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Forbes
05-07-2025
- Business
- Forbes
As Dubai Duty Free Tops $1 billion In First Half, What's Next?
Large new arrivals stores have boosted sales for Dubai Duty Free. Refurbishments and retail expansions by Dubai Duty Free (DDF) at Dubai Airport—the busiest international airport in the world—have paid off as the retailer generated record half-year sales reaching 4,118 billion UAE Dirhams ($1.13 billion), up by 5.3% year-over-year. The craze for Dubai chocolate was also a big factor with 2.5 million bars sold in the six months to June, pushing its share of the confectionery category up to a whopping 40%. The world's biggest airport retailer operating in a single country, added about $57 million to last year's half-year result with much of that extra revenue coming from a surge in travel over the Eid holidays (at the end of March and the beginning of June) and some early summer getaways at the airport. The airport retailer saw 'robust growth' in April, May and the first half of June. DDF's managing director, Ramesh Cidambi, said in a statement: 'While we await the final passenger numbers for June 2025, the spend per passenger is likely to be better than last year June. This performance is a testament to our team's hard work and the strength of Dubai as a global travel hub.' Among the major leaps forward have been the successful renovation of three arrivals shops in the first half of the year which will help deliver extra sales. For example, in May these stores across all three terminals at the airport posted a combined growth of 6.3% following the completion of refurbishments. Second-half optimism—with caveats DDF is now gearing up for a busy summer at Dubai International (DXB). Around 3.4 million passengers are expected to travel through the airport between June 27 and July 9 alone—the start of the season—with daily volumes forecast to average over 265,000. Cidambi cautioned on summer spending because, while volumes rise, this doesn't always translate into spending. In an interview with Dubai One TV, he said: 'Summer can be complicated. You get a lot of passengers, but not necessarily as much spend: a family of four will not spend the same as four individuals.' Ramesh Cidambi: 'Summer can be complicated. You get a lot of passengers, but not necessarily as much ... More spend: a family of four will not spend the same as four individuals.' State-owned operator, Dubai Airports, noted, however, that in June 'the wider regional situation' referring to the Israel-Iran 12-day war, had led to some delays and cancellations across the network. U.S. sanctions on Iran have followed the ceasefire on June 24, and the region remains febrile, which could cast a shadow across DDF's second-half ambitions. Dubai Airports said: 'DXB continues to monitor the situation in close coordination with authorities and airline partners, prioritizing the safety of all guests and employees on the ground and through to take-off.' DDF has some cards up its sleeve in the form of three luxury boutiques opening in Terminal 3 (Concourse A)—the constantly innovating Louis Vuitton, Chanel, and Cartier—which are hoped will help spike sales. Cidambi said: 'We are looking forward to an equally busy second half.' In the first six months of 2025, spending across all of DXB's terminals continued to increase. Duty-free sales in T3 increasing by 6.4%, and by 5.3% in T1. All key passenger regions showed positive sales during the period, with Europe up 16.9%, Russia up 4.4%, the Middle East up 8.2%, with the Indian-sub continent trailing at 1%. Transition times beckon in Dubai DDF operates at both Dubai International, where the vast bulk of DDF's revenues come from, and at Al Maktoum International, the United Arab Emirates' eventual five-runway airport where all of Dubai's airport traffic will transfer by 2034. At that point DXB will close to passenger traffic. In 2024, DXB welcomed a total of 92.3 million passengers, the highest annual traffic in its history. Al Maktoum, also called Dubai World Central, is shaping up to be an even bigger successor of its sister gateway and is now being expanded thanks to an investment injection of $35 billion, announced in May last year. For now, DWC primarily serves cargo, charter, and seasonal flights, along with private aviation. Its passenger operations are limited, with just over one million passengers processed last year, which was about double that in 2023, mostly via low-cost carriers. According to Dubai Airports, over 700,000 of the 2024 numbers were Russians who are traditional high spenders in duty-free. Those annual numbers will ramp up quickly in the coming decade and DDF will play a central role in shaping the retail landscape of the mega-hub, which has a projected capacity of 260 million passengers annually on final completion. For more stories on Dubai Duty Free, follow this link.
