Why Your Airport May No Longer Resemble a Luxury Mall (2024)

Feb. 14—The airport luxury boutique became a staple of the pre-pandemic travel boom. Now it may be heading for the departure gate.

In 2021, air passenger numbers globally totaled 4.6 billion, only half the 2019 level, according to data from theAirports Council International(ACL).

Airlines aren't the only ones feeling the pain.Switzerland-based Dufry, one of the world's biggest duty-free businesses, said in its latest quarterly results that sales are still down 44% compared with the same period of 2019.

Based on numbers for the first nine months,London'sHeathrow Airportin 2021 was on track to make just one-quarter of the revenue from retail concessions it did two years earlier.

Before the pandemic, travel retail sales were growing around 8% a year, creating competition to rent space in airports. Luxury brands were particularly eager bidders and airport stores came to account for 6% of global luxury sales, according toBain & Companydata.

The likes of Louis Vuiton and Hermès paid top dollar to get exposure to wealthy shoppers as they passed through airports, particularly Chinese tourists.

In the busiest hubs, cosmetics and luxury companies could expect to hand over 40% to 50% of their sales as rent, according toJack MacGowan, former chief executive ofAer Rianta, an Irish company that pioneered the concept of duty-free retail.

Effective rents for downtown stores are much lower, typically 10% to 30% of sales, saysMr. MacGowan.

Leasing out shop space helped airport operators become less reliant on aeronautical fees: Retail concessions generated on average 30% of airports' total revenue before the pandemic, according to the ACI.

Luxury brands were important tenants as they generated high sales per square foot, an important metric in airports, where space is tight.

Strip out food and drink sales and only around 20% of passengers make a purchase on their way to the boarding gate, according to Bain.

Despite this low number, airports were able to boost their retail revenues by filling terminals with the most expensive designer handbags and clothing.

Airports badly need retail sales to recover as they mend their finances.

By the end of 2022, the world's airports will have lost an estimated $310 billion related to the pandemic, according to the ACI.

In many markets, operators' ability to generate more aeronautical revenue is limited as regulations cap how much they can increase the landing fees they charge airlines.

For the moment, passengers are showing up at the wrong airports to drive a recovery in travel retail.

Domestic travel inside countries is bouncing back more quickly and reached 58.5% of pre-pandemic levels in 2021. International travel lagged at just 38.7% of 2019 levels.

Long-haul airports likeParis Charles de Gaulle and Dubai Internationalthat invested heavily in expensive retail fitouts to lure top brands are among the most empty.

Even when international passenger traffic does come back, it will be harder for airports to attract luxury brands as tenants.

The mix of travelers is expected to change.

By 2025, more than half of global passengers could be younger and have less money to spend, according to a Bain report.

The share of high spenders passing through airports — particularly business travelers and Chinese tourists, who are both important buyers of luxury goods — would fall by more than 5 percentage points in this scenario.

Airports will have to add less expensive brands and build e-commerce businesses to offset lower demand for luxury goods.

Chinese shoppers will probably never buy as much in overseas airports as they did before Covid-19.

China'sgovernment has encouraged consumers to spend at home by tripling their domestic duty-free allowances.

That benefits local players likeChina Tourism Group Duty Free, now the world's number one duty-free retailer by sales. Its stock has more than doubled since the start of 2020, while Dufry's has almost halved.

Luxury brands will prioritize opening stores in mainlandChinain response to this shift. They are also beefing up their e-commerce businesses.

Higher digital sales are proving lucrative for major brands.

LVMH Moët Hennessy Louis Vuitton, the world's biggest luxury company, recently reported record operating profit margins for 2021, partly because e-commerce has become a bigger part of its business. This channel now offers an alternative to paying sky-high airport rents.

Even with their airport boutiques deserted, most big luxury brands managed to grow their sales during the pandemic.

Travel retail clearly isn't as crucial to the business of selling expensive handbags and watches as it once seemed. Airport terminals that had begun to look like expensive shopping malls need a new plan.

___

(c)2022 the Bangkok Post (Bangkok, Thailand)

Visit the Bangkok Post (Bangkok, Thailand) at www.bangkokpost.com

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Why Your Airport May No Longer Resemble a Luxury Mall (2024)

FAQs

Why are there luxury brands in airports? ›

Luxury brands were important tenants as they generated high sales per square foot, an important metric in airports, where space is tight. Strip out food and drink sales and only around 20% of passengers make a purchase on their way to the boarding gate, according to Bain.

Why do people shop at the airport? ›

While the cost for entry is high--you don't usually need to buy a flight to go shopping--airports can be some of the best places to get luxury goods for a lower price. International travellers have the option of buying duty-free, avoiding the cost of both import and luxury taxes that may apply in their native country.

