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“Spends are [holding up] marginally better than the rate of passenger decline“ |
Baker Salleh Chief Executive Officer Sky Connection |
HONG KONG. Sky Connection is pushing through a programme of investment in its key liquor & tobacco stores at Hong Kong International Airport (HKIA), even as the economic crisis hits hard.
The concessionaire has begun to modernise and refurbish each of its key locations in Departures, a move that will improve the visibility of brands and allow a better flow of passengers. Plus the company is planning to open new Arrivals stores at HKIA in Q4 2009.
CEO Baker Salleh told The Moodie Report: “The trading environment today is not promising amid the financial crisis. HKIA has experienced a -7% passenger decline in Q1 versus the corresponding period in 2008, and spends are [holding up] marginally better than the rate of passenger decline.”
Salleh noted the passengers were beginning to trade down in certain categories. “The pattern of trading down to basics is evident,” he said. “Super-premium items, such as Extra, XO, aged whiskies & Champagne, have all been hit hard by the financial crisis. Cognac has [not been as hard hit] as Scotch. This can be attributed to a shift in the market mix towards Mainland Chinese.”
The company also highlighted its concern over the potential impact of swine flu on travel patterns. “The big challenge is how to minimise losses amid the crisis [around the] H1N1 flu,” Salleh added.
Note: Sky Connection will feature in a special Category Insight supplement to The Moodie Report Digital Print Edition for May, out next week.
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