March 2020 Travel Retail Market Update
We stand with you as our industry is brought to its knees.
Who could have anticipated the extent of our global crisis and the extenuating impact on travel retail? We are dealing with unprecedented challenges in scale and in scope that are changing our world. As the events will continue to unfold we have no choice but to adapt and respond. Last weekend I had to issue layoff notices to all our staff, one of the most difficult tasks in my career so far. The writing in this issue is coming from a place that is raw and honest.
It is a time for solidarity and for applying the best version of humanity to business leadership. With this opportunity to care and to lead we are no longer competitors but peers around the tasks that will support an integral recovery. It is essential to keep focus amid the paradox. On one hand, we have vibrant and capable resources evidenced by strong and continuous growth over many years and on the other hand, we have complete paralysis of the industry due to no flights, no customers, a reeling global economy and unprecedented uncertainty.
Travel Retail can rebound and it will once the building blocks such as airports and airlines receive the necessary boost from governments. There is an order to a successful retail recovery, the immediate building blocks are a combination of 1) lifted travel bans; 2) government support for airports, and 3) government support for airlines.
The US 10B stimulus package for airports is a start in the midst of historic health and economic crisis. Understandably the IAADFS has joined with industry associations to appeal on behalf of vital ancillary stakeholders that are not clearly named in this benefit or are perhaps too far down the priority list at this point.
IATA is also appealing for funding support for airlines during a “most gravest crisis” with a projected $200 billion required to support liquidity based on a three-month travel ban and a modest recovery.
A Call to Action
While the industry most certainly depends on the bigger picture falling into place again, it is absolutely essential for all the players, regardless of size to stand up, dig deep, dust off, lock arms and let passion, diversity and interdependence shine.
The words of Jack Welch come to mind: “Never miss out on an opportunity, like a good recession”. Along with the reasons to grieve, there is also reason to summon leaders in every corner of the industry to ramp up and to engage. Our call is therefore to industry partners, corporations, associations, businesses, peers and individuals who are choosing the latter. Every effort matters.
With our sights set on the industry’s ability to first manage and then rebuild we find ourselves within a most unusual window of opportunity for catching up and for setting the stage and for making things right. This unusual PAUSE button creates space and time for some seismic upgrades to systems and processes that support better efficiencies. At SPARK we are also adapting and applying our strengths where we can contribute now and in the next months. These will be communicated as a SPARK branded promotion in another email and will cover these bullet points:
- Unprecedented B2B offers committed to best price and best service AND best sales outcomes
- Pro bono sales consulting and employee compensation design for interested B2B accounts
- Committed investments into our sales culture and talent assets such as staff and candidates
- Committed investments into our intellectual and intangible assets
- Continued commitment to corporate citizenship through generosity to staff and to our communities
The purpose of this email broadcast is to pass along some industry information. In the face of weaknesses and threats, we are choosing to focus on strengths and opportunities. Yes, I believe in the strength of the Travel Retail Industry and I believe in the opportunity of a recovery followed by continued growth.
All things considered, I am forecasting that the industry will have rebounded to previous levels by the end of 2021 and that the IATA forecast for doubling air passenger numbers will continue to chart a positive PAX trend over the long term. (More detail below). I also believe that borders will be open within three months and travel restrictions lifted by July 2020. I am happy to stand corrected – this projection is really just that, my best guess.
Hopefully, you will find these nuggets helpful in an attempt to work towards shared goals and interests in this highly fragmented and highly regulated and yet highly interdependent industry. Caveat: the links assume that construction and capital projects at airports will continue uninterrupted, articles published prior to the COVID-19 outbreak may no longer reflect the future market patterns, or simply delay the timelines by the period of recovery.
- First: There are rays of hope in the midst of our current situation that there is a foreseeable end to crisis.https://www.goodthingsguy.com/opinion/coronavirus-15-good-news-stories-from-around-the-globe-show-things-do-get-better/
- Second: IATA predicted in 2016 that air passenger volume could grow annually in the range of 2.5% – 3.7% from 3.8B in 2016 to 5.8B – 7.2B in a best-case scenario by 2035. The actual global PAX count for 2019 was 4.54B. Considering the current impact and the anticipated recovery period, these targets will likely be achieved between 2037 – 2040 when the growth trend will be positive.https://www.iata.org/en/pressroom/pr/2016-10-18-02/With the help of substantial government support and barring any other setbacks, the global PAX range of 5.8B – 7.2B is probably achievable in 2037. It can be anticipated that the number of air travellers will continue to grow and travel retail by extension will continue to benefit from a positive PAX trend once we are through the worst of the current situation.