Is designer stuff cheaper at the airport? ›

Guide To Shopping In Airports. Shopping designer bags like Chanel, Louis Vuitton or Hermes at Airports are usually the cheapest. It's far better than shopping at the retail stores in the cities. However, shopping at Airports has pro's and con's of course.

What is the app that tells you not to get lost at the airport? ›

Download TripIt.

The pro version of the travel app has interactive airport maps for 90 airports worldwide. It will show you the fastest way to your gate and will even tell you how long it will take to get there. "TripIt will map out connections for you," says Meaghan Clawsie, a travel advisor from Austin, Texas.

Are luxury brands more expensive at the airport? ›

Some items tend to be overpriced in airports, particularly leather goods, sunglasses, and sometimes fine watches. The savings you might garner from saving on taxes might be wiped out by the higher price you pay. Understanding what a good price is for the item you're considering can help you make wise purchases.

Why do the poor buy luxury items? ›

And people living in low-income neighborhoods–the ones who are relatively well-off compared to their neighbors–are nevertheless worried that they'll be misperceived as resource-poor. So they purchase expensive and conspicuous goods, to make sure their resources are visible to outsiders.

What sells the most at an airport? ›

Beverages were by far the most popular item, with bottled water ranking as the first through fifth most-sold item.

What are airports looking for? ›

Transportation Security Administration (TSA) screeners at airports check passengers and personal items for dangerous items such as weapons, chemicals and liquids that are not allowed as carry-on items.

Why are some airports cheaper? ›

Cities that have multiple airports often see more deals because airlines aren't just competing in one airport, but in the larger metro area as well. For example, Fort Lauderdale (FLL) and Miami (MIA) compete for flyers—which can help keep costs low at both airports.

Why is everything more expensive at the airport? ›

The reason comes down to business operating costs including rent, commission, and other fees. Therefore, businesses must charge more for their products, including food, in order to generate profit. So, airports themselves are in part responsible for high food prices.

What is the most efficient airport design? ›

A new study from the Air Transport Research Society ranked 206 airports on efficiency. The world's most efficient airport is Hartsfield-Jackson Atlanta International Airport in Georgia. Atlanta's airport has won the award 14 years in a row.

Which airport has the best design? ›

Often known for the best airport designs in the world, the Changi Airport at Singapore designed by the master architect Moshie Safdie is one of the largest transportation hubs in Southeast Asia.

How to skip airline security? ›

Making a reservation in advance is a great way to skip TSA's sometimes exorbitantly long lines. However, if you're flying out of an airport that doesn't have this program, you may instead want to consider enrolling in TSA PreCheck or Clear.

What happens to items left on planes? ›

Regardless, all airlines require a kind of report to be filed by the person whose items are missing. Unclaimed baggage or items left in lost and found usually end up either in charity or in a place for sale. In the United States, one such place is the Unclaimed Baggage Center in Scottsboro, Alabama.

What happens to items left at airport security? ›

TSA makes every effort to reunite passengers with items left behind at the airport checkpoint. Lost and found items retained by TSA for a minimum of thirty (30) days, and if not claimed, are either destroyed, turned over to a state agency for surplus property, or sold by TSA as excess property.

What is the United States most luxurious airport? ›

Washington Dulles International Airport (IAD) is one of the most luxurious private airports in the USA, offering flights to 131 cities around the world. With its convenient location and close proximity to the nation's capital, IAD makes traveling long distances a breeze.

Who spends the most on luxury? ›

South Koreans spend the most in the world on luxury products, according to a report by Morgan Stanley. In 2022, South Koreans spent about $16.8 billion on luxury goods, an increase of 24% from the year before. That's about $325 per person.

Where is the most luxurious airport? ›

Doha Hamad

Hamad International Airport is the international airport for Doha, the capital city of Qatar. The airport has been described as the most architecturally significant terminal complex in the world, as well as being the most luxurious. It is the hub airport for Qatar Airways.

Why rich people buy luxury? ›

For some consumers, a luxury good can go a long way in increasing self-esteem or providing a sense of belonging. A sense of accomplishment is another reason why some people buy luxury goods.

Why do people pay more for luxury? ›

Luxury has a unique potential to fulfill that psychological longing for a sense of accomplishment. In fact, luxury purchases have been shown to oftentimes trigger the release of dopamine, the feel-good hormone. People buy or desire to experience luxury for the purpose of making themselves or others feel good.

Why rich people don t wear expensive? ›

Surely the top billionaires and millionaires of the world could easily spend money on expensive clothes, but they don't. Because they recognize it as a needless expense. After all, wearing designer labels isn't going to add to their success or enhance their work.

