EUROPE. A line-up of prominent players in the Central and Eastern European travel retail industry gathered in Budapest, Hungary on 13 October to discuss emerging trends and ongoing sector struggles at the Travel Retail Forum 2022 hosted by the Central and Eastern European Travel Retail Association (CEETRA).
The event, which took place at Budapest Airport Terminal 2, opened with words from CEETRA Chairman and Lagardère Duty Free Polska CEO Andrzej Milaszewicz, who stressed the importance of networking events, expressing gratitude that the conference had been able to take place in person.
He stressed the importance of promoting regional products to boost business opportunities. However, he cautioned that with war in Ukraine still raging, the travel retail community must expect a progressively tougher trading environment. Many people in Central Europe are uncertain about their future disposable income, Milaszewicz noted.
Nonetheless, appetite for travel in the CEE region is unwavering and those able to serve and excite the traveller will excel, he said. “Attracting and motivating staff to deliver excellent service and adjusting assortment and design to get the most out of our spaces is key,” Milaszewicz noted. “Innovation can include digitalisation, but only where it makes sense. For example, when it speeds up processes, improves staff efficiency or creates real customer benefits, such as avoiding a queue. Also, product knowledge is key, and digital solutions can help staff to assist customers better.”
Event host, Budapest Airport Chief Commercial Officer Kam Jandu, took the stage next, calling for airports and their concessions partners to work together to meet evolving customer needs and create the best travel experience. Jandu said the airport had enjoyed a strong summer’s trading with average security screening times of just ten minutes driving longer dwell times in the commercial areas. This has led to a strong average spend per passenger of €8.75, not far short of the pre-crisis €9.10. He noted that passengers are much more likely to consume food and drink now, and that commercial space has to be adjusted to follow this trend.
go2030 revealed
Jandu also announced a new concessions strategy, which will focus on the best-performing spaces and give those outlets opportunities to expand and experiment.
“We are calling our new commercial strategy go2030, which will create new space for high-performing categories,” Jandu commented. “We are right-sizing the space and looking at smart solutions, such as self check-out.” Booming retail categories include perfume and cosmetics, CTN, toys and confectionery, he noted.
Next up was Anna Marchesini, Head of Business Development for Swiss market research firm m1nd-set, who discussed the evolution of traveller demands as the pandemic continues to abate. “We saw an increasing share of people who buy for themselves at the expense of gifting,” she noted of evolving consumer dynamics. “But also, a new trend emerged – gift sharing. You buy products for someone, but at the end the shopper is also the consumer.”
Marchesini described travel retail as a major opportunity for younger or lesser-known brands, as interviews conducted in the first half of 2022 revealed that 62% of passengers have purchased a new brand for the first time in a duty free store.
Pushing hard for arrivals duty free
European Travel Retail Confederation (ETRC) Secretary General Julie Lassaigne focused on the European Commission’s efforts towards adopting a VAT tourism package. Offering arrivals duty free for passengers returning to airports and railway stations from third countries may become part of the package, she stressed. “Our objective is a deepening engagement with 27 member states in the coming months. The commission should be made aware by governments that this is worth pursuing,” Lassaigne noted.
Other countries such as Türkiye, Switzerland and Norway have benefited greatly from arrivals duty free, she pointed out. Norwegian airports’ commercial income from arrivals duty free quickly exceeded that of departures since the channel was introduced. In Switzerland, arrivals duty free now accounts for 26% of total sales. In the case of Türkiye, food and confectionary is a big sales driver on arrivals. “[Arrivals] revenues will grow, which will mean more sustainable revenue for airports, and less dependency on aeronautical charges or government aid,” said Lassaigne.
Greater collaboration please
Wassim Saadé, Founder and CEO of duty free tech start-up Inflyter, urged greater collaboration between travel ecosystem entities. Inflyter, he said, is a prime example of how different stakeholders can work together to serve customers and create profitable ventures that would be impossible in isolation.
“Consumers are dictating how they want to order,” he said. “They prefer integrators, not to visit each page individually.”
Inflyter’s app allows customers to scan boarding passes, pre-order duty free and pick up from automated lockers, as well as browse available products. The next stage of development will offer Priority Pass customers the option to have their duty free purchases delivered directly to the airport lounge, another testament to joint efforts.
IATA Regional Director Eastern Europe Anca Apahidean said the association is working with airlines, airports, governments and fellow industry organisations on issues relating to technology, passenger processing and baggage operations to deliver the best customer experience. Echoing earlier calls for greater collaboration between sector stakeholders, she said, “Not one owns the customer, but we all do.”
Apahidean also shared results from the 2022 IATA Global Passenger Survey, which reveals that 57% of passengers are interested to receive information on fast-track options, followed by flight upgrades (56%), lounge access (42%) and duty free offers (21%).
Warsaw Radom Airport set to open next April
Polish Airports State Enterprise (PPL) Head of Legal and Head of Commercial, Marketing and PR Witold Janiszewski presented a preview of the new Warsaw Radom Airport due to open next year.
The terminal spans 30,000sq m and will feature an extensive line-up of shopping and dining options operated by PPL-owned Baltona. “LOT has announced it will begin operating flights to Copenhagen, Paris and Rome starting on 28 April, 2023, so that will be the official date for first flights,” he revealed.
The conference was rounded out by global retailer Gebr. Heinemann’s new Vice President Sales EMEA, Ildikó Jankovich, who outlined the company’s growth plans. Jankovich said group turnover is projected to climb from a forecasted €3.6 billion in 2022 to €4.2 billion next year. Turning travel time into valuable time for travellers, while becoming the most human-centric company in global travel retail is the family-owned firm’s mission, she said.
