Industry Survey
Travel Retail Voices IV
Creating closer partnerships
Through the crisis, airports, retailers and brand owners came together to solve the short-term challenges presented by the pandemic. But how does the future of those relationships look? The Lagardère Travel Retail study offered some insights from across the industry Trinity. “Airports point out that they want to help their retail tenants to do more business and grow, whether that is by adding ecommerce, concierge services, or in other ways. But all sides grapple with the data question and what should and should not be shared. “Strong partnerships work well when there are mutually beneficial goals, and when companies share in the risks as well as the rewards. The pandemic has exposed weaknesses in the concession model, but whichever model is used, relationship building between parties and full transparency will be needed going forward.”
A majority of airports respondents agrees that concession fees should be adapted to the environment.
With minimum annual guarantees (MAG) broadly waived during the crisis, the conversation has turned to whether this rental model is fit for purpose in the future, given its lack of flexibility. The report states: “While some airport landlords still regard MAGs as having value by ‘pushing retailers to reach higher results’, many more are realising that partnership approaches can be better. The transactional nature of the concept means that different stakeholders work in silos, the worst possible scenario during a crisis like COVID. “Fortunately, a new conversation about business models has opened up: one that can reinforce the resilience of the industry – not undermine it. An online survey conducted by Lagardère Travel Retail at the end of 2021 revealed 61% of airports agree that current concession fees are no longer fit for the new environment, and that fees should align to passengers volumes, at the least.” Many agreed that central to a path forward must be flexibility, the ability to adapt to new situations and variety in contracting models.

The economics of the airport marketplace came into question via the survey
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