Travel Retail Market Size, Share & Industry Analysis By Product Type (Cosmetic & Fragrances, Wines & Spirit, Confectionery & Fine Foods, Tobacco Products, Fashion & Accessories, and Others), By Sector (Duty Free and Duty Paid), By Sales Channel (Airport & Airline Shops, Seaport & Cruise line Shops, Border Downtown Hotel Shops, Railway Station, and Others), and Regional Forecast, 2024-2032

The travel retail market size was valued at USD 60.72 billion in 2023 and is projected to grow from USD 66.30 billion in 2024 to USD 145.46 billion by 2032, exhibiting a CAGR of 10.32% during the forecast period. Asia Pacific dominated the travel retail market with a market share of 51.% in 2023. Moreover, the travel retail market size in the U.S. reaching an estimated value of USD 14.98 billion by 2032, driven by the increasing international travelers spending on travel retailing products to favor market size growth.

Travel retail businesses offer products in travel environments, such as cruises, airports, and airlines. They provide significant revenue generation opportunities to seaports & airports, and also assist companies in enhancing their brand awareness among international travelers at minimum marketing costs. Furthermore, the rising number of stores in countries across the world signifies the market’s expansion. For instance, in June 2023, Pangaia, a U.K.-based lifestyle product brand, unveiled its retail store in partnership with Lagardère Travel Retail, a French retailer, at Terminal 3 of the Dubai International Airport. At a macro level, the rising popularity of luxury goods in airports, cruise liners, and railway stations will favor the market’s expansion over the forecast timeframe.

The COVID-19 pandemic significantly impacted the market forecast. To minimize the spread of the coronavirus infection, governments across the globe imposed lockdowns and other travel restrictions. This factor lowered the number of air and marine travelers, thereby threatening the market growth rate. For instance, according to Cruise Lines International Association, a U.S.-based trade association, the number of cruise passengers declined by 81% from 29.7 million in 2019 to 5.8 million in 2020.

Travel Retail Market Trends

Rising Preference for Sustainable Duty-Free Products and Online Store Launches to Boost Market Growth

A sizable number of travelers worldwide prefer sustainable duty-free products to minimize their environmental impact. This factor has encouraged prominent industry participants to launch sustainable and eco-friendly stores to attract eco-conscious consumers. For instance, in March 2022, Lagardère Travel Retail, a French company, introduced its Aelia Duty-Free shop at the Geneva International Airport, Switzerland. The new store is eco-conscious and sustainable in aspects including furnishing, materials, and products.

In addition to this, the rising trend of selling products online to accelerate sales revenues will likely increase the travel retail market share in the future. For instance, in July 2023, Lotte Duty-Free, a South Korea-based retailer, introduced an online liquor store offering products, such as brandy, wine, and Cognac, including limited edition items from more than 100 brands.

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Travel Retail Market Growth Factors

Rising Number of International Travelers to Drive Market Expansion

The increasing number of domestic and international travelers will drive the market growth over the forecast period. For instance, according to VisitBritain, a British Tourist Authority and non-departmental public body, the number of visits to the U.K. is expected to be 39.5 million in 2024, a 5% increase from the visits in 2023 (37.8 million).

Additionally, the rapidly evolving tourism industry of various countries across the globe will support the market’s expansion. For instance, according to the World Travel & Tourism Council, a U.K.-based forum, in 2022, the travel & tourism industry in the U.S. increased by 16% to USD 2 trillion compared to 2021.

Launch of Promotional Campaigns by Major Players to Trigger Product Sales

Recent years have witnessed prominent industry participants launching promotional campaigns and providing discounts and offers to encourage consumers to purchase duty-free products. In addition, they focus on offering high-quality, privately labelled products to attract higher-income travelers and generate revenue streams. These factors are expected to boost the product sales through stores in the future. For instance, in December 2023, Dubai Duty-Free, a company managing Dubai International Airport’s duty-free operations, announced various discounts, offers, and gift cards on its range of products under a promotional activity marking its 40th anniversary.

RESTRAINING FACTORS

High Product Pricing and Currency Fluctuations to Impede Travel Retail Market Growth

Businesses prioritize providing high-quality products from internationally acclaimed and well-renowned brands across the globe, including Gucci, Chanel, Burberry, Dior, Louis Vuitton, and Versace. The high cost of these products limits their sales among lower-income groups and can impede the market’s expansion. Furthermore, currency exchange fluctuations due to various political, economic, and market factors such as inflation, interest rates, and recession can negatively influence the travel retail market growth.

Travel Retail Market Segmentation Analysis

By Product Type Analysis

Increasing Demand for Cosmetics and Fragrances Among Females and Millennials Led Their Sales

Based on product type, the market is segmented into cosmetics & fragrances, wines & spirits, confectionery & fine foods, tobacco products, fashion & accessories, and others.