Who gets paid the most at an airport? ›

10 high-paying aviation jobs
  • Flight instructor.
  • Terminal manager.
  • Aerospace technician.
  • Aircraft mechanic.
  • Pilot.
  • Test engineer.
  • Airport executive.
  • Aeronautical engineer.
Apr 13, 2023

What is the #1 best airport? ›

1. Singapore Changi Airport: Singapore's Changi Airport, known for its stunning indoor waterfall, is top of Skytrax's 2023 ranking of the world's best airports. 2. Hamad International Airport: Hamad International Airport in Doha, Qatar, is number two on Skytrax's list.

What is the cheapest airport ever sold? ›

A group of international investors has won a bankruptcy auction for an abandoned airport in central Spain with a €10,000 (£7,000) offer - 100,000 times less than it cost to build.

Can TSA see my tampon? ›

Can you see a tampon during an airport body scan? This is a frequently asked question on Google, and if it's something you're worried about, you can breathe a sigh of relief. Airport body scanners can't see inside the body and therefore can't detect a tampon on a TSA female body scan image.

What are the 3 essential features of an airport? ›

Facilities
  • Check-in facilities, including a baggage drop-off.
  • Security clearance gates.
  • Passport control (for some international flights)
  • Gates.
  • Waiting areas.

Why do people wear red at the airport? ›

To be able to wear these kinds of things in a public place where you're going to be seen getting on and off a plane is a measure of extroversion." "The more unusual the color is, the more the person is looking for attention and to be noticed — especially red," Meyers said.

Are small airports better? ›

Flying into smaller airports can be a delight with fewer crowds and less distance to navigate between terminals. On the other hand, they can also come with a side of frustration, with fewer flights options and without the larger staffs major airports benefit from.

Why is it so expensive to fly in America? ›

"In part because of a holdover from (the COVID-19 pandemic), in part because of a labor shortage and in part because you make more money flying fewer airlines each of which is full of people paying higher prices," he said. Labor shortages in particular are taking a toll on the airline industry.

Why are airports losing so many bags? ›

Airports need to keep their operational space clear, so often there are lost-luggage offices or spaces designated to mishandled bags. There, so many bags sit unclaimed and gather dust for months and years, leading some airports to hold auctions where buyers can bid for the items.

Why are big airports cheaper? ›

"Competition is a major factor, with prices often cheaper at big airports with multiple airlines or rival airports nearby. With some airlines seeing some airports as hubs for business [travelers] who are less choosy about higher fares, ticket prices are often more expensive."

Is it cheaper to buy at airport? ›

If a person does go to the airport in an attempt to buy a last-minute plane ticket, they may find the ticket prices to be immensely higher than if they were to book online. Ultimately, there are no advantages to buying tickets directly at the airport.

Are airport items expensive? ›

Many items sold in airports are drastically marked up compared to their outside "street prices" — sometimes by over 200%. Here are 10 overpriced items you should avoid, and some expert-approved tricks on how to save money while traveling.

What is perfect airport look? ›

You wear something comfortable while travelling, even if it is your pyjama or legging and a sweatshirt. That will be your airport look. Being comfortable and travelling is better than being stylish and uncomfortable.

What are the factors affecting airport design? ›

The important physical characteristics of the aircraft affecting airport design are maximum takeoff weight (W), wingspan (A), length (B), tail height (C), wheel base (D), nose to centerline of main gear (E), undercarriage width (1.15 ¥ main gear track, F), and line-of-sight/obstacle-free zone at the nose of the ...

Why is airport design so critical? ›

Airport design works to enhance the travelling experience

”Clear signs and graphics, as well as the decorative patterns of the floor and walls, can make it easier to navigate the terminal building.

Where is the most beautiful airport located? ›

Changi International Airport, Changi, Singapore

The world's only airport butterfly habitat can be found inside Changi Airport's modern steel-and-glass Terminal 3 building.

Which is the best airport in the world now? ›

Here is a look at this year's top ten winners:
  • Singapore Changi Airport.
  • Doha Hamad Airport.
  • Tokyo International Airport.
  • Seoul Incheon Airport.
  • Paris CDG Airport.
  • Istanbul Airport.
  • Munich Airport.
  • Zurich Airport.
Mar 17, 2023

Where is the best place to build an airport? ›

From an aeronautical viewpoint, the basic requirement of an airport is that it have a relatively flat area of land sufficiently large to accommodate the runways and other facilities and that this area be in a locality free from such obstructions to air navigation as mountains and tall buildings.

Do pilots skip security? ›

For instance, the United States has the Known Crew Member (KCM) scheme that sees pilots and flight attendants go through extensive background checks. After this, they can pass through a side door, flash their badge, scan, and be on their way without going through standard security checks. There are numerous rules.

