Protecting the industry
Supporting travel retail’s ‘essential service’ and 320,000 jobs
The survival of an industry is stake, says APTRA President Grant Fleming in a call for the duty free & travel retail sector to be classified among essential services vital to supporting the aviation, maritime and tourism industries.
Over 320,000 jobs and US$36 billion in sales: this is what is at stake in Asia Pacific travel retail as the industry grapples with the impact of the COVID-19 crisis, according to the Asia Pacific Travel Retail Association (APTRA).
The industry, warns APTRA, is in danger of being overlooked by politicians as they devise financial rescue measures to cope with the outbreak and its deep economic effects. APTRA is approaching governments in over 45 countries across the region to support local and front-line employees in the region by including duty free & travel retail in the same financial support packages as airlines, airports and maritime industries.
APTRA President Grant Fleming: The figures present a powerful argument for supporting travel retail
Asia Pacific duty free & travel retail is the engine of a global industry (Centrair Duty Free at Chubu Centrair International Airport pictured)
The broad-reaching appeal is supported by a report recently commissioned by APTRA and the Duty Free World Council (DFWC), entitled ‘The Economic Impact of Duty Free & Travel Retail in Asia Pacific’ – a key tool in underlining the travel retail industry’s vital input to the aviation, maritime and tourism sectors, and the economies and employment across the region.
The report, published in October 2019, shows that the industry provided over 320,000 jobs in Asia Pacific in 2017 (a figure certain to have been enhanced considerably since) and made a contribution of almost US$15 billion to GDP.
Fleming said: “These are staggering figures that help us present a powerful argument for support and we are using the report to avert the risk of governments overlooking these vital economic drivers. Our membership base is now at its strongest in our 15-year history and the active involvement of our members in this campaign will be invaluable.
“The APTRA board also encourages other companies within the industry to get onboard by joining APTRA to make our collective voice even stronger. We have also directly contacted individual airports across the region to use their unique government relationships to identify duty free and travel retailing as part of the aviation industry in their countries. ”
Alongside its advocacy efforts the association is investing in a regional communications campaign, supported by Kavanagh Communications, to raise awareness with national and business media across the Asia Pacific region.
The unprecedented downturn in travel is profoundly damaging for every retailer and all categories
The Economic Impact Study shows that:
- In 2017, an estimated US$36.2 billion was spent on duty free & travel retail in the Asia Pacific region.
- Non-aeronautical revenues provide airports with the funds needed to continue to invest in airport infrastructure and service improvements.
- 79% of all duty free and travel retail sales in the region occurred in East Asia.
- Duty free & travel retail spending in the region accounted for an estimated 140,900 direct jobs and US$7.6 billion in direct GDP.
- Together with the businesses that supply the goods and services (indirect impacts) and spending of employees in the wider economy (induced impacts), duty free & travel retail in Asia Pacific is estimated to support a total of 320,200 jobs and US$14.7 billion in GDP (2017 figures).
(For the full report, contact email APTRA Executive Director Christina Oliver at email@example.com)
Fleming says: “Our objective is simple: we are seeking commitment from governments to apply financial support to the duty free and travel retail industry by including us within the designated community of essential services deemed vital in supporting the aviation, maritime and tourism industries that are so critical to the region.
“Let’s be in no doubt of the imperatives in this drive for action. Our industry dynamics are vastly different to domestic market retail because we are dependent on the return of passenger traffic. This campaign is fundamentally about securing financial support for industry survival and we are encouraging our association members in different countries to get behind it and use their existing connections to deliver the message to their governments.”
A call for aid around the world
The urgent clamour for support from governments and other stakeholders from APTRA in Asia Pacific (see main feature) is mirrored around the world.
ACI World Director General Angela Gittens, whose organisation represents airports worldwide, warned that relief measures must be equitable for all actors in the system. She stressed that airports employ more than 6.1 million people globally (directly or indirectly), or 60% of all those working in the aviation sector.
Airport industry losses of up to US$70 billion are expected as a result of COVID-19 according to current forecasts, ACI World said, when compared to a projected pre-crisis baseline for 2020. Estimated losses are almost equivalent to the entire revenue base of the world’s 50 busiest hubs, and this does not take into account “the losses that the other service providers at airports will inevitably incur”.
The US government has pledged US$10 billion in direct assistance to airports as part of its US$2 trillion stimulus package for the economy, which was agreed last week.
Concessionaires’ interests are not directly addressed in the bill but associations including the International Association of Airport Duty Free Stores, the Airport Restaurant and Retail Association and the Airport Minority Advisory Council are pushing for a share of the airport relief package. They have urged airports to offer rent relief and other financial measures, as well as halting leasing processes until the COVID-19 crisis is under control.
The Canadian Airports Council (CAC) has reignited its calls for arrivals duty free in Canada as part of a number of measures designed to reinvigorate the country’s airports. And in Latin America, duty free association ASUTIL and ACI Latin America-Caribbean have formally requested government assistance in a joint letter issued on 1 April.
In Europe, a joint letter from Airports Council International (ACI) Europe, the European Travel Retail Confederation (ETRC), the Airline Catering Association (ACA) and Airport Services Association (ASA) urges the European Commission and national governments to safeguard the travel retail and airport services sectors.
Angela Gittens: ACI is fighting to defend the rights of airports and their business partners amid what she has called the “existential threat” posed by this crisis
The Moodie Davitt eZine
Issue 278 | 7 April 2020
The Moodie Davitt eZine is published 12 times per year by The Moodie Davitt Report (Moodie International Ltd). © All material is copyright and cannot be reproduced without the permission of the Publisher. To find out more visit www.moodiedavittreport.com and to subscribe, please e-mail firstname.lastname@example.org