Airport retail sales taking off
Airports worldwide are gearing up to exploit more retail business opportunities to enhance revenue from a source that was once regarded as only a sideline.
Gittens: Not all airport prices high
Angela Gittens, director-general of the Airports Council International (ACI), said retailing had become a growing revenue stream for airports, with its proportion of their total revenue rising.
"What is happening is airports, which used to look at retail as a sideline rather than a direct source of revenue, are starting to focus more on retail offerings for a revenue boost and increased customer services," she said in Bangkok yesterday.
Airports are relying more and more on non-aeronautical revenue to help fund their capital investment, as airline fees no longer cover the cost even of basic services to carriers, Ms Gittens pointed out.
Non-aeronautical revenue represented 46.5% of the US$90.7 billion in combined revenue airports earned in 2009. It comes from areas such as retail concessions, car parking, rental car concessions, property rents, advertising, and food and beverages.
Retailing, including duty-free goods, is the largest contributor at 11% in 2009, the latest year for which figures have been compiled by Montreal-based ACI, which groups 575 airports.
Airports in Asia-Pacific and North America have the highest receipts to total revenue from non-aeronautical sources, at 51% each in 2009.
Asia-Pacific airports had combined revenue of $21.2 billion that year - $10.8 billion from non-aeronautical sources and $10.4 billion from aeronautical sources.
Airport retailing is also driven by the fact that goods at airports are becoming more comparable with those at outlets elsewhere, said Ms Gittens. More and more brands, especially in the top tier, are becoming available now, and new pricing and location philosophies have been adopted.
"It's true that airport prices are more expensive in certain areas, but not in most parts. They are either comparable or occasionally a few percent higher."
New traveller groups, particularly the Chinese, have become a major new force in global duty-free shopping, said Martin Moodie, founder of The Moodie Report, a UK-based information provider for airport commercial revenue.
"When you factor in Indian and Russian travellers, who have very high disposable income and a mindset for buying duty-free goods, the future of the duty-free industry is extremely bright," he said.
Both Ms Gittens and Mr Moodie are among the speakers at the two-day Trinity Forum, an annual event dedicated to airport commercial revenue today and tomorrow. It has attracted 270 international delegates.
Credit: Bangkok Post (www.bangkokpost.com)
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