Do seniors need TSA PreCheck? ›

Bonus: If you're 75 or older, TSA usually allows you to go through the security pre-check line, which means you don't have to remove your shoes or separate laptops or liquids from your carry-on.

Do flight attendants skip security? ›

Bottom line. Many people are surprised to learn that pilots and flight attendants can bypass security checkpoints at airports, thanks to the Known Crewmember program.

Why do clothes come off in plane crash? ›

The effect of very high speed wind, or the slipstream, hitting the bodies can easily literally rip the clothing right off.”

Do airlines pay for lost items? ›

Under DOT regulations (for domestic travel) and international treaties (for international travel), airlines are required to compensate passengers if their bags are damaged, delayed, or lost.

Can I bring leftovers in my carry-on? ›

Solid food items (not liquids or gels) can be transported in either your carry-on or checked bags. Liquid or gel food items larger than 3.4 oz are not allowed in carry-on bags and should be placed in your checked bags if possible.

What is the most confiscated item at airports? ›

Most common confiscated items
  • Loose Batteries (must be in your carry-on luggage and in its original sealed packet)
  • Sharp Items (including knives, scissors, pocket knives, and box cutters)
  • Lighters (travelers are permitted to carry one lighter only, any additional will be confiscated)
Nov 27, 2022

Can airport security see everything in your bag? ›

Airport scanners can see detailed images of your luggage contents such as metallic and non metallic objects, but also organic materials. How does it work? Even though the technology behind scanners it is very complex, the process of scanning your body and suitcase is quite simple.

What is the stuff they put on your hands at airport security? ›

The Transportation Security Administration randomly swabs passengers' hands at security checkpoints and airport gates to test them for traces of explosives. The TSA swabs are analyzed for nitroglycerin, nitrates, glycerin, or other chemicals. This was an expansion in 2010 from simply swabbing luggage and other items.

Why are things expensive at the airport? ›

A perceived monopoly isn't the only reason for high food prices at airports. High-priced commercial space rent, supplier price-gouging, staff turnover, and employee parking also play a role. So, we recommend you pack dry snacks with you, see if you have access to lounges, and park at The Parking Spot when you travel.

What is the importance of airport branding? ›

Brand awareness, brand recall and brand reinforcement: Airport Branding offers a conducive environment for brand to both introduce a new product and create brand awareness or to use airport ads for higher brand recall and brand reinforcement that in-turn influence the consumer purchase decisions.

Why do middle class buy luxury items? ›

The price-value bias is another reason why many middle-class people conclude that luxury products are of better quality than non-luxury products. Some people also have an increase in self-esteem after buying luxury brands.

How much more expensive are things at the airport? ›

Many items inside the airport, including phone chargers, food, and gifts, can reportedly be significantly marked up compared to "street prices" — often by 10% or more.

Why is it cheaper to fly out of different airports? ›

Cities that have multiple airports often see more deals because airlines aren't just competing in one airport, but in the larger metro area as well. For example, Fort Lauderdale (FLL) and Miami (MIA) compete for flyers—which can help keep costs low at both airports.

What is the most important factor in the design of airport? ›

The principal determinants of airport layout are the number of runways and their orientation, the shape of the available site, and constraints at the site both on the ground and in the air.

How effective is airport advertising? ›

It validated that elite business decision makers are not only flying, but they are tuned into airport advertising. More than half (56%) of Business Frequent Flyers recalled ads after seeing them in the airport. Additionally, nearly half (49%) took action after noticing an ad at the airport.

What is the most luxurious airport in the US? ›

Washington Dulles International Airport (IAD) is one of the most luxurious private airports in the USA, offering flights to 131 cities around the world. With its convenient location and close proximity to the nation's capital, IAD makes traveling long distances a breeze.

What is the most luxurious way of travel? ›

Private Jets

For those seeking the ultimate private travel experience, a chartered flight will take you to your destination in absolute comfort, convenience, and style. Enjoy flexible scheduling, gourmet food on board, access to luxury destinations, and attentive service every step of your travel.

What is the most luxury airlines? ›

10 most luxurious airlines in the world
  • Qatar Airways.
  • Singapore Airlines.
  • Emirates.
  • Japan Airlines.
  • Cathay Pacific.
  • American Airlines.
  • British Airways.
  • Swiss International Air Lines (SWISS)
Mar 28, 2023

How important are luxury items? ›

A luxury item is not necessary to live, but it is deemed highly desirable within a culture or society. Luxury items tend to be sensitive to a person's income or wealth, meaning that as wealth rises, so do purchases of luxury items.

Why do rich people buy luxury goods? ›

For some consumers, a luxury good can go a long way in increasing self-esteem or providing a sense of belonging. A sense of accomplishment is another reason why some people buy luxury goods.

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