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Sydney Airport Retail General Manager Andrew Gardiner: “The outlook for duty free spending at Sydney Airport is exceptional. Over the past three years, Chinese passengers at Sydney Airport recorded a strong average annual growth rate of +14%.” |
AUSTRALIA. Sydney Airport has today called for Expressions of Interest for its next duty free retail contract, commencing February 2015.
The airport’s current duty free retail contract with Nuance Australia (trading as SYD Duty Free) expires next year. It comprises six duty free outlets at Terminal 1 (the international terminal), occupying approximately 7,600sq m of retail space, plus one domestic tax paid travel retail offering at T2 (the domestic terminal).
Although final details of the contract will not be revealed until would-be bidders obtain the documents, it is understood that the tender offers a variety of options, including bids on Departures duty free, Arrivals duty free, Departures and Arrivals combined (all compliant bids) and two further options, one of them highly innovative (more details to follow in this week’s edition of The Moodie Report e-Zine).
The bid structure allows for one or more operators to trade at the airport, a factor that will further stimulate expected strong interest in the tender. Besides the incumbent Nuance, JR/Duty Free, LS travel retail and Heinemann Asia Pacific (which recently added two specialist outlets at Sydney, including a National Geographic store and the stunning A Little Something gourmet shop) are all likely candidates, while both Korean travel retail giants, Lotte Duty Free (which bid last time around) and The Shilla Duty Free may be among the mix, as could be King Power Group (Hong Kong).
DFS (which has a strong downtown presence) is another one to watch, while World Duty Free Group and Dufry are likely to at least examine the opportunity.
Last time around, in 2006, The Nuance Group retained its concession in the face of challenges from DFS Group; Aelia/Newslink; JR/Duty Free; HMSHost/Aldeasa (now World Duty Free Group); Lotte and Dufry.
Contract duration details for the new concession/s are not yet available.
“As a leading airport located in one of the world’s most vibrant cities, our retail partners are an integral component of maintaining Sydney Airport as a world-class shopping destination,” said Sydney Airport Retail General Manager Andrew Gardiner.
“We are seeking the best operator to take the duty free offering and passenger experience at Sydney Airport to another level, as well as foster the growth of the airport for the benefit of Sydney, New South Wales and Australia.
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Sydney Airport last year introduced a Mandarin version of its iPhone app in response to the needs of a growing number of Chinese travellers |
“Sydney Airport offers passengers a sophisticated mix of the best shops and brands in fashion, accessories, jewellery, souvenirs, food and wine – there are 150 shops in T1 and a further 50 in T2. We see quality of retail space as a key driver of our retail business and we plan to further invest in development of our retail space in T1 to enhance our duty free sales potential.”
In 2013, Sydney Airport experienced its busiest year ever, including 37.9 million passengers passing through its terminals – 3.4 million in December alone – with an overall international passenger total of 12.7 million, up +4.1% year-on-year. Such numbers follow major investments in and upgrades to T1 and T2 of more than A$2 billion (US$1.75 billion) over the past ten years.
Sydney Airport submitted its ambitious Draft Master Plan to the federal government in December 2013. This outlines a plan to enhance facilities and increase capacity to service a forecast 74 million passengers by 2033.
Sydney continues to be a key destination for travellers from around the world, with recent figures showing that China is now the second-largest passenger nationality to visit the New South Wales capital, representing 14% of total international visitors.
“Sydney Airport has a strong customer profile, with the Australian outbound market representing 49%,” said Gardiner. “These customers have a high propensity to purchase duty free, both outbound and inbound.
“Combined with continually growing international visitor numbers and retail demand, particularly from China and the Asia Pacific region, the outlook for duty free spending at Sydney Airport is exceptional. Over the past three years, Chinese passengers at Sydney Airport recorded a strong average annual growth rate of +14%.”
Sydney Airport said that the selected duty free partners will benefit from retail opportunities provided by the high proportion of traffic at Sydney Airport that is “long-haul; origin and destination-based (and its associated longer passenger dwell times); very high leisure mix; passenger numbers that have consistently grown year-on-year; generous retail space and attractive environment.”
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With strong Australian outbound traffic, both Departures and Arrivals duty free enjoy a solid local business. But it’s the burgeoning Chinese business that will most excite bidders. |
Gardiner added: “Drawing on these strengths, the chosen duty free operator will have the ability to provide our customers with an experience to which other airports aspire. We look forward to seeing how operators will rethink and unlock the airport’s duty free potential.”
Responses from interested parties must be submitted by 4pm on 18 February 2014. A copy of the Expressions of Interest document can be obtained by contacting Doug Benham, Head of Duty Free, Retail and Special Projects, Sydney Airport, on +61 2 9667 9631/+61 478 401 720 or by e-mail at doug.benham@syd.com.au
For more information about Sydney Airport, visit www.sydneyairport.com.au
News of Sydney Airport’s Expressions of Interest follows Friday’s news, revealed by The Moodie Report, that Auckland Airport is also going to market with its duty free concessions, currently held by DFS Group and JR/Duty Free, respectively.
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