The Trinity Forum: Avolta
Xavier Rossinyol – “Let’s make the journey as attractive as the destination”
The business combination of Dufry and Autogrill to form a single retail and food & beverage powerhouse – now named Avolta – is a game-changing industry story, one whose implications CEO Xavier Rossinyol eloquently outlined in a memorable session on day one.
He had a powerful message about future industry growth, noting that passengers today are projected to reach more than 20 billion by 2041 [9.2 billion travelled in 2019, for context -Ed].
“Passengers will keep growing because travelling is a fundamental need, a genetic need of the human being. And 90% of the world’s population has never travelled. So there has been growth and there will be growth in the future,” he said.
“We talk about consumer experience, we can talk about travel but at end of the day we are all business people. This is about increasing the spend per head, the spend per passenger. If we want growth, we need to work differently. We need to work smart.
Xavier Rossinyol in conversation with Martin Moodie: To invest in the future may require sacrificing short-term profits
“Many times it’s not doing something absolutely magical, it’s just doing things that are happening in the high street or elsewhere. And we have to do it together.
“In order for this industry to keep growing, we all need to benefit. The brands need to benefit, the airport partners need to benefit and the operators [concessionaires] need to benefit. But I’m convinced that together we can increase that spend per head and will generate enough money for all of us here.”
However, he warned: “But we need to understand that sometimes we need to invest in the future and to sacrifice short-term profitability. If we do that, I’m convinced we have success not just for the next five years, but success for the next 50 years.”
Discussing the evolving travel retail industry and the emergence of the new Avolta brand, Rossinyol said: “This industry 30 years ago was different – people [in the airport] were behaving in a different way. We have adapted and need to keep adapting, as the big difference now is the speed of change. What happened in a decade before now happens in three years or less.
“Through the merger of Dufry and Autogrill, as Avolta, we want to enhance the travel experience by combining retail and F&B. We believe that having the two businesses together increases our possibility to do a better job in understanding the passenger and in delivering what they want.
“Our strategy focuses on consumer-centricity, focusing on two things – the actual store, restaurant or a combination of the two, and digital engagement.”
Underlining the airport retail opportunity, he continued: “Our potential customers are metres away from where we have our stores, and this is absolutely unique. No-one else anywhere in the world has that, and I believe we are only leveraging on that in a small way [so far]. Through entertainment and making airport shopping and dining fun, let’s make the journey as attractive as the destination.”
In a conversation with Martin Moodie after his keynote address, Rossinyol gave his thoughts on the master concessionaire model in airport retail. A question on the model was asked in the context of Avolta’s recently announced joint venture in China with Hubei Airport Group to operate Wuhan Tianhe Airport Terminal 2 as master concessionaire.
“Airports should want an operator to invest in the business, a partner that shares information, that brings brands and entertainment – things that nobody else has ever done”
Avolta CEO Xavier Rossinyol
“First of all, I want to make clear to our airport partners that we are also very happy to have only the retail or F&B in any given airport. But we do believe that it’s an extra value if you operate the two businesses, they can reinforce each other from an obvious cross-promotion.
“We have talked a lot about data. If you know what the passenger is eating and drinking [in an airport F&B venue], it could be an obvious connection to confectionery and wine & spirits [in retail] for example, and vice versa.
“The Wuhan airport opportunity is just perfect because it combines in one location two of the key points of our Destination 2027 strategy. It includes expansion in Asia and the combination of F&B and retail in a master concession with 77 points of sale.
“It’s an opportunity for us to decide which spaces we operate separately as retail or F&B and which ones we put together. It is going to be happening in 2024, hopefully in the first quarter.”
Discussing the importance of an airport retail operator’s ability to invest in its offer, and having the contract terms to do so profitably, Rossinyol said: “An airport is a very complex place, and if we all work together, we all benefit. I think airports should want an operator to invest in the business, a partner that shares information, that brings brands and entertainment – things that nobody else has ever done.
“What I don’t want to see is companies coming into an airport with no money to do anything and just offer the same old thing. I don’t think that makes sense. With the dynamic passenger growth [that lies ahead] the [airport concession] world needs more investment or we cannot follow the passenger.”
He concluded: “We need a new paradigm of [airport-retailer contract] relationship that makes the industry sustainable for everyone, not just for some.”
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The Moodie Davitt eZine
Issue 329 | 22 November 2023
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