Global Travel Retail Market Reaching a New Pinnacle: Projected to grow at the CAGR of 14.2 % by 2027
Published | 24 September 2021
As the number of international travelers continues to grow, they will be one of the key factors driving global travel retail market. Moreover, the rising middle-class population and affordable travel choices in developing countries are anticipated to boost market growth. Advances in technology, economic conditions, and the burgeoning retail chains that offer elegant and high-end brands are among the other factors expected to spur growth in the retail travel market over the coming years.
A study, recently conducted by the strategic consulting and market research firm BlueWeave Consulting revealed that travel retail market was worth USD 54.3 Billion in the year 2020. According to the study, the market is estimated to grow at the CAGR of 14.2 %, earning revenue of around USD 136.8 Billion by the end of 2027. The growing number of international travelers is driving global travel retail market. Additionally, the growing middle-class population and the variety of affordable travel options in developing countries are anticipated to fuel market growth. Also, technological advances and the emergence of high-end retail chains will help drive retail travel growth in the next few years.
The Booming Travel and Tourism Industry Favoring the Growth of the Global Travel Retail Market
Global travel and tourism have seen continuous growth, contributing to the development of the travel retail market. The rise in domestic and international air traffic has played a crucial role in the growth of the air travel market. Increased infrastructural quality and retail options are two additional factors that influence market growth. Another significant factor driving the travel retail market is the growing number of international travelers. Additionally, an increasing middle-class population in developing countries and reasonable travel choices are expected to boost the market growth.
Growing Popularity of Duty-free and Travel Retail Sales Driving the Market Forward
Duty-free and travel retail are retail channels that cater to international travelers. It provides many marketing opportunities as well as an essential source of income to countless SMEs. Duty-free and travel retail provide temporary spaces, giving end-users additional time after security checks and allowing them to participate in the ambiance and experience of shopping for international products. Companies are increasingly focusing on digitalizing and retailing their processes to increase profits, thereby propelling market growth.
Lack of Customer Interest Hampering Market Growth
The major challenge facing the global travel retail market is the low customer interest in shopping at airports due to the few promotional campaigns at these stores and the exorbitant price of the products. Several companies are merging with stores offering duty-free services to launch their exclusive and limited products, influencing the market growth. Furthermore, because there are fewer varieties in these stores, people are generally hesitant to shop there because only exclusive items are available.
Impact of COVID-19 in the industry
Due to nationwide lockdowns imposed by different countries, the travel retail market has been negatively affected by the pandemic. Due to the pandemic, all the travel industry got involved with the stop of national and international flights. As a result, travel retail sales have been disrupted, and consumers have turned to internet sales channels to purchase products. People are afraid of contracting COVID-19, which has reduced their domestic and foreign travel and impacted the retail channel's customers. The government's travel restrictions and policies have had a severe impact on the travel and tourism sector.
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Airports occupy the largest share of Global Travel Retail Market
Based on channels, the global travel retail market is divided into Down Town & Hotel Shops, Airports. Out of these, the airport's segment dominates the market share. As a result of low airfares and higher living standards, the number of air passengers is increasing, which is expected to contribute to segment growth. In addition, different airports are making an effort to raise revenue from non-aeronautical resources, which has increased the retail sector's development in this segment. During the forecast period, downtime & hotel shops are expected to show the second-highest CAGR.
Asia Pacific region is expected to witness significant growth in the market during the forecast period
The global travel retail market is segmented into North America, Latin America, Europe, Asia Pacific, Middle East, and Africa based on the regions. The region, which occupies more than one-third of the total market share, is the Asia-Pacific. This region is expected to rise at a significant rate during the coming years. The introduction of LCC Carriers and the increasing number of new air routes are among the main factors responsible for the growth of the Asia-Pacific travel retail market. Additionally, the increasing purchasing power and rise in consumption across developing countries like China and India may positively influenced the market in this region.
Key players in the global travel retail market are DFS Group, Dufry, LS travel retail, Lotte Duty Free, King Power International Group, The Shilla Duty Free, Gebr, Heinemann, China Duty Free Group (CDFG), Aer Rianta International (ARI), The Nuance Group, and other manufacturers. Developing creative marketing campaigns and offering unique price discounts may help companies survive the highly competitive market of duty-free and travel retail products.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the global travel retail market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the global travel retail market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyzes the growth drivers, challenges, and competitive dynamics of the market.
BlueWeave Consulting provides comprehensive Market Intelligence (MI) Solutions to businesses regarding various products and services online & offline. We offer all-inclusive market research reports by analyzing both qualitative and quantitative data to boost up the performance of your business solution. BWC has built its reputation from the scratches by delivering quality inputs and nourishing long-lasting relationships with its clients. We are one of the promising digital MI solutions companies providing agile assistance to make your business endeavors successful.
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