- Third: Substantial capital projects are underway at major airports including additional gates and expanded retail space. For now, construction has remained as an active industry. For example:
YVR – Dufry
Pier D expansion project in the International Terminal. Currently postponed, but anticipated for 2020, there will be eight additional wide-body gates operational in the International Terminal. All these passengers will be going past shop 3 and through shop 1 and past shop 14 before reaching their gates in Pier D. In addition, Dufry YVR will open a new shop in Pier D, estimated at ~ 1,600 sq ft and will include Beauty, Confectionary and Liquor, the setting for the store will be among other high-end retail and unique Food and Beverage concessions. YVR also has the most direct flights to mainland China per week out of any airport in Canada, the US and Europe and is a favoured connection to Asian destinations for Latin America. The peak hours are typically 10 am – 2 pm and the second peak period is 10 pm – 2 am. Brands testing midnight coverage show a positive ROI that far outpaced the Y/Y sales trend during the daytime period. The midnight opportunity cannot be overstated, please ask us for a presentation.
A total of 9.2B of capital projects are on the books for YVR with a projected annual passenger growth rate from 25M currently to 36M in 2035.
Montreal’s Trudeau airport – Duty-Free
About $2.5 billion will be spent in the next five years to add 10 to 15 gates to the airport and the completion for the second phase of an additional 10 – 15 gates is projected for 2030 for a 30-per-cent increase in the airport’s total capacity.
Los Angeles International Airport is poised for an expansion that could add up to two new terminals and nearly two dozen new gates to help handle the influx of travellers headed to the city for the 2028 Olympic Games.
JFK – Duty-Free
The expansion at Terminal 4 is expected to be complete with Delta consolidating its operations in early 2023. The $3.8 billion Terminal 4 project will modernize and expand the existing terminal, adding more than 500,000 sq. ft of retail space and 16 domestic narrow-body gates.
EWR – Duty-Free
Terminal B will be replaced by Terminal Two, which is in the middle of a $35 million design phase and a projected completion in 2022. The expansions will host a total of 33 gates (which can be expanded to 45) and will encompass as much as 1 million square feet.
The old terminal will be replaced with Terminal One, a gleaming, 1-million-square-foot $2.7B building just south of Terminal A is expected to open in two phases in late 2021 and late 2022.
EWR expansions include a walk through Duty-Free Shop projected to open in 2021 in the current Terminal C to substantially expand the current Dufry footprint.
This long-term project, with an estimated completion date of 2024, is designed to create space for new dining and retail businesses throughout the airport.
Toronto Pearson International Airport – YYZ
Toronto Pearson serves 49.5M passengers and forecasts indicate 85M passengers annually by 2037 Pier G is required to provide additional transborder capacity.
Toronto Pearson is Canada’s largest airport and the most internationally connected airport in North America according to OAG.
Fourth: Buying trends:
Makeup – the global facial makeup market is expected to rise from approx. 9B in 2018 to 14.33B in 2026.
Confectionary – ranks highest among TR impulse purchases:
Luxury – Chinese luxury spending is expected to double to 1.2 Trillion renminbi by 2025, that’s 65% of growth in the market globally.
Matching Strengths with Opportunities
In light of the many debilitating aspects of the COVID-19 outbreak and in full respect to those who are affected in a profound measure, we applaud the continued action to reach out for help and also to offer support. We are in this together! Our purpose is to continue in kindness and with practical help that supports our neighbours, our peers and our front line workers.
Equally, it is essential to give voice to our values that encourage hope and that mobilize and that rally skills around a common objective. This objective is to defend our shared workplaces and thereby offer support to the economy. This is a season for the balanced approach, namely to care and to lead.
Among the most pressing opportunities when flights resume and stores open, from our perspective, is the timing for a modernized sales approach, sales training, sales coverage, sales literacy and sales sophistication that is better matched to the globalized consumer, who is at the centre of all we do. SPARK is committed to elevating the sales profession, to hold a magnifying glass over that moment in the value chain where the brand engages the customer in an unforgettable sales moment. This is the space that we want to support and educate and elevate.
Thank you for the opportunity to collaborate, if you know of others who might benefit from these Market Updates, then please pass the information along. With the IAADFS cancelled in 2020, we are actively working with brands and retailers on one, our office is open and video calls are working well. Thank you for your trust over the past nine years. We owe it to all of you to grow and to give back as best as we know-how, it is indeed my passion each day. Steve Faber gives words to his passion in the book titled: Love is just damn good business. He defines it as: “Doing what you love in the service of people who love what you do”. I think that pretty much sums up our focus at SPARK when we think of candidates, staff, brands and retailers. We really just want to be a partner in creating this joy and this meaning.
Fragrance Beauty Advisor – English / Mandarin PT
We always enjoy recruiting through our network. Perhaps you or someone you know is interested in a temporary fragrance Beauty Advisor position at WDF YVR from April 3rd to June 7th. This opportunity is suited for someone with beauty/fragrance
2022 Summit of the Americas
Join SPARK at the 2022 Summit of the Americas. The Summit of the Americas is the International Association of Airport and Duty Free Stores annual show and will return as an in-person event! The International Association of Airport Duty
Ready for a Sales & Marketing challenge in US airports?
