Plenty to work and hope for, says TFWA president

04 October, 2017

Juul-Mortensen went on to outline how the industry is also at the mercy of the global economy, and within that its impact on currency values and exchange rates. “The global economy today, although recovering, is still uncertain and fragile, with huge variations depending where you look.”

However, the latest World Economic Outlook update in July revised its projection for global growth this year from 3.4% to 3.5%, and holds its projection for 2018 at plus 3.6%. “Overall the broad economic story, as told by the IMF, is that most of the projected global growth will come from stronger activity in emerging markets and developing economies.”

Exchange rate volatility remains the more significant factor to affect the duty free and travel retail business, “very directly and very immediately”. Brazil’s currency is showing remarkable recovery, and the Euro too is gaining strength. The weakness of the UK pound against the US dollar led to a huge increase in the number of US visitors to the UK during the summer and the pound fell to its lowest ever exchange rate against the euro in August.

“The economic backdrop will always feature winners and losers, but as far as air passenger traffic is concerned, the outlook is universally positive.”

ACI predicts 8.1bn passengers this year, representing year-on-year growth of 5.7%, while the first five months of 2017 saw the total of global international passengers increase by 8.8%. In Europe in the same five-month period, growth was 10.4%, and within the global figure there are individual countries generating far higher passenger growth.

Trends in consumer behaviour and attitudes continue to have a huge effect on the fortunes of travel retail, Juul-Mortensen concluded. The millennial is undoubtedly an influential group. But, Juul-Mortensen said, we would be making a mistake if we focused on this group to the exclusion of others.

“The fact is the single fastest-growing group of potential customers is the older baby boomer generation nearing or just into retirement. Globally the population aged 60 and over is growing faster than all younger age groups, and population ageing is occurring throughout the world. The majority of these people are healthier and wealthier than any previous generation of 60 year olds that has ever lived.” Many active, affluent mature people are travelling the world like never before.

Juul-Mortensen then went on to review the success of the TFWA campaign to mark the 70th anniversary of duty free, which has been used by a number of retailers and landlords around the world.

“Through this campaign, we hope to build positive public opinion by conveying messages to travellers and opinion formers about just how much our industry contributes to the world of travel, and to the richer experience of the traveller,” he said.

The next 18 months will see pivotal challenges for the industry, most importantly assuring that the voice of the industry is heard by governments in the UK and Europe as Britain’s departure from the EU takes shape. “Whatever your thoughts on the wisdom of Brexit, it is an opportunity for us to ensure that travellers between the UK and the EU once again enjoy the benefits of shopping duty free. But this is not a given. It requires painstaking work behind the scenes,” he said.





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