LONDON--(BUSINESS WIRE)--New research findings announced by leading duty free and travel retail trade association TFWA (Tax Free World Association) have confirmed that the duty free and travel retail sector faces a bright future at a time when other parts of the international retail market may continue to struggle.
The sector, currently valued at a significant $62 billion according to duty free and travel retail specialist Generation Research, had been growing steadily for the past six years, and while in 2015 it suffered a decline, the figures for the first quarter of 2016 show that the business is back on its upward trajectory. Total sales grew by just under 1% compared with the same period last year. Sales in Asia Pacific, a region that has for some time made a very significant contribution to the expansion of the sector, saw strong growth of 5%. The fragrance and cosmetics category is the main driver of growth globally and its sales were up 7.8% in the first quarter, while sales of wines and spirits were up by 4%. Sales on board ferries grew by 6.5%, while airport sales remained stable.
TFWA president Erik Juul-Mortensen said that these figures allowed the sector to be cautiously optimistic. Within the wider travel and tourism industries, all pointers would suggest that this bullish prediction is justified. Air traffic forecasts project that the number of people taking to the skies will continue to boom. The trade association Airports Council International says that passenger numbers worldwide will more than double from 2015, when the number of air travellers reached 7.2 billion, to just over 19 billion in 2035 – a compound annual growth of 5%.
The World Tourism Organisation’s report for 2015 showed that international tourist arrivals were up 4% to reach a record of 1.2 billion, 50 million more than in 2014.
“This can only be good news for our industry, and all the indicators would suggest that we have plenty to be upbeat about,” said Juul-Mortensen. “This is a great sector to be in, and with growth rates that have been, in many years, the envy of many high street retailers, duty free and travel retail presents a wealth of opportunities.”