Tourism and related retail markets have begun to recover with the gradual unblocking of various countries. Experts predict that the size of the travel retail market will grow to US$96.11 billion by 2029.
New York, NY (Merxwire) - Since the end of 2019, governments have implemented blockades and travel restrictions, reducing the number of international passengers, and the global market in 2020 has dropped by 42.50% compared to 2019. According to data released by the International Air Transport Association (IATA), global passenger traffic has fallen below an annual growth rate of 5.5% from 2009 to 2019.
However, as countries gradually unblocked, tourism and related retail markets began to recover, and duty-free shops also created new business opportunities. According to an analysis report by Fortune Business Insights, the global travel retail market size has reached US$51.28 billion in 2021. The global travel retail market is projected to grow from US$55.74 billion in 2022 to US$96.11 billion by 2029, CAGR of 8.1% during the forecast period.
According to the United Nations World Tourism Organization (UNWTO), global tourist destinations received about 117 million international tourists from January to March 2022, an increase of about 76 million from the first quarter of 2021, and the number of tourists who traveled in March As many as 47 million passengers. Shows that the pace of recovery in the international market is accelerating, and these tourist populations will drive the number and sales of duty-free shops.
The report by Fortune Business Insights shows that retailers are decorating food stations, bookstores, bars, and meeting spaces to keep their stores attractive. In addition, they also maintain high-quality merchandise displays to entice travelers to purchase products. Take Canadian travel accessories maker Bentley Leathers Inc as an example. They have launched a concept store for airports and other travel platforms, selling various travel items such as bags and luggage, and are looking forward to opening stores in more airports.
What are travelers buying? Cosmetics and fragrances continue to be the mainstays of sales in airport stores, with beverages, confectionery, fine food, tobacco products, fashion, and accessories also seeing high sales. As fashion products are particularly popular among celebrities and athletes, fashion and accessories sales are likely to grow significantly over the forecast period. Others, like candy, fine food, watches, jewelry, fine arts, electronics, and gifts, are also favored by consumers.
The growth in the number of tourists will help to increase the number of duty-free shops in the airport! Since most are high-quality or branded items, retailers can sell items at higher prices. Some companies aggressively launch advertising and promotions to encourage consumers to buy duty-free products and to please high-income consumers with high-quality goods or privately labeled products and services. It is worth mentioning that although high-priced items can increase store revenue, they may also limit the spending power of low- and middle-income groups.