NEW ZEALAND. One of Asia Pacific’s most important airport duty-free tenders is almost set for lift-off. Auckland Airport, New Zealand’s primary international gateway, is putting the finishing touches to what is certain to be a hotly contested bid.
The incumbent is Lagardère Travel Retail-owned Aelia Duty Free, which has been running a single-retailer contract since 1 June 2023, which replaced the former dual-operator (with ARI) model. Aelia’s extended concession expires in mid-2025.
Auckland Airport Chief Commercial Officer Mark Thomson comments: “This is a great opportunity for Auckland Airport. Aelia have been an excellent partner and we’re thankful for everything they’ve done to evidence that a single operator model is a much better outcome for our travellers.
“We’re looking forward to working through this RFP process and securing the next period that brings the best duty-free proposition for customers here at Auckland Airport.”
Auckland Airport Head of Retail Lucy Thomas told The Moodie Davitt Report Founder & Chairman Martin Moodie about the hugely exciting opportunity that lies ahead and what the airport company is looking for from its successful partner.
Martin Moodie: Lucy, there is huge interest in this forthcoming tender. What is the anticipated timeline in terms of the process? Can you talk us through the projected phases through to takeover?
Lucy Thomas: Interested parties should be getting ready for our process to start late May.
We are aware of several interested parties already investigating in this opportunity. We’re heartened by the understanding of how significant the Auckland Airport duty-free contract is in our part of the world. We like to run clear and defined processes that allow for strong submissions.
An announcement of the successful party would be expected in 2025. Further details in relation to timing will be provided to interested parties as part of the formal process.
Auckland Airport has adopted both a dual and single retailer model over the years. I presume this time around you will opt for a single retailer. Can you confirm and, if so, explain the rationale?
Yes, our intent is to continue to implement a single operator model for the next licence period.
The single operator model is better for customers – more range, variety, expanded offering and a better ability to demonstrate the true value of duty free vs alternatives.
We are aware this has been a much-anticipated move and know interested parties will value this opportunity to show great retailing outcomes. We are delighted with how the current operator Aelia has embraced our first foray into single. They have really taken on the opportunity to improve the overall duty-free offer and experiences for our customers already.
What can you share in terms of how you will evaluate the offers in financial vs technical terms?
It will be a balance of financial and non-financial elements.
We are keenly interested in operators who share our vision for delivering a compelling and relevant tax- and duty-free shopping experience with a strong focus on the core duty-free categories.
This next licence period is an opportunity to develop on the promise of travel, and the strongly held view that shopping is a core and valued part of the customer experience.
Our team at Auckland Airport stays well informed. We look into the customer and traveller mindset, and know what is important to them in terms of the customer experience (non-financial elements) and will be looking for parties to deliver on what it is that customers value.
[Editor’s note: In keeping with its historical approach to tendering, Auckland Airport will undoubtedly reveal more to the respondents in its forthcoming RFP pack. In previous bids, the company has opted for an open and transparent approach in terms of the areas likely to spark bidder interest.]
Anything particular you will be looking for from would-be partners of Auckland Airport? What do bidders need to demonstrate to you?
The trans-Tasman market is such a high-performing part of the business and interested parties need to demonstrate skill and experience in delivering for this key market (or similar).
We know we have a desirable passenger mix of leisure and business and a desirable mix of flights and destinations, so we look for partners who understand how to deliver and realise the full potential of all of these elements.
Auckland has a well-established Chinese resident and visitor customer base. We are a premium destination that attracts a lot of aspirational travellers, so will be looking for parties that can capture these types of markets, as well as key emerging markets.
We’re looking for operators of scale, and operators who recognise the value and scale of Auckland in the region and are looking for a strong team with a dedicated focus on Auckland. Other key elements will be made abundantly clear for those who are part of the process.
Auckland Airport is the premier gateway to and from New Zealand. Will there be a focus on Sense of Place in the tender?
Yes, we will be looking for a Sense of Place to be included in the offer, one that is distinctively Aotearoa New Zealand and executed in a way that resonates with our customers.
Auckland Airport places significance on representing ‘the best of New Zealand and the world’; while we have a strong sense of what that can look like, we are keen to see how interested parties will interpret and deliver that.
As Auckland Airport is 76% of all traffic in and out of New Zealand and is over 94% of all international long-haul flights, the offer we co-create with the successful party will be a major contributor to how both Auckland and New Zealand is showcased to the world – and importantly that it is something New Zealanders can be proud of and are keen to engage with.
The concept of ‘Sense of Place’ has come a long way in the travel retail industry and there is a re-generation of New Zealanders being proud of local, authentic products that tell a story and have a meaningful connection.
How about ESG in general and sustainability in particular?
Auckland Airport has big ambitions around sustainability. It is at the forefront of our thinking, with dozens of initiatives, big and small, underway. We are interested in parties who share the same aspirations and parties who demonstrate initiative in this space. We are aware it is a journey for all of us in travel retail and is about working together and adapting to keep evolving and doing better in this space.
How will the digital and omnichannel aspects of the bid be structured? What are your expectations of prospective partners, for example vis a vis The Mall (Auckland Airport’s online shopping platform)?
Digital and online retailing practices are an important part of the customer offer and the successful partner will be expected to ensure these form part of an integrated retail strategy.
As you say, Auckland Airport does have a well-established online platform – themall.co.nz – and we expect partners to embrace both physical and digital platforms to strengthen customer engagement and grow sales.
The Mall amplifies important partnerships such as these to leverage off the wider Auckland Airport eco-system. We have vast customer bases with direct customer relationships, for example in transport and parking. Something we will be looking for is a partner who has a digital strategy that goes beyond ‘just online sales’.
Any thoughts on retail pricing? Auckland Airport and its partners inhabit a highly competitive world, both in terms of trans-Tasman and other airport retailers in the region and local market and online competition. How prescriptive do you plan to be on pricing?
Yes, we agree with the sentiment that the Auckland Airport proposition needs to remain competitive in this region.
We are aware from customer insights and behaviour what matters most to travellers and what their competitive reference sets are. We’re looking for partners to ensure our offer remains compelling and relevant with this in mind. Our pricing strategy will be made clear to interested parties throughout the process and can confirm that this is an important element.
Any final message to the industry?
We are aware this is a highly anticipated opportunity for the region, and we are equally thrilled to be engaging with parties who will help create a successful and compelling offer we can all be proud of. ✈
TENDER ALERTThe Moodie Davitt Report is the industry’s most popular channel for launching commercial proposals and for publishing the results. If you wish to promote an Expression of Interest, Request for Proposals or full tender process for any sector of airport or other travel-related infrastructure revenues, simply email Martin Moodie at Martin@MoodieDavittReport.com. We have a variety of options that will ensure you reach the widest, most high-quality concessionaire/retailer/operator base in the industry – globally and immediately. The Moodie Davitt Report is the only international business media to cover all airport or other travel-related consumer services, revenue-generating and otherwise. Our reporting includes duty free and other retail, food & beverage, property, passenger lounges, art and culture, hotels, car parking, medical facilities, the internet, advertising and related revenue streams. Please send relevant material, including images, to Martin Moodie at Martin@MoodieDavittReport.com for instant, quality global coverage. |
