A beacon of hope for the future of the global duty free industry

By Kapila Gohel, Editor, DFNI

This year, the global duty free and travel retail industry celebrates its 70th anniversary — from humble roots at Ireland’s Shannon airport to the $62 billion industry we see today, shopping at airports, inflight, on the borders between territories and on the seas has become an important part of the travel experience.

Following a period of relative peace and prosperity — when the world’s most talked about consumer base, millennials, came into this world (1980-1995) — the geopolitical landscape has been thrown into turbulence. Terrorism, currency fluctuation, disease, the Trump administration’s policies, Brazilian politics, Russian travel sanctions, Chinese government crackdown on ostentatious spend, and Brexit are just some factors that have thrown the travel world into disarray. It is no surprise the duty free and travel retail industry has suffered.

However, there are beacons of hope amid the chaos. While the strong dollar may deter spend from countries with weakened currencies, there has been an uptick in spend from American travelers, as several operators and brands have told DFNI recently. And despite global criticism of the Trump administration, a positive development is its pledge investment in the modernization and rebuild of U.S. airports — for the good of domestic and international passengers.

In Europe, while the U.K.’s decision to leave the European Union (EU) has put a dampener on future travel prospects, it has resulted in a decline in the pound sterling — a boon to international travelers arriving in Britain. In fact, industry bodies are sowing the seeds for the return of duty-free sales between the U.K. and EU — a move that could provide an added boost to the duty-free industry.

Meanwhile, in the Americas, a reverse trend is forming in the growth of duty-paid sales – something that has been the norm in Europe since the end of intra-Europe duty free. As one key player has told DFNI, travel retail in the U.S. is gradually becoming an important part of the journey for foreign and domestic travelers. While this evolution may take a very different path to travel retail in Europe and Asia, this progress highlights the industry’s commitment to evolve and adapt.