Travel Retail Market Size, Share, Opportunities, And Trends By Product Type (Wine and Spirits, Tobacco, Fragrance and Cosmetics, Food and Confectionary, Others), By Sector (Duty-Free, Duty Paid), By Distribution Channel (Airport and Airlines, Cruise Liner, Railways, Others), And By Geography - Forecasts From 2024 To 2029

The travel retail market is anticipated to expand at a high CAGR over the forecast period.

The travel retail market, a vibrant and growing segment of the wider retail business, is defined by the selling of products and services to consumers at various travel hubs such as airports, cruise terminals, and duty-free stores. Travel retail has become a strategic arena for brands seeking to establish a global presence and capitalize on the diverse, cosmopolitan clientele frequenting these locations. This is fueled by the global surge in international travel, rising disposable incomes, and the constant evolution of consumer preferences.

The travel retail industry continues to change, driven by factors such as expanding airport infrastructure, creative retail ideas, and the rising convergence of e-commerce and traditional brick-and-mortar goods, with an emphasis on giving convenience, exclusivity, and duty-free benefits.

Introduction:

Travel retail is the sale of products and services to foreign passengers while they are in transit. The transaction is typically performed in travel environments such as airports or seaports, where the buyer is required to produce proof of nationality or travel to get entrance to the commercial area. The retail stores accept payments that include all applicable local and national taxes and excise levies. Travel retail is also offered in hotels, border ships, international flights, ferries, cruise ships, and other marine vessels operating in foreign seas. Beauty and personal care goods, fragrances, premium alcohols, tobacco, food and beverages, fashion accessories, and electronics are some of the products usually accessible through this retail. Significant expansion in the travel and tourism sector throughout the world is one of the primary drivers driving the market's favourable outlook. Travel retail and duty-free outlets are key sources of non-aeronautical revenue for airports since people increasingly want to purchase expensive and opulent things while travelling. By this, the growing preference for luxury wines and spirits among foreign tourists is propelling market expansion.

Furthermore, the introduction of e-commerce travel retailing solutions is boosting industry growth. Retailers are increasingly providing their products through websites and smartphone apps, allowing customers to pre-order items and quickly pick them up when they arrive. Various technology improvements, such as the introduction of touch screens and interactive retail kiosks, are also contributing to the market growth. These self-service kiosks may interact with passengers and offer a unified ordering and payment option. Other factors, such as rising consumer spending power and the implementation of favourable government policies to promote international travel, particularly in developing nations, are expected to propel the industry forward.

Market Drivers:

• Growing global tourism:

The growing trend in worldwide travel is a key driver for the travel retail business. As more people travel internationally for both business and pleasure, the need for retail services at airports, cruise terminals, and other travel hubs rises. Global travel is increasing due to causes such as increased prosperity, expanding middle-class populations, and easier access to varied places. This increase in travellers generates a sizable customer base with a proclivity for impulse and discretionary buying, making travel retail an important component of the entire retail environment. The sector benefits from the natural link between increasing travel activity and improved customer involvement in retail experiences.

• Expanding airport infrastructure:

Airport infrastructure growth is a critical market driver for the travel retail business. Global expenditures in renovating and expanding airports are resulting in bigger, more sophisticated retail areas. These renovated facilities not only support an increasing number of tourists but also give businesses more possibilities to present a varied selection of items. Airports with larger and more contemporary premises may attract a greater range of companies, offer a larger assortment of items, and create a more interesting retail atmosphere. As a result, consumer spending increases, adding to the overall expansion and vibrancy of the travel retail business.

• Duty-free shopping:

Duty-free shopping is important in the travel retail sector because it influences customer behaviour with its tax-free attraction. Travellers are lured to make purchases that would be more expensive or unavailable in their home countries by the chance of getting items at cheaper rates due to waived customs and taxes. The allure of duty-free products is inextricably linked to government rules and laws governing duty-free allowances, which shape the allure of travel retail locations. Duty-free shopping, as a crucial market driver, not only increases expenditure but also greatly adds to the general competitiveness and desirability of travel retail venues throughout the world.

• Brand presence:

Airports and other major transportation hubs offer key venues for firms to present their wares to a varied, multinational audience of prospective buyers. Brands may capitalize on the significant foot traffic connected with travel by obtaining a prominent presence in these places, garnering the attention of both leisure and business visitors. This exposure not only increases sales but also helps the overall brand image and loyalty since customers frequently identify the company with great travel experiences.

Products offered by key companies:

• Aberfeldy Madeira Cask 16 Years Old 70CL, Delhi Duty-Free Services Private Limited:  Aberfeldy Madeira Cask 16 Years Old, a premium whiskey with a unique and refined flavour, is proudly presented by Delhi Duty-Free Services Private Limited. This 70CL bottle exemplifies elegance and workmanship, having aged in Madeira barrels for 16 years, providing a distinct and rich taste character. This whiskey has a smooth and velvety texture with aromas of honey, fruit, and a trace of wood, making for a lovely drinking experience.

Prominent growth is projected in the fragrance and cosmetics sector under the product type segment

The fragrance and cosmetics category is projected to emerge as the dominant force in the travel retail industry in the next years. This is owing to females' and millennials' growing interest in internationally famous brands that are not widely available in their home areas. The attraction of tax-free fragrances and high-fashion items drives this sector's growth even further, making these products appealing as accessories without the burden of import prices. Travel retail stores distinguish themselves by bringing together a varied range of collections and brands under one roof, providing travellers with a simple shopping experience. The existence of well-known cosmetics and fragrance brands with customer-friendly business strategies broadens the appeal to a diverse client base.