The cosmetic & fragrances segment dominated the market share in 2023 due to the growing interest, particularly among females and millennials in internationally acclaimed beauty and perfume brands that are difficult to find in their native locations. In addition, the tax-free pricing of perfumes increases their demand as a gifting item among travelers. Moreover, the retailers showcase multiple brands and product types under one roof, providing travelers with more options and making the purchase easy.

The wines & spirit segment emerged as the second leading segment in 2023. International liquor brands, such as 'Macallan (The Macallan Global Boutiques) and Dalmore (Dalmore Store) emphasize selling products through airport shops and cruise lines to increase their sales, thereby contributing to the wines & spirits segment’s growth.

Furthermore, the fashion & accessories segment is likely to achieve substantial growth during the forecast timeline as fashion products are quite popular among celebrities and sportspersons.

The growing popularity of innovative e-cigarettes will increase their sales through airports and cruise shops, driving the tobacco products segment’s revenue. However, the smoking-related prohibitory rules imposed by airlines and cruises can limit the demand for tobacco products among travelers.

The increasing launch of travel-exclusive collections by confectionery and fine food brands will provide growth opportunities for the confectionery & fine foods segment. For instance, in November 2023, Mondelez World Travel Retail, a U.S.-based confectionery company, introduced its travel collection, including its brands, such as Toblerone, Cadbury, Oreo, and Milka in various flavors. The collection was launched across airports in New Zealand, Australia, Greece, the U.S., Germany, Istanbul, and India.

Furthermore, the others segment includes fine arts and electronic items. The availability of a wide range of these products from various brands at these stores is expected to increase their sales in the coming years.

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By Sector Analysis

Cost Efficiency of Duty-Free Products to Drive Their Sales

Based on sector, the market is categorized into duty-free and duty-paid.

The duty-free segment will likely dominate the market throughout the forecast timeframe. Globally acclaimed cosmetic brands, including L'Oréal and Estee Lauder Inc., emphasize selling their products through duty-free shops to boost sales. In addition, the rising number of international travelers and their demand for duty free products will accelerate the segment’s revenue.

The duty paid segment is expected to grow at a strong CAGR over the forecast period. Furthermore, key players are prioritizing expanding their business by launching new duty-paid stores at key locations, thereby favoring the segment’s growth. For instance, in July 2022, Dufry, a Switzerland-based retailer, announced plans to strengthen its South American business by opening new stores, including three duty-paid shops at the Belo Horizonte International Airport.

By Sales Channel Analysis

Airports & Airline Shops Became Major Sales Channels Due to Availability of Wide Variety of Products

Based on sales channel/distribution channel, the market is segmented into airport & airline shops, seaport & cruise line shops, border downtown hotel shops, railway stations, and others.

The airport & airline shops segment dominated the market in 2023, backed by the provision of a wide variety of products, including liquor and cosmetics from several international and niche brands by airport retailers. Moreover, the rising in-flight Wi-Fi trend offers online shopping opportunities to air passengers, thereby increasing the segment’s growth.

Railway station & others segment emerged as the second leading segment in 2023. Government initiatives to increase passenger traffic at railways will likely create growth opportunities for the railway station segment. For instance, in June 2023, Ashwini Vaishnaw, minister of the Indian railways, announced plans to increase passenger traffic to 11 billion a year by eliminating waiting tickets.

The seaport & cruise line shops segment will likely grow rapidly in the coming years. The surging number of travelers through sea routes will benefit the seaport & cruise line shops segment. For instance, according to Cruise Lines International (CLIA), 28 million individuals traveled on ships and cruises in 2018; this figure was expected to cross the 30 million mark in 2019. In addition, the rising trend of purchasing fragrances and chocolates as gift items from border downtown hotel shops will increase the product’s sales from these channels in the future. The border downtown & hotel shops segment is forecast to witness strong growth in the forthcoming years.

REGIONAL ANALYSIS

The market is studied across North America, Asia Pacific, Europe, South America, and the Middle East & Africa.

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Asia Pacific dominated the global market in 2023 and has benefitted from the increasing spending of domestic and international travelers on duty-free products, notably in countries, such as China and South Korea. The China duty free and duty paid market has recovered considerably from the negative influence of the COVID-19 pandemic, with increasing footfall across airports. Furthermore, travel companies, including MakeMyTrip and Yatra providing holiday packages, including hotel reservations and airline & rail tickets, will favor the regional market’s expansion.

Recent years have witnessed retailers collaborating with airports in Asia Pacific countries to expand their operations in the region. For instance, in December 2023, Kansai Airports Retail & Services, operating Kansai Airports Group and managing three airports across Kansai, Japan, collaborated with Lagardère Travel Retