A broken model?

Filippo Bianchi, Partner and Managing Director Boston Consulting Group, explored the reasons why the duty free and travel retail industry will grow. Firstly, it is a data-rich environment, secondly it has a predictable customer base, and thirdly it offers a unique pricing value proposition. The GTR market had, he said, a "food chain" mentality, but there is much to be gained by operating as an "ecosystem".

Ignace van Doorselaere, Chief Executive Officer of Neuhaus, addressed the question of how the industry can combine cash generation with unforgettable moments for the traveller. Good decisions are, he said, based on EBITDA and/or experience. However, in order to create “moments”, the industry needs to find the right mix between the two.

Sunil Tuli, Managing Director King Power Group (HK), opened a high-powered panel session to continue the session. Emmanuel de Place, Chief Operating Officer, Lagardère Travel Retail Asia Pacific, stressed the need to shift KPI from spend per passenger to global sales. It may be that our customers are not “captive” any more, but we have, he said, plenty of opportunities to catch them.

Aer Rianta International Chief Executive Officer Jack MacGowan said that it was in the nature of a landlord to extract as much rent as they can and take as little risk as possible, but what brands and retailers have to do is present a picture that is more attractive. Exploring ways to combat leakage to other channels would, he believes, be the most convincing way to encourage airports to do something different.

Keith Hunter, Co-founder of Hunter Palmer Global Retail Solutions, stressed that while revenue is always going to be key, we need to put the customer at the heart of everything we do. If the wrong concession deal is in place, everyone will suffer, he stated, and the quality of the customer experience is negated completely.

When asked if airports were “the sharks of the value pool”, Scott Collier, Vice President, Customer and Terminal Services Greater Toronto Airports Authority, said that airports will have the courage to change if brands and retailers are equally willing. We should all be aiming to create the best airports we can, and if we agree on that, airports will be prepared to think about things differently, he stated.