Furthermore, shops throughout the travel retail landscape are introducing customer-friendly regulations for several items, which is helping to expand the industry. The mix of unique international brands, tax breaks, and customer-centric policies places the fragrance and cosmetics area as the forerunner in setting the future trajectory of the travel retail business.

The Asia Pacific region is expected to hold a significant share of the travel retail market:

The Asia Pacific area is expected to grow significantly in the travel retail industry in the future years, owing to significant expenditure on duty-free items by both domestic and international visitors in important nations such as China, India, and South Korea. Given this brisk consumer activity, the area has risen to the top of the worldwide duty-free retail business.

The rise in popularity of low-cost travel tours offered by well-known firms such as MakeMyTrip and Yatra has played an important influence in increasing client traffic rates for booking services. This development not only increases the profitability of travel operators but also opens up new growth opportunities. The Asia Pacific area's strategic focus on catering to passengers' diversified demands, along with the seamless integration of technology into travel services, puts the region as a trailblazer in the shifting landscape of travel retail. The convergence of these variables highlights the region's positive trajectory, positioning it as an attractive leader in the volatile and competitive travel retail sector.

Key developments:

• Lagardère Travel Retail Belgium and Atos (a French IT service and consultancy business) collaborated in January 2023 to develop an automated Duty-Free point of sale at Brussels Airport. The firms established the automated POS to provide tourists with a novel and memorable travel experience.

Segmentation:

• By Product Type
  • Wine and Spirits
  • Tobacco
  • Fragrance and Cosmetics
  • Food and Confectionary
  • Others
• By Sector
  • Duty-Free
  • Duty Paid
• By Distribution Channel
  • Airport and Airlines
  • Cruise Liner
  • Railways
  • Others
• By Geography
  • North America
    • United States
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • United Kingdom
    • Germany
    • France
    • Italy
    • Spain
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • UAE
    • Others
  • Asia Pacific
    • Japan
    • China
    • India
    • South Korea
    • Taiwan
    • Thailand
    • Indonesia
    • Others

1. INTRODUCTION

1.1. Market Overview

1.2. Market Definition

1.3. Scope of the Study

1.4. Market Segmentation

1.5. Currency

1.6. Assumptions

1.7. Base, and Forecast Years Timeline

2. RESEARCH METHODOLOGY  

2.1. Research Process

2.2. Research Data

3. EXECUTIVE SUMMARY

3.1. Key Findings

4. MARKET DYNAMICS

4.1. Market Drivers

4.2. Market Restraints

4.3. Porter’s Five Forces Analysis

4.3.1. Bargaining Power of Suppliers

4.3.2. Bargaining Power of Buyers

4.3.3. Threat of New Entrants

4.3.4. Threat of Substitutes

4.3.5. Competitive Rivalry in the Industry

4.4. Industry Value Chain Analysis

5. TRAVEL RETAIL MARKET BY PRODUCT TYPE 

5.1. Introduction

5.2. Wine and Spirits

5.3. Tobacco

5.4. Fragrance and Cosmetics

5.5. Food and Confectionary

5.6. Others

6. TRAVEL RETAIL MARKET BY SECTOR

6.1. Introduction

6.2. Duty Free

6.3. Duty Paid

7. TRAVEL RETAIL MARKET BY DISTRIBUTION CHANNEL

7.1. Introduction

7.2. Airport and Airlines

7.3. Cruise Liner

7.4. Railways

7.5. Others

8. TRAVEL RETAIL MARKET BY GEOGRAPHY

8.1. Introduction

8.2. North America

8.2.1. United States

8.2.2. Canada

8.2.3. Mexico

8.3. South America

8.3.1. Brazil

8.3.2. Argentina

8.3.3. Others

8.4. Europe

8.4.1. United Kingdom

8.4.2. Germany

8.4.3. France

8.4.4. Italy

8.4.5. Spain

8.4.6. Others

8.5. Middle East and Africa

8.5.1. Saudi Arabia

8.5.2. UAE

8.5.3. Others

8.6. Asia Pacific

8.6.1. Japan

8.6.2. China

8.6.3. India

8.6.4. South Korea

8.6.5. Taiwan

8.6.6. Thailand

8.6.7. Indonesia

8.6.8. Others

9. COMPETITIVE ENVIRONMENT AND ANALYSIS

9.1. Major Players and Strategy Analysis

9.2. Emerging Players and Market Lucrativeness

9.3. Mergers, Acquisitions, Agreements, and Collaborations

10. COMPANY PROFILES

10.1. Lagardère Travel Retail

10.2. Avolta

10.3. KING POWER CORPORATION.

10.4. LOTTEE DUTY FREE

10.5. Delhi Duty-Free Services Private Limited

10.6. Cochin Duty Free

10.7. Flemingo.

10.8. Shill Duty Free

10.9. LVMH Group

Lagardère Travel Retail

Avolta

KING POWER CORPORATION.

LOTTEE DUTY FREE

Delhi Duty-Free Services Private Limited

Cochin Duty Free

Flemingo.

Shill Duty Free

LVMH Group