Industry pressures outlined as TFWA Asia Pacific begins in Singapore with Gate One2One conference – 11/05/09

Gate One2One sets TFWA Asia Pacific under way

SINGAPORE. The annual TFWA Asia Pacific event is under way, following the traditional golf tournament and Opening Cocktail on Sunday, and the Gate One2One conference today.

TFWA said it is “realistic” that overall visitor numbers will not be as high as in 2008, due to the impact of the global financial crisis.

As of 9 May the number of duty free retailers and airport executives pre-registering had fallen by -8% year-on-year to 942.

Opening today’s conference TFWA President Erik Juul-Mortensen adopted a highly realistic tone, acknowledging the three-pronged pressures currently facing the sector – financial, social (health) and regulatory – but saying there were increasing signs of improvement in the world economy and in the industry.

He spoke about the “triple whammy” faced by many suppliers in recent months – the impact of falling passenger numbers, retailer de-stocking and the adverse impact of sharp currency fluctuations.

In a nicely weighted address, Juul-Mortensen was particularly convincing on the question of regulatory threat. Here he focused on the threat to duty free tobacco sales posed by the latest proposed WHO legislation [the Chairperson’s text issued before the next round of negotiations on a protocol on illicit trade in tobacco products proposes a complete ban on sales of duty free tobacco in “˜free-trade areas’ -Ed]. Tobacco represents some 8% of the global duty free mix, equating to sales of more than US$720 million, he said.

“Tobacco is a legal product, which is a key part of our retail offer. It is sold responsibly by duty free retailers in a highly regulated environment,” he said.

A strong but measured speech by Erik Juul-Mortensen highlighted the pressures facing travel retail

“If you don’t think this affects us all, you are wrong,” he said. “This is a huge issue for us our industry. The category remains a primary reason for entering our stores for many of our customers. It is a superb footfall driver and tobacco purchasers often have greater basket size and ATV (average transaction value).

“For every dollar spent on tobacco that consumer then spends two and a half times more on products from other categories.

“So it is imperative that we work together to ensure that all references to duty free are removed from that protocol at the end of June,” he concluded to applause. [We’ll bring you the full text of Juul-Mortensen’s speech in coming days].

The President’s strong but measured opening was followed by an outstanding presentation on the state of the global economy by economist Linda Yueh.

She traced the rise of the financial crisis and the lessons that have been learned from it, before assessing the impact on Asia Pacific and the travel and tourism sectors. A full report and link to her speech via will follow.

Economist Linda Yueh delivered an outstanding insight into the the global financial crisis

A nice aerial view from above the registration and conference areas


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