Forbes
04-06-2025
- Business
- Forbes
Avolta And Lagardère Build Out Their Latin American Retail Portfolios
Rival European travel retailers, Avolta and Lagardère Travel Retail (LTR) have made in-roads into the Latin American airport retail market, in Mexico and Peru respectively. Paris-based, LTR has revealed a large retail offer in the new terminal of Peru's main airport, Jorge Chávez International Airport, which is operated by Lima Airport Partners. In total, the travel retailer has inaugurated more than 43,000 square feet of store space, plus a dining area covering 35,500 square feet branded Nación Sazón – The Land of Flavours which Lagardère describes as 'Latin America's newest and freshest hub for local cuisine.' Meanwhile, Switzerland-based Avolta, has won a new five-year contract at Guadalajara Airport in Mexico allowing it to expand its retail operations there to cover around 13,000 square feet which includes the opening of two new stores. LTR's new commercial spaces in Lima, follow two years of construction at the airport which, last year, was the fifth busiest airport in Latin America processing 24.5 million passengers, up by 15%. The strong rebound topped the 2019 record of 23.6 million, though this is mainly thanks to the high level of domestic air travel; international numbers are still about 6% off 2019. Lima Airport Partners—80.01% owned by Germany's Fraport and 19.99% by the International Finance Corporation (part of the World Bank Group)—wanted a strong focus on gastronomy to appeal to lucrative transfer passengers in particular, whose share of travelers remains below pre-Covid levels. Nación Sazón which houses the food and beverage (F&B) offer features 13 units, including nine leading Peruvian brands that exemplify the country's rich culinary heritage. Among them are exclusive concepts developed with two of South America's most celebrated chefs. They are the blended Japanese and Peruvian SAKAI by Mitsuharu Tsumura, chef at Maido ranked fifth among The World's 50 Best Restaurants 2024, and the seafood-inspired CALLAO by Jaime Pesaque, chef at Mayta, ranked 41st. Other chef-led concepts include creole cuisine from José del Castillo at Las Reyes by Isolina, gourmet burgers by Javier Miyasato at Burger Boy, and barbecue chicken from Mitsuharu Tsumura at TORI. Cyril Letocart, CEO of Lagardère Travel Retail Peru said: 'Nación Sazón is a true gastronomic hub that brings Peru's unique cuisine to the world. We have put our heart and soul into this project and are very proud of the results.' Referring to the project as a whole he added: 'We have built what we believe is Latin America's new benchmark for travel retail and airport dining.' The departure retail space features El Mixólogo, a cocktail and tapas bar where passengers can also purchase local labels to take home. Lagardère has also added a VIP room in the main duty-free shop to serve high spenders. The store design pays tribute to Peru's landscapes from the coasts and highlands to the Amazonian forests and Andes mountains. Lagardère Travel Retail is making a big investment in Lima. It launched there in 2021 with 80 employees, but this latest expansion will grow that number to over 750 by this summer. In terms of international passengers, the retailer could well be serving a large number of Spaniards and Americans. Among the strongest recoveries last year (versus 2019) were from Madrid (up 133%) and Miami (up 137%). The two destinations accounted for 19% of international traffic. Further north in Mexico, Avolta's new five-year contract at Guadalajara Airport—at the heart of the country's main tequila producing region—will enable the retailer to fully renovate its three existing stores and open two new ones. Mexico is a big market for the airport retailer; with more than 80 stores across Mexico City, Cancun, Monterrey as well as Guadalajara. Guadalajara is the third busiest airport in the country and is operated by Grupo Aeroportuario del Pacífico (GAP). It processed almost 18 million passengers last year. The gateway continued to grow, unlike its larger counterparts, Mexico City and Cancun, where traffic fell by about 6%. Susana Romero, commercial director at GAP, described Avolta as one of the most important stakeholders in Guadalajara Airport, and added: 'As part of our effort to maximize revenue from commercial activities and meet passenger expectations, GAP expanded and redesigned the airport terminal to accommodate more general specialty retail, duty-free shopping and F&B. The passenger flow was also redirected to increasing exposure to the new commercial areas.'
