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Martin Moodie: “Travel retail simply needs to get better at what it invariably doesn’t do well (social & digital media/e-commerce; consumer communication) and highlight better what it does do well” |
Welcome to The Moodie Report 2016-style. Welcome to the New Year.
As I write (09.30 London time), almost all the world has passed over the 2015 threshold and into a hopefully brave new world of 2016. I note that our many travel retail friends in Hawaii still have 30 minutes to go but then that’s pretty much it.
2015 was as difficult a year as I can remember in this industry, not for any single reason as with, say, SARS, in 2003 but for the collective impact of a myriad of negative factors. Currency (especially), terrorism, war, economic woes and legislative attacks all played their part in an arguably unprecedented set of global challenges.
And yet, as always, the travel and tourism industry displayed its traditional, inherent resilience. According to the World Travel & Tourism Council, the global travel and tourism sector will have grown by +3.5% in 2015, slightly lower than the original forecast at the beginning of the year but still +1% faster than global GDP.
And looking forward, global passenger traffic will more than double over the next 20 years, according to industry experts DKMA. Its forecast indicates that 14.6 billion passengers a year will use the world’s airports by 2034, up from 6.6 billion in 2015. More than half of these 8 billion additional passengers are expected in Asia Pacific, which highlights the dramatic shift from west to east that the industry will experience over the next 20 years.
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2015: A Journey’s End and why auld acquaintances will never be forgot |
| This Blog is my tribute to all those whom we have lost or who are battling disease and illness as we step forward into the bright, gleaming, hopeful lights of the New Year and, in the immortal words of F.Scott Fitzgerald, “˜Beat on, boats against the current, borne back ceaselessly into the past.’ |
The fastest-growing markets over the course of the forecast period will be the Middle East (+5.4%), Asia / Pacific (+5.3%) and Latin America / Caribbean (+4.9%). Collectively, emerging markets will account for nearly 70% of future traffic growth.
Passenger statistics are a key indicator but it is what happens with those passengers when they enter the airport that ultimate matters to our industry. Faced by the “˜triple A’ threat (Alibaba, Amazon and Apple), travel retail simply needs to get better at what it invariably doesn’t do well (social & digital media/e-commerce; consumer communication) and highlight better what it does do well (exclusive and first-to-market products; quality shops; great gift opportunities; convenience; Corporate Social Responsibility; fund airport development).
Like many in the industry I watched astounded in recent weeks as a terrible fiasco played itself out in South Korea. Ignorant (and I use the term in the purest sense as defined by the Oxford English Dictionary – “˜Lacking knowledge or awareness’) lawmakers effectively destroyed two highly reputable, even acclaimed businesses (Lotte World Tower Duty Free and WalkerHill Duty Free) through the introduction of a frankly laughable five-year open bidding system for downtown duty free licences. I say laughable but in fact it was a form of tragic comedy, a bureaucratic equivalent of Waiting for Godot or The Merchant of Venice.
The bureaucrats somehow managed to turn the world’s biggest duty free market into a legislative laughing stock, a factor belatedly (though welcomely) acknowledged by Korean President Park Geun-hye earlier this week when she said: “Even though government had warned that it [the system change] would undermine the sustainability of the duty free business and bring a huge unemployment problem when changing operators, the revised customs law has been passed rough and ready.”
WalkerHill Duty Free, Seoul: After 26 years of excellence, the store is set to be shut down or converted to a duty paid operation as a result of the new licence system |
(Above and below) Lotte World Mall’s duty free licence was key to attracting Chinese tourists to the spectacular new Lotte World Tower. Now that licence has been passed to industry newcomer, the formidably powerful Doosan Group. |
But this near farce takes me back to my original point. The Korean travel retail industry had simply not done enough to proclaim its own virtues – it is a huge employer; a major channel for Korean goods; a tremendous platform for Korean modern and traditional culture; the key driver of Chinese tourism; and a significant contributor to many diverse charities and other social causes. Yet it allowed itself to be painted as greedy and avaricious by ignorant (there’s that word again) media and politicians.
The same thing happened in the UK with the airport VAT ‘rip-off’ media furore earlier in the year. This culminated in the Chancellor’s 31 December announcement of a review into airport sales to ensure that VAT savings are being properly passed on.
As we have pointed out time and again, much of the consumer media coverage then and now was and is inaccurate. But the industry, for a combination of reasons, largely sat back and accepted the flak. That’s why we think the government review is actually a good opportunity to set the facts straight and bravo to the UK Travel Retail Forum for saying exactly that.
The Independent claimed, incorrectly, that “the majority of” airport retailers were using boarding pass scans to reclaim VAT |
Finally in this first of what will be no doubt many columns in 2016, a word from and about The Moodie Report.
Back in September 2002 when we launched, we were a ‘disrupter’ (a term not in vogue then) to the traditional media model. No other industry publishing house believed in digital media, certainly none was prepared to invest in it. Our free subscription model (‘no passwords, no padlocks’, as we used to say back then) was the subject of much derision by my former company. But we changed the game and now it’s almost bizarre to think that travel retail information was once dependent on the postman for its delivery.
We launched the sector’s first serious website; its first e-Newsletter; its first (and still its only) Blog, Podcast and e-Zine – all considerable success stories. Importantly, in 2015 (remember back then?) we took the company back into its original hands after nearly four, let’s call them eventful, years working with Switzerland-Texas businessman John Harlan Wampler and his daughter Jaclyn. Under the ‘new’ ownership (now shared between me and Dermot Davitt), the company has been revitalised and has reaffirmed its original agenda of innovation allied to quality content as well as giving back to the industry and to society.
The formula seems to be working – despite the most difficult publishing climate I can remember in our 14 years, we turned in a stellar performance commercially and certainly our best showing creatively.
Watch this space for a great leap forward from The Moodie Report |
But that’s not enough. Like the industry itself, we must get better. We must constantly reinvent ourselves. We must relentlessly raise the bar. And that is what we are going to do.
Dermot and I have introduced both an internal and external mantra and development programme for 2016 called quite simply “˜Excellent to Extraordinary’. Being excellent (which we with humility think we are) is not good enough. We must aim to be extraordinary. After all, if you don’t want, you won’t get. You will see a very visible manifestation of that ambition in coming weeks and in many other ways across what we hope will be a tremendous year not only for The Moodie Report but for the industry it serves – and is proud to be part of.
On that note, I close with great pleasure in wishing all our readers a happy but most of all healthy New Year.
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Martin Moodie (left) and Dermot Davitt: Looking forward to lifting The Moodie Report to a new, ‘Excellent to Extraordinary’ level in 2016 | |
