Of particular interest to duty-free operators and retail brands is the long-haul segment, which, according to ForwardKeys’ on-the-book data, will reach 2019 levels during the Christmas peak season
As revival of international tourism continues to pick pace, data is now emerging about how different segments of the travel economy are shaping up, post Covid-19 pandemic. In this context, the latest report by ForwardKeys, a market intelligence firm in aviation and travel industry, says that the easing of entry requirements throughout Europe has come as a relief to the entire travel industry – not least the travel retail sector, which relies on the steady flow of wealthy travellers through airports.
As a result of Europe’s reactivation, both intracontinental and long-haul inbound travel are recovering well. Of particular interest to duty-free operators and retail brands is the long-haul segment, which, according to ForwardKeys’ on-the-book data, will reach 2019 levels during the Christmas peak season.
Affluent tourists from the US top the ranking
Among the long-haul markets leading this recovery, the United States tops the table, having reached 95 pc of its 2019 performance and, based on on-the-book arrivals, will reach 96 pc in the autumn months. With the US historically representing an important market for travel retail, this is a further boost for Europe-based duty-free operators and airport retailers that have suffered during the pandemic.
Another long-haul market, Mexico, is likely stage the sharpest recovery in the fall, as ForwardKeys data suggests that from Mexico, which was 12 pc lower in July-August 2022 as compared to the same period in 2019 would surge to 15 pc over the 2019 comparable levels in September-November period. Only Canada is expected to worsen, falling from 13 pc lower in the summer months to 18 pc below 2019 levels in the period September to November.
In yet more good news for the European travel retail sector, US visitors to the continent are, on average, spending more on their overseas trips than before the pandemic. Compared to 2019, premium cabin class travel is up 18 pc, while economy is still down by 8 pc.
Multi-destination trips in Europe are back
Another noteworthy trend is the return of multi-destination trips to pre-pandemic levels. This summer, 32 pc of US arrivals in Europe visited two or more destinations, the same proportion as in 2019 and 10 percentage points greater than in 2021. This suggests that the fear of being caught out by changing travel restrictions is fading, and that Americans generally feel more confident about crossing multiple borders during their stay. It is also a positive development for travel retail as it allows airport stores in more European destinations to profit from this highly valuable source market.
While the return of multi-trip destinations is a return to “normal” travel behaviour, the airports used to reach European destinations is not. The new Istanbul airport, which only opened a year before the start of the Covid-19 pandemic, benefits most from the return of American travellers with 76 pc more traffic than in 2019. It thereby starts to accomplish its promise of becoming a new duty-free shopping hub.
Other airports, some of which surprising, that have benefited from more passengers from the US passing through include Vienna, Montreal, and Reykjavik with all three comfortably surpassing their 2019 performance, at +65 pc, +65 pc and +38 pc, respectively.
In terms of large airports in Europe, the performance is more mixed bag, with Frankfurt being 14 pc higher, Munich 26 pc up, Zurich up 8 pc, but Paris Charles de Gaulle down 13 pc, Amsterdam Schiphol down 10 pc and Madrid Bajaras at same level as 2019.
Forwardkeys says that for a sector that was hit harder than most by the Covid-19 pandemic and resulting travel restrictions, the return of affluent US travellers to Europe – and their propensity to visit more than one destination – is a hugely positive development. Even more encouragingly, the trend looks set to continue in the months ahead.
