Bvlgari, Tiffany, Hermes and more. In addition to each brand’s shop in shop collections, “must have” skincare items will be highlighted as “Beauty Heroes”, all at a great value.
Meanwhile closer to home, Harding+ have officially launched the retail experience onboard Queen Anne – the latest Cunard ship, which set sail on her maiden voyage on Friday 3 May. The retail experience onboard is one of Harding+’s most ambitious to date, including 11 different shopping areas with a multitude of displays and hundreds of products on offer, several of which are exclusive, first-at-sea, or both. One centrepiece experience is the Cabinet of Curiosities, a close collaboration between the retailer and cruise line that features an immersive, multi-sensory display in the heart of the retail space. The Cabinet tells the Cunard story though an eclectic and rare set of brands and curiosities. A combination of state-of-the-art transparent screens and stylishly illuminated cabinets weave together elements of both the Cunard heritage and future ambitions with iconic pieces from Garrard, Chanel, Theo Fabergé, Launer, By Alona and more.
Train Station Retail
The Masaryčka building in Prague is defined by circulation routes which will provide access to new civic spaces for the city. Accommodating the continued growth of the city’s corporate sector with office spaces designed to meet 21st century working patterns, the 28,000sq m Masaryčka office and retail development incorporates seven storeys within its eastern section and nine storeys at its western end.
Integrating with Czech Railways’ modernisation of the historic Masaryk Railway Station that is creating a new public square partially over the railway tracks, Masaryčka’s design will enhance accessibility to the railway platforms below and provide new pedestrian routes between Florenc and Hybernská on either side of the station. Due for completion in 2026, Czech Railways’ renovation of Masaryk Railway Station adjacent to Masaryčka retains the existing historic terminus building and includes the construction of the new public square partially over the tracks giving access to individual platforms and a direct transfer to Prague’s metro line B. Transforming the station into a fully accessible, multi-modal transport hub for the city, its modernisation programme extends the current number of tracks from seven to nine and reconstructs all platforms, overhead line equipment and power supply.
Network Rail, the owner and infrastructure manager of most of the railway network in Great Britian, has announced that retail sales reached over £800M in the past 12 months across its retail portfolio of 19 managed stations in Great Britain. Throughout the last year, Network Rail has taken proactive steps to continue changing the retail mix. Network Rail’s retail strategy has focused on developing the offering across its destination stations by introducing new brands and experiences for customers including the Arches, a new cultural venue at London Bridge, which has brought Elvis to the capital. At London Waterloo, the opening of The Victory pub has helped boost sales per square foot to £2,507 (annual average). Offering an all-encompassing selection featuring breakfast, Sunday roasts and craft beer, The Victory demonstrates how hospitality brands are increasingly investing in major transport hubs to capitalise on rebounding footfall.