Travel Retail Serving as the Major Revenue Generator for the Transportation Sector
Travel retail, or duty-free retail, is a sales channel that is majorly involved in selling exclusive goods such as wine, perfumes, cosmetics, and lifestyle products to international travelers. Value-added tax, sales tax, and import tax are mandatory to be paid for these limited-edition products in host countries, while they are made tax-free in retail shops at the airports. As a result, travel retail serves as the major revenue source for tourism, aviation, and maritime sectors.
Get Exclusive Sample Pages of This Report: https://www.alliedmarketresearch.com/request-sample/1606
Major product categories that are sold in travel retail stores include perfumes, which are generating the highest revenue and accounting for 30% of expenses, followed by spirits & wines at 17% and accessories at 15%. Governments of various countries are now focusing on developing cruise ships, airports, and seaports with large retail stores, considering their key economic role in the development of the transport sector. Increase in government initiatives such as improvement in duty-free reforms is transforming the transportation industry.
For example, Hainan, an island province of China, has seen significant growth in duty-free sales in recent times This is attributed to the fact that the Government of China has relaxed policies on duty-free expenses and has established Hainan as a free-trade port. A news published by China Daily reports that offshore duty-free sales of Hainan increased from $5.1 billion in 2019 to $10 billion in 2023. The surge in shopping has also boosted tourism, with 90 million visitors in 2023, making a 50% surge from the previous year.
Asia-Pacific to Dominate the Travel Retail Industry
The travel retail industry is anticipated to experience notable growth in the recent years driven by factors such as development of airport infrastructure and rise in travel & tourism. According to Allied Market Research, the global travel retail industry is predicted to reach $187.1 billion by 2031, exhibiting a CAGR of 9.6%. Asia-Pacific is anticipated to emerge as the most lucrative market for travel retail due to the presence of large number of retailers in countries such as India, China, and Thailand. Furthermore, rise in disposable income and surge in middle-class population act as the key driving forces of the industry in the region. A study published by PwC in 2023 claimed that the global middle-class population is estimated to touch 5.3 billion by 2030, among which a major portion resides in Asia-Pacific. Further findings reveal that among these, 80% of these are younger, brand-conscious travelers, who serve as the major target consumer base for travel retails. Their strong preference for premium products and unique experiences makes them a prime target for the industry.
Moreover, as per the Airports Council International, Asia-Pacific is estimated to manage approximately 3 billion air travelers annually, which is the highest globally. As a result, with a massive increase in the number of passengers, the travel retail outlets are expected to grow at a notable pace to meet the growing demand of a large consumer base.
Insights into Recent Developments
The competition in the sector has intensified due to constant innovations and increasing efforts to garner maximum share of the travel retail industry. For instance, Avolta, world’s leading travel retailer, commenced a joint venture with Hubei Airport Group in October 2023, to become the primary operator at the Wuhan Tianhe International Airport, which improved its presence in China.
Singapore Airlines (SIA) and Tata Sons have signed an agreement to merge Air India and Vistara. As part of the deal, SIA plans on investing INR 20,585 million ($250 million) in Air India.
ANA Holdings has acquired Peach Aviation, which has strengthened its position in the low-cost carrier market.
On the other hand, WH Smith Plc, a giant British retailer, has expanded its travel retail operations worldwide to meet the growing demand for convenient shopping. Its airport retail stores are established in about 120 airports, some of which include Singapore Changi, London Heathrow, Madrid Barajas and Sydney Airport, and Hartsfield-Jackson Atlanta. It further owns 110 stores in rail stations in Europe, the UK, Australia, and Asia.
These strategic developments improve operational efficiencies and increase market presence.
Enquire before buying: https://www.alliedmarketresearch.com/purchase-enquiry/1606
Final Thoughts
Travel retail has emerged as a significant revenue driver for the tourism, aviation, and maritime sectors. In addition, the industry is anticipated to witness robust growth in Asia-Pacific, particularly in China and India, due to increase in government initiatives, rapid infrastructure development, and rise in middle-class population. Strategic partnerships and agreements are playing an important role in further strengthening market positions of key players such as Avolta, WH Smith, and Singapore Airlines.
Contact:
Davin Correa
1209 Orange Street,
Corporation Trust Center,
Wilmington, New Castle,
Delaware 19801 USA.
Int'l: +1-503-894-6022
Toll Free: +1-800-792-5285
Fax: +1-800-792-5285
help@alliedmarketresearch.com
Web: www.alliedmarketresearch.com
Allied Market Research Blog: https://blog.alliedmarketresearch.com
Follow Us on | Facebook | LinkedIn | YouTube |
About Us:
Allied Market Research (AMR) is a full-service market research and business consulting wing of Allied Analytics LLP based in Wilmington, Delaware. Allied Market Research provides end-to-end solutions along with information, education, advocacy, and networking resources to SMEs and early-stage start-ups to bring excellence to their processes. In addition, we offer a nurturing environment required to develop and grow businesses, including business planning; virtual support; market intelligence; acquiring resources; and getting direct access to finance, suppliers, and other experts to boost the growth of businesses and entrepreneurs.
Our bundled and hassle-free business support systems are customized to meet the needs of SME consultants and industry leaders. Moreover, our large network of skilled consultants and experts help start-ups get the business on a roll.
✍ **𝑨𝒓𝒕𝒊𝒄𝒍𝒆 𝒘𝒓𝒊𝒕𝒆𝒓: Akshata Tiwarkhede
Comments
Post a Comment