Duty-free and travel retail is a global sector that sells goods to overseas travelers. These store sales are tax-free and excise-duty-free as long as the items are sold to travelers who would carry them out of the nation. Duty-free and travel retail are typically visible in airports, but they are also available at border stores, onboard cruise ships and ferries in foreign waters, and onboard planes during international trips.
Duty-free and travel retail are important sources of revenue for the aviation, travel, and tourist industries in the United States. Airports, in particular, are increasingly relying on the commercial income to fund infrastructure development and to assist them to keep airline landing fees as low as possible. Retail is now the major source of non-aeronautical revenue at airports around the world.
What is meant by Duty-free?
Duty-free shopping means the ability of travelers en route to purchase products at retail outlets located in transportation hubs such as airports that are exempt from the country’s tax (duty). Travelers could be on their way or arriving/departing from a specific area. These are retail locations that do not charge patrons any national or local taxes on the items they sell. The jurisdiction has imposed various restrictions on duty-free merchandise.
What is the travel retail market?
Travel retail is a word used to describe purchases conducted in travel environments where customers are required to provide proof of travel in order to enter the commercial area but are subject to taxes and tariffs.
Merchandise, channel, and geography are all used to segment the travel retail market. Perfumes & cosmetics, wine & spirits, cigarettes, electronics, luxury goods, food & confectionery, and catering & others are the main categories in which the market is separated. Because of the early adoption of premium lifestyles, the luxury goods industry in emerging nations has strong development potential, and it is expected to increase steadily in developed regions.
The following are the main advantages for the travel retail market:
- This paper examines the worldwide travel retail market in-depth to discover prospective investment opportunities.
- It outlines present and future travel retail market trends and scenarios in order to estimate the entire market potential and establish a better market presence.
- It goes over the primary drivers, restrictions, and opportunities, as well as a full analysis of their impact.
- To assess the market’s financial competency, a quantitative analysis of the travel retail market share from 2020 to 2028 is highlighted.
- The threat of new entrants, the threat of substitutes, and the strength of buyers and suppliers are all depicted in Porter’s Five Forces model.
Duty-free and Travel Retail Market – Stats and facts
In the year 2020, the global duty-free and travel retail market was estimated to be worth USD 29.89 billion. The rise of the duty-free and travel retail markets is being aided by the increased desire for retail chains that offer luxury and premium brands of various products.
The growing emphasis on digitising the retailing process in order for businesses to optimise revenues may improve market sales. The rise of the duty-free and travel retail markets is being aided by the increased desire for retail chains that offer luxury and premium brands of various products.
Due to an increase in per capita income, consumers in the regions are increasing their trip expenditure, which is expected to drive market growth in the Duty-Free and Travel Retail market over the forecast period of 2021-2026.
Due to rising demand for retail chains that offer luxury and premium brands of various products, the duty-free and travel retail market is expected to rise at a CAGR of more than 7.5 percent from 2021 to 2026.
By 2028, the worldwide travel retail market is estimated to reach $145.0 billion, growing at a CAGR of 14.9 percent over the forecast period. The growth of the travel and tourism industry, especially medical tourism, increases the demand for travel retail services.
Goals and objectives –
The primary goal of the “Duty-Free Travel Retail Market” research is to assist the user in better understanding the market in terms of its definition, division, market potential, trends, and obstacles, as well as the 10 major regions and 50 countries that make up the market.
Duty-free and travel retail are two of the many auxiliary services provided by airlines. The expansion of the scope and volume of ancillary income has become critical to the operations of some low-cost and ultra-low-cost carriers, allowing them to provide lower ticket costs and, as a result, drive overall demand for air travel.
Vendors may be able to attract a big number of customers and obtain significant market share by focusing more on delivering a diversified and wide range of items. Innovative promotional strategies and enticing price offers may aid players in maintaining competition in the duty-free and travel retail markets.
One of the key elements fueling the expansion of the duty-free and travel retail markets is the expanding popularity of the travel industry.
Duty-free and travel retail provide temporary venues that allow end-users to be delighted and indulged with the ambiance and experience of shopping for overseas products following security check-in.
Bottom line –
The rise of the duty-free and travel retail markets is being aided by rising demand from retail chains. That offer luxury and premium brands of various products, several corporations are collaborating with duty-free shops to launch limited-edition or unique products, which is propelling the sector forward.