Global Travel Retail Market

Global Travel Retail Market, By Channel (Down Town & Hotel Shops, Airports), By Product (Wine & Spirit, Fashion & Accessories, Perfume & Cosmetics), By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) Trend Analysis, Competitive Market Share & Forecast, 2021-2027

  • Published Date: September 2021
  • Report ID: BWC21103
  • Available Format: PDF
  • Page: 195

Report Overview

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

Global Travel Retail Market Size - Industry Trends & Forecast Report 2027


Global travel retail market was worth USD 54.3 Billion in 2020 and is further projected to reach USD 136.8 Billion by 2027, at a CAGR of 14.2% during 2021-2027 (forecast period). The growing number of international travelers will drive the 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. Technological advances and the emergence of retail chains that offer elegant and high-end brands are among the other factors expected to boost retail travel growth in the future.

Global Travel Retail Market

Source: BlueWeave Consulting

Global Travel Retail Market Overview

Travel Retail is an industry that revolves mostly around airports, cruise liners, aircraft, international railway stations, and downtown duty-free retailers. It is a retail channel that sells goods to overseas visitors. It is also a substantial source of revenue and offers numerous marketing options. One of the key elements driving the expansion of the travel retail market is the burgeoning popularity of the travel and tourism sector. The majority of these sales take place in airports as travelers have enough time to browse in airports fashioned as enticing shopping venues. Duty-free shops (or stores) generally sell goods that are exempt from local or national taxes and tariffs on the condition that they are sold to traveling customers who intend to take the items abroad.

Growth Drivers

Immense Business Opportunities

 

Travel retail is known as the global platform for business growth and innovation. It offers immense business opportunities to high-end brands as well as small and medium organizations. Small and medium enterprises (SMEs), which are considered the backbone of an economy, can benefit greatly from travel retail. SMEs can use travel retail as a solid platform for displaying their products to international tourists at minimal advertising costs. Travel retail provides retailers with fantastic opportunities to promote their products, strengthen customer loyalty, and attract new customers from foreign countries.

The Burgeoning Tourism Industry

One of the factors influencing the growth of the global travel retail market is the considerable development of the travel and tourism sector. Due to a rise in travel and tourism, apparel, cosmetics, food items, and electronic retail sales are growing in the travel retail marketplace. In addition, the increase of urbanization and lifestyle changes are critical factors probable to increase the travel retail market growth during the coming time. With the availability of cheaper flights and the ability to schedule a vacation over the internet, travel has become quite simple. Moreover, people nowadays have a better comprehension and knowledge of places, which is why they are willing to explore more countries, thereby driving the global travel retail market.

Restraints

One of the challenges confronting the global travel retail market is customers’ lack of interest in purchasing at airports. However, distribution channels are taking every possible measure to provide value to passengers, improve their travel experiences, and stimulate the economy. Despite the fact that many corporations work with duty-free retailers to offer limited or exclusive products, growth at these stores is likely to be limited due to a lack of promotion campaigns and high product pricing.

Impact of COVID-19 on the Global Travel Retail Market

The duty-free and travel retail market was hit hard in 2020 like most of other industries due to the sudden fall in tourism amid the COVID-19 pandemic and the nationwide lockdown enforced by different countries. SMEs in particular have also been severely impacted, especially since many of them are heavily dependent on airport sales.

The tourism sector has already felt the negative impact of the pandemic on its performance much earlier. Globally, travel restrictions and measures started as early as January 2020. Domestic and international tourists limited their travel due to fear of contracting COVID-19, which reduced the number of domestic and international customers for this retail channel. As a result of low customer traffic, many leading duty-free retailers had to cut back their store hours at downtown and airport locations.

Global Travel Retail Market: By Channel

Based on channels, the global travel retail market is segmented into Down Town & Hotel Shops, and Airports. The airport segment dominated the market in 2020 and continues to lead the overall market in terms of revenue. Due to low airfares and increasing living standards, there is a rise in the number of air passengers, which is likely to contribute to the segment’s growth. Airports have been making myriad efforts to increase revenue from non-aeronautical resources, which contributes to the growth of the retail sector in this segment.

Global Travel Retail Market: By Product

Based on products, the global travel retail market is divided into Wine & Spirit, Fashion & Accessories, and Perfume & Cosmetics. The perfume and cosmetics segment has the highest market share primarily because there are a variety of personal care products available through different retail channels. For instance, many cosmetics brands like L’Oréal have launched new stores across multiple airports worldwide. Perfume and cosmetics segment growth is expected to be driven by this factor. The second-largest segment is wine & spirit, which is projected to witness steady growth in the coming years.

Global Travel Retail Market – Regional Insights

Based on regions, the global travel retail market is segmented into North America, Latin America, Europe, Asia Pacific, Middle East, and Africa. The Asia-Pacific region dominates the market in terms of revenue and is expected to maintain its supremacy over the forecast period. In emerging Asian countries, particularly China, the rising middle-class population and the booming travel and tourism sector will likely boost the market. Many stores in the APAC region align their strategies and products to meet the needs of Chinese travelers. In developing countries, rising living standards and higher consumer disposable income levels drive market development.

Recent Developments

 

  • In February 2021, Hudson Group, owned by Dufry, opened its first Hudson Nonstop store at Dallas Love Field Airport (DAL) using Amazon's Just Walk Out technology. Using Just Walk Out technology, customers can pick up products in a physical store, pay for their purchases, and leave.

 

  • In January 2021, in partnership with Shenzhen Duty Free Group, DFS opened the first phase of a new downtown duty-free retail complex in Haikou Mission Mills, Hainan. The DFS Group will exhibit a luxury line-up across a range of categories at the first China International Consumer Products Expo in Hainan on May 7-10, 2021.

 

Competitive Landscape

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.

 

Innovative marketing campaigns and unique price offers may help players survive the competitive market for duty-free and travel retail products.

 

Scope of the Report:

Attribute

Details

Years Considered

Historical data – 2017-2020

Base Year – 2020

Forecast – 2021 – 2027

Facts Covered

Revenue in USD Billion

Market Coverage

U.S, Canada, Germany, UK, France, Italy, Spain, Brazil, Mexico, Japan, South Korea, China, India, Argentina, UAE, South Africa, Saudi Arabia

Product/Service Segmentation

By Channel, By Product, By Region

Key Players

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), and The Nuance Group, and other key manufacturers.

           

 

  • By Channel
  • Down Town & Hotel Shops
  • Airports
  • By Product
  • Wine & Spirit
  • Fashion & Accessories
  • Perfume & Cosmetics
  • By Region
  • North America
  • Latin America
  • Europe
  • Asia Pacific
  • Middle East
  • Africa

Frequently Asked Questions:

Ans: The global travel retail market has reached USD 54.3 Billion in 2020.
Ans: 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.
Ans: The 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), and The Nuance Group, and other key manufacturers.
Ans: Airports accounted for the largest share in the global travel retail market.
Ans: The perfume & cosmetics segment is growing at a higher rate in the global travel retail market.