New Opportunities in Travel Retail! Are you ready for a Sales & Marketing challenge in US airports? SPARK is pleased to promote these exciting positions in Travel Retail at the following locations: Sales Promoter - Newark Liberty Airport, NJ
A powerful and poignant contribution to Travel Retail United humanitarian fund for Ukraine
For a cause that is so near and dear to SPARK, we wanted to share coverage by The Moodie Davitt report on our recent donation to the Travel Retail United*, the humanitarian fundraising project
CleanCo Campaign Success
Great coverage by Mark Lane of the Moodie Davitt Report about our participation in a campaign for emerging UK no/lo spirit brand CleanCo in United Airlines Club lounges across four US airports. What an
Fragrance Beauty Advisor – English / Mandarin PT
We always enjoy recruiting through our network. Perhaps you or someone you know is interested in a temporary fragrance Beauty Advisor position at WDF YVR from April 3rd to June 7th. This opportunity is
2022 Summit of the Americas
Join SPARK at the 2022 Summit of the Americas. The Summit of the Americas is the International Association of Airport and Duty Free Stores annual show and will return as an in-person event! The
Ready for a Sales & Marketing challenge in US airports?
New Opportunities in Travel Retail! Are you ready for a Sales & Marketing challenge in US airports? SPARK is pleased to promote these exciting positions in Travel Retail at the following locations: Sales Promoter
Join SPARK at the Virtual Travel Retail Expo October 11-15
The Virtual Travel Retail Expo is a pioneering virtual trade show and symposium designed to both mirror and enhance a real conference and exhibition. Entering its second year, the expo has already established itself
Virtual Summit of the Americas Summary
Virtual Summit of the Americas Summary For a comprehensive recap of the Virtual Summit of the Americas, grab a coffee and a comfy chair and get ready to scroll in every direction. Here are some of our favourite sessions that
SPARK at the Virtual Summit of Americas
SPARK at the Virtual SUMMIT OF AMERICAS While our current team of staff is the smallest it has been in nine years, we are hugely encouraged by the industry recognition in the past year. Among
If ever there was a time to collaborate and align our strengths, it is now.
“If ever there was a time to collaborate and align our strengths, it is now” – SPARK President Heidi Van Roon sounds rallying call ahead of Summit of the Americas by Martin Moodie [email protected]
Turning a Page in the History Books
“Turning a page in the history books” – Heidi Van Roon on elevating the sales profession to a new level By Colleen Morgan [email protected] Source: ©The Moodie Davitt Report 30 March 2021 “The time
Sparking a New Airport Retail Staffing Solution for Maximising Sales
Heidi Van Roon on sparking a new airport retail staffing solution for maximizing sales By Mark Lane: [email protected] Source: ©The Moodie Davitt Report 18 March 2021 Spark Group of Companies has unveiled a bold
SPARK shortlisted for the 2021 DFNI Americas Awards Team of the Year
We are delighted to announce that SPARK has been shortlisted for the 2021 DFNI Americas Awards Team of the Year category. Jessie, Sabrina, Agnes, Candy, Maggie, Shannon, Holly, Fanni, Jenny and Anne have all been selected
The New Brand Partner Program
Brand Partner Program We are pleased to introduce the Brand Partner Program which is quickly gaining attention on social media and in the Travel Retail publications serving North America. This program essentially morphs the typical Brand
Virtual Summit of the Americas
How can the Travel Retail Industry begin to recover from the most complex crisis in history? These and many other questions will be covered at the upcoming Virtual Summit of the Americas from April 5-9, 2021.
Stars of 2020
Coverage from the Moodie Davitt Report: Stars of 2020: Heidi Van Roon’s retail heroines Spark hope amid the gloom of COVID-19: Continuing our Stars of 2020 series, we see how the brand ambassadors trained for airport retail by the SPARK Group of Companies and their leader have kept smiling behind the mask, in this most challenging of years.
Brands and Retail Theatre: A Bigger or Lesser Choice?
Watch the webinar hosted by Peter Marshall, TRUnblocked and our own Heidi Van Roon discuss airport and travel retail.
Adapting The Front Line Team for the Retail Revolution
The roles of all customer-facing staff have become more important than ever. Market shifts that once spanned a decade have happened in six short months. The retail industry, and particularly luxury travel retail is undergoing an unprecedented revolution and we are at the very beginning of it. It is a time for retailers and brands to adapt to every customer-facing function. With retailers restructuring, the onus will be on brands to ensure a people-positive experience for their customers.
Future Airports: From Here to Where?
