INTERNATIONAL. DFS Group has announced big cuts to its workforces in Hawaii and Singapore, driven principally by an Asian tourism slump in Hawaii and the impending exit from the Changi Airport liquor & tobacco concession.
The DFS business has also been terribly affected in Hong Kong, traditionally a highly significant share of the company’s profitability. As reported in our 17 September eZine, DFS’s business there was down by well over -50% in August due to the impact of the Hong Kong protests on tourism.
The company confirmed to The Moodie Davitt Report that it is laying off 165 employees (of a workforce of 660) across its Hawaiian island locations – led by the T Galleria by DFS in Waikiki and Daniel K. Inouye International Airport in Honolulu.
In Singapore, around 60 jobs have been lost at the T Galleria by DFS, The Moodie Davitt Report understands, all with immediate effect. Staff were notified yesterday. Additionally, warehouse, finance, adminstration and IT have been affected. Redundancy payments have been capped as part of the cuts, an issue that has caused considerable anxiety among those being laid off.
The reductions come on top of those at Changi, where, following the retailer’s shock decision not to bid on the liquor & tobacco contract which it has held since 1980, affected staff had already been advised they would be leaving. DFS said it is working with those staff on future employment opportunities.
Commenting on the cuts, DFS told The Moodie Davitt Report, “Following on from our decision to withdraw from the liquor and tobacco concession operations at Changi Airport in 2020, DFS has made the decision to rebalance its workforce in Singapore. Our focus remains on serving our travelling customers there, while investing in the wealth of opportunity that Singapore offers to create a regional hub for technology and innovation.
“DFS has also reduced its workforce in Hawaii, due to market forces outside of DFS’ control. International travel to Hawaii from Asia has been in a downward trend for many months and there is no foreseeable indication this will be reversed in the near term.
“We sincerely thank all affected employees for their service to DFS. Our priority now is to support them during this period of change.”
In Hawaii, Japanese visitor arrivals – the traditional mainstay of the DFS business, though this has been bolstered by increased Chinese custom in recent years – fell by -2.3% year-on-year in August and by -1.0% for the first eight months of 2019 to 1,033,687. But total expenditure by the Japanese was down -4.4% for the eight months (see chart).
Critically, Chinese visitor arrivals slumped in August (-26.3% to 7,855) and through the first eight months (-27.1% to 75,336). And while Korean visitor arrivals rose in August (+5.9% to 20,479), they declined sharply for the period ended August (-11.7% to 141,468).
