Strolling through the departures terminal at Hong Kong International Airport is a shopaholic’s dream. Gleaming storefronts house luxury designer goods, the latest tech trends, premium luggage and unusual souvenirs. DFS Duty Free tantalizes travelers with high-end cosmetics, perfumes, wines and spirits, and there’s a wide range of dining outlets ready to replenish you after a shopping frenzy. Add in a diverse number of leisure options, and you could almost forget why you’re there in the first place. It’s a phenomenon that’s being replicated at international hubs worldwide.
The relationship between airports and retail is a natural fit; after all, brands have a captive audience of affluent customers with idle time on their hands. Sparks first flew in 1947, when businessman Brendan O’Regan introduced the revolutionary idea of duty-free shopping to Ireland’s Shannon Airport and the concept spread like wildfire.
“What started as a relatively small-scale activity, meeting the immediate needs of travelers, has emerged as both an important aspect of passengers’ travel experience and a major financial contributor to the aviation sectors,” says Colm McLoughlin, executive vice chairman and CEO of Dubai Duty Free. “Without duty free and travel retail revenue, airports would not be able to provide the facilities and services they do.”
A recent study by Credence Research found that the airport retail market was set to grow to $48 billion globally by 2021 – and what retailer could say no to a slice of that pie? “Once passengers step through the security scanner a ‘golden hour’ begins. Most are relatively prosperous; all are briefly at loose ends,” says Saba Tahir, vice president of purchasing at Dubai Duty Free. Meanwhile, Italian sunglasses manufacturer Luxottica calls airport sales “the Formula 1 of retail.”
Emerging in tandem is a trend to introduce more leisure facilities at airports – happy passengers make for happy sales reports. Common themes include a focus on F&B options, lounge facilities, relaxation areas and technology, while more innovative solutions have led to things like Airbrau, an on-site brewery and beer garden in Munich, and a museum of classical paintings in Amsterdam’s Schiphol Airport.
Singapore Changi Airport
Changi Airport needs little introduction, consistently rated as the best airport in the world by our readers. With more than 350 retail outlets, business is booming. Sales at Singapore’s Changi Airport hit a record high of S$2.2 billion ($1.6 billion) in 2015 – an 8 percent growth over the previous year.
“Retail and leisure is part of the airport experience at Changi,” says Teo Chew Hoon, senior vice president, airside concessions of Changi Airport Group. “Passengers can watch a movie, take a stroll in the butterfly garden, swim a couple of laps in the rooftop pool and shop for a wide range of goods.”
The newly opened Terminal 4 has a capacity of 16 million passengers and 183,000 square feet of retail and dining space housing more than 80 outlets. Even more exciting is the highly anticipated debut of Jewel Changi Airport in 2019 – the enormous mixed-use complex has a groundbreaking design, which features an indoor forest and the world’s largest indoor waterfall, and will house nearly a million square feet of retail space.
Sydney Kingsford Airport
Australia’s busiest airport is also the world’s oldest commercial international airport, first opened in 1919. To cope with modern demands and changing traveler needs, it’s in the midst of a multibillion-dollar renovation with passenger experience foremost in mind.
“Today, Sydney Airport is so much more than a facilitator of travel,” says Glyn Williams, general manager retail at Sydney Airport. “There’s a greater emphasis on the overall airport experience.”
The retail strategy is aggressive, with efforts to secure brands that don’t appear in any other Australian airports, or even Australia itself. To that end, a new luxury precinct in Terminal 1 offers global designer brands such as Max Mara, Tiffany & Co and Hugo Boss. Meanwhile, Heinemann Tax & Duty Free has completed work on the world’s largest stand-alone airport duty free store.
Riding the F&B trend, there’s been a focus on food offerings, with celebrity eateries such as The Bistro by Wolfgang Puck, and healthy options like Sumo Salad Green Label. Heineken House has also launched in T1, where customers can sample first-to-market brews.
Hong Kong International Airport
It’s not unusual for locals to head to HKIA solely to visit the cinema. Situated landside in T2 is the biggest IMAX in Hong Kong, showcasing the latest Hollywood blockbusters in both 2D and 3D. Also in T2 is the Green Live Air virtual golf simulator, where you can sharpen your swing on eight courses from The Belfry to St Andrews.
Airside, retail reigns supreme. Luxury international brands from Burberry to Bulgari abound in T1, while more mid-market and local brands are found in T2, from where the majority of low-cost carriers depart. The “I love Hong Kong” zone on Level 7 of the East Hall, has 15 well-known local brands including Shanghai Tang and Disneyland.
Looking to the future, HKIA has announced plans to build Skycity – a massive 7.2-million-square-foot complex development next to Terminal 2 with a hotel, plus retail, dining and entertainment facilities. The project is scheduled to be complete by 2021.
Dubai International Airport
As the busiest airport in the world for international passenger traffic, Dubai is expecting to host to 90 million travelers this year. As a result, the facility has seen major expansions recently.
Terminal 3 opened in 2008 bringing with it a wealth of retail and leisure options including Timeless Spa facilities, a Zen Garden, an airside hotel and two Apple Stores. Further, in early 2016 Concourse D opened to boost capacity accompanied by nine lounges, a range of F&B options and a massive duty-free offering.
Coming up, a major facelift is planned for the 16-year-old Concourse C, further increasing capacity and retail options. In addition, Dubai Duty Free plans to add an additional 870,000 square feet of new retail space in time for the Dubai Expo 2020.
Seoul Incheon Airport
In terms of leisure facilities, Seoul’s Incheon Airport is a clear winner among its rivals, boasting a golf course, spa, indoor ice skating rink, indoor gardens, a museum and even a casino.
Incheon is also a multiple “Best Duty Free in the World” winner in Business Traveler’s Best in Business Travel Awards, with 78 duty-free shops including the popular Lotte Duty Free and Shilla Duty Free. But the airport is not resting on its laurels. Passengers can now reap the rewards of a $4.6 billion expansion plan launched in 2013 to increase passenger handling capacity by 40 percent and renovate the retail offering in Terminal 1.
This is bolstered by a thriving dining scene that includes local favorites such as Meihao, Bon Pi Yang and Sonsoo Bansang as well as the Johnnie Walker House, a new luxury Scotch whisky embassy.
Terminal 2 is scheduled to open in 2017, as phase three of Incheon Airport’s expansion plan to get ready for the 2018 Winter Olympics in Pyeongchang. New concession and retail stores have been promised, along with a number of on-site leisure attractions that include koi ponds, indoor gardens and exhibition areas.
By Clement Huang and Tamsin Cocks
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