Navigating the crisis

Across the world, the travel retail sector is facing up to its greatest crisis yet in the COVID-19 outbreak. While the travel downturn occurred later in Latin America than most other regions, the impact on business is just as severe.

“Whether it is Brazil, Uruguay, Argentina and Chile, almost the whole of each country is closed,” says Asociación Sudamericana de Tiendas Libres (ASUTIL) Secretary General José Luis Donagaray. “There are no flights and all the tourism has been cancelled, so at the moment the activity is zero.”

A lack of travellers does not mean a lack of activity for the industry and its trade bodies. Summarising ASUTIL’s strategy, Donagaray says: “We are acting with Airports Council International (ACI) directly, via the airports and with the duty free operators to send letters and discuss ideas on how we can tackle this situation, as well as to prepare for the day after.”

On 30 March, ASUTIL finalised a series of letters signed by both the association and ACI Latin America. Adapted for each country and sent to governments across the region, they call for support for the industry.

The key messages lean on the Duty Free World Council (DFWC)’s 2018 report on the Economic Impact of Duty Free & Travel Retail in the Americas, which estimates that duty free and travel retail spending across the Americas accounts for an estimated 61,400 jobs and US$8.2 billion in GDP.

“We will say to the governments that there are problems for all industries. but that we are not asking for them to provide a solution – we are talking about some solutions we have,” Donagaray says.

One of ASUTIL’s primary solutions is for duty free retailers to be given the chance to sell online for home delivery during the crisis. Donagaray explains: “If the government permits duty free stores to sell online to people inside the country, that allows them to sustain the operation and keep a taskforce working.”

Donagaray points out that the majority of retailers already have a pre-order platform for payment of items ahead of collection in store, making the introduction of ecommerce “easy” if permitted by governments.

“We have to get agreement with government on the allowances and how many times customers can purchase in this period,” he adds.

Despite the current challenges for the sector, Donagaray is keen to look to the future and to ensure the Latin American duty free industry is ready to rebuild when the crisis has passed.

At the start of March, when COVID-19 was starting to have a material impact on day-to-day life in Latin America, Donagaray spoke of the “resilience” of the industry.

“Investments continue: there have been new terminals in Argentina, new stores in Brazil, investment in Mexico and Paraguay will have a new airport,” he said. “This shows the continued resilience of our industry. It works in the mid to long term – not the short term. We have the spaces, the products and the customers, so when this is over with, we will have a good and swift recovery.”

Commenting now on the industry’s resilience, Donagary points out that he joined ASUTIL in March 2001 – six months before the 9/11 terror attacks. He adds: “We got out from that and we are going to get out from this one. It is not going to be easy – nothing is easy today – but we are going to do it.”