ASUTIL Report – Introduction
A fast rebounding market
To coincide with the ASUTIL Conference on 7-8 June, we have produced a special section on Latin American travel retail, in which we speak to leading players in this fast-recovering market. We begin with our introduction and comments from regional association ASUTIL.
Among global regions in 2022, Latin America & Caribbean delivered among the strongest passenger traffic recoveries, with airport numbers down by just -7% compared to 2019 (ACI figures). In Q1 this year, some locations were even running at +25% against pre-pandemic times.
That’s the backdrop to this week’s ASUTIL Conference (7-8 June), which will gather around 250 delegates in Buenos Aires.
ASUTIL Secretary General José Luis Donagaray says: “Full recovery to 2019 levels will take us probably until late next year but some operators are achieving this already.
Sailing ahead as recovery gains momentum at Buenos Aires Duty Free
“Investment and development of stores continues, which shows there is confidence about recovery.”
Terminal investments from Buenos Aires to Lima are among the completed or upcoming developments that ASUTIL highlights, with new ferries and border stores also opening.
Dufry promotes its offer and special events in the Colombian capital
Land border stores within Brazil first opened in 2019, and despite some legislative challenges, investment continues. As reported, the duty free allowance for Brazilian shoppers in these stores rose from US$300 to US$500 in late 2021.
Donagaray says: “In Brazil we will see further border shop openings, probably around five more in 2023. But there are complexities in setting up new stores, with lots of regulation. It takes time. In Uruguay, border shops have been going for over 35 years so there is a history there. In Brazil it will take time to develop, and you’ll see this happen as travel and transport infrastructure emerges.”
Neutral Duty Free: Business on the borders is firmly back
Some regional challenges remain, ranging from the macro-economic situation in markets such as Argentina to the price of airline tickets and the gradual reinstatement of many international flight frequencies by airlines.
There is also opportunity. Taking the airports sector alone, Latin America-Caribbean remains below global averages for the proportion of retail within overall revenues, according to ACI. Just 28% of airport revenues today come from non-aeronautical sources in the region, and of these, duty free accounts for over half, and these are also key to profits.
Puerto Iguazú Duty Free Shop: A fine showcase for confectionery at London Supply
The market challenges will be discussed over coming days at the ASUTIL event, with numbers around two weeks in advance running at close to -10% of figures in 2017, the last conference held.
Donagaray says: “We have a great programme lined up and will talk about the consumer, the economy, the picture for airlines and airports, digitalisation and other issues.”
How the new Lima Airport terminal will take shape through LAP over the next two years
ASUTIL President & CEO Dufry Brazil Gustavo Fagundes says: “This year’s ASUTIL Conference will explore the factors that will define business in the post-pandemic world, from changing consumer behaviours to traffic patterns in the region.
“Our programme of speakers features experts in their fields who will provide the latest information on the opportunities and challenges ahead. We are looking forward to the thought-provoking debates and discussions that will take place during the conference and welcoming you all to Buenos Aires.”
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