The Asian duty-free market is growing at five times the global growth rate.
New data released by the travel retail trade association TFWA (Tax Free World Association) shows that sales in the first quarter of 2016 rose by 5 per cent in Asia-Pacific. Global growth was just under 1 per cent.
The TFWA is optimistic that the duty-free sector “faces a bright future” at a time when other sectors of the international retail market are struggling.
Global duty-free sales are estimated at US$62 billion according to duty free and travel retail specialist Generation Research. The market has been growing steadily for the past six years, and while it suffered a decline in 2015, the figures for the first quarter of 2016 show the business is back on its upward trajectory.
The fragrance and cosmetics category is the main driver of growth globally and its sales were up 7.8 per cent in the first quarter, while sales of wines and spirits were up by 4 per cent. Sales on board ferries grew by 6.5 per cent, while airport sales remained stable.
TFWA president Erik Juul-Mortensen said the figures allowed the sector to be cautiously optimistic and tips further growth from the booming air travel market.
The trade association Airports Council International predicts 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 per cent.
The World Tourism Organisation’s says international tourist arrivals were up 4 per cent in 2015 to reach a record of 1.2 billion, 50 million more than in 2014. The latest figures for the first half of this year show that tourism got off to a strong start in 2016, with international arrivals up 4 per cent compared with the same period last year.
“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.”