Portland Design, together with the influential travel retail blog trunblocked.com are launching a webinar series – Future Airports: From Here to Where? – to be staged on the 16th September 2020. This event will bring together a remarkable
Purple Cow: Remarkable Brand Power
This month, our very own Heidi Van Roon, Founder & President, the SPARK Group of Companies, is featured on Trunblocked, talking Brand Empowerment.
Airport Update – August 2020
Airport Update – August 2020 Capital investments and airport infrastructure improvements provide vital context for the development of the Travel Retail industry. Airports have come to depend on non-aeronautical revenues and in many cases,
August 2020 Travel Retail Market Update
It is a pleasure to bring you a collection of Canada and USA Travel Retail insights. As our precious industry deals with this unprecedented crisis, we hope the collection informs some of the recovery
June 2020 Travel Retail Market Update
Among the silver linings throughout this industry crisis is the proliferation of excellent publications, it is encouraging to see information sharing from the experts. While aviation has dropped to historically low levels, the industry pulse among passionate leaders continues strong and healthy.
Embracing The Challenge Against The Odds
Here we are, amid an industry crisis that is encountering unprecedented headwinds. In a few short months, the industry has experienced a setback that could not have been anticipated in degree and in kind. Metaphorically speaking, the headwinds are so strong, we need to pedal downhill just to stay on the bike and in the game. Physically, emotionally, socially, and professionally seemingly unsurmountable challenges loom large. Exhaustion, hunger, pain and delays will take their toll.
The Road to Recovery – Virtual Travel Retail Expo
Throughout the live 5-day Virtual Travel Retail Expo 2020, the Symposium Hall and Workshop Rooms will host industry dialogue around the theme ‘Road to Recovery’, exploring how the travel retail channel will (or should) look in the future. The powerful line-up of speakers includes our very own Heidi Van Roon.
Airport Update – June 2020
Airport Update - June 2020 For an interactive Coronavirus Travel Restrictions Map – bookmark this amazing IATA link to see the country by country travel restrictions: In our March Market Update, we included a
How can we accelerate Travel Retail’s recovery?
The rebound of the travel retail industry will need to quickly embrace the increased customer expectation of a seamless, omnichannel experience where the customer determines how they interact with the brand.
SPARK Careers in Travel Retail Virtual Information Session
Travel Retail offers diverse and dynamic career paths in the duty-free areas of airport terminals, cruise ships and international border shops where global retailers and global brands depend on aspiring professionals. SPARK is committed to
Moodie Davitt Virtual Travel Retail Expo
Moodie Davitt Virtual Travel Retail Expo We are happy to announce our participation at the inaugural Moodie Davitt Virtual Travel Retail Expo. The Expo – which takes the form of a ‘live’ 5-day event followed
Airport Update – May 2020
Airport Update - May 2020 With substantial support from the government, most Canadians whose employment is affected by COVID-19 are supported through various initiatives for a lay-off period of up to 16 weeks. We are
Post COVID-19: The Trinity Initiative
A great example of bright minds and voices converging preparing for the post-COVID-19 recovery is the Trinity Initiative. This collaboration is an invitation for airports, retailers and brands to join in a conversation about the new commercial model.
Post COVID-19: The Rebound
On the demand side, the rebound will depend on the economy and customer confidence. Like a drastic plot change, the commercial model is shifting overnight. We are on that first page of a new chapter. What an amazing opportunity that history would award this writing to the members of the industry today.
Post COVID-19: Staff Fundamentals
Investments supporting the people's assets of an organization are the surest guarantee of continued innovation, creativity and newfound success.
Post COVID-19 Consumer Behaviour
To address the topic of post-pandemic consumer behaviour it is imperative to understand the last connecting point so that the line from A to B has purpose and context regardless of industry
May 2020 Travel Retail Market Update
May 2020 Travel Retail Market Update Amid the current COVID-19 crisis we are all the more committed to standing with our peers and advocating for our workplaces by sharing another collection of Market insights. With
Travel Retail Voices – Heidi Van Roon
In Crisis - Travel Retail Voices is a podcast series by The Moodie Davitt Report, one of the UK’s most successful multi-media business-to-business publishers and an indispensable source of reliable and real-time business intelligence on
COVID-19 Summary of Support from the Canadian Government
In light of the current pandemic, I thought to sketch a basic overview of the Government of Canada initiatives for Employees and Employers that are in non-unionized settings. I have also calculated a basic comparison
March 2020 Travel Retail Market Update
March 2020 Travel Retail Market Update We stand with you as our industry is brought to its knees. Who could have anticipated the extent of our global crisis and the extenuating impact on travel retail?
A Word from Our Founder and President
There’s one thing you need to know about me: I love sales and I love people. What motivates me—what motivates everybody at SPARK —is discovering how an exceptional sales organization can create win-win-win outcomes for staff, retailers, brands and customers.