Glimmers of Hope for Airport Retailers
Drop in Travel Causes Crisis for Airport Stores
The sharp drop in air travel during the pandemic has battered airport stores and restaurants. Last year, global revenue for airports contracted by more than half.
For years, airport stores have enjoyed a unique position in the challenging brick-and-mortar retail industry. Travelers in airports often have time to wander through stores and are willing to buy souvenirs, snacks, and other items at high prices. But as many stores were able to shift their operations online, many airport retailers were left in a difficult situation.
Sinking Revenue Around the World
It is estimated that US airport shops and restaurants will lose $3.4 billion between July 2020 and December 2021. One of the world’s largest airport retailers, Dubai Duty Free, shared that its 2020 revenue tumbled 65% to $67 million after earning a record $2 billion the year prior.
Now these airport businesses are beginning to see glimmers of hope. Though passenger volumes in airports are still low, they recently hit the highest levels seen in a year. Airport shops and restaurants will also be receiving $800 million in assistance as part of the $1.9 trillion COVID-19 stimulus bill.
Looking Ahead
An important name in the airport retail industry is Dufry. The Swiss company operates over 2,300 duty free stores in airports and other locations around the world. It also owns the ubiquitous Hudson News airport stores.
During 2020, the company’s revenue from its airport stores sank 72%. But Dufry’s leadership believes that passenger volumes will increase in the coming months as more people receive COVID-19 vaccinations, and that airport retail will continue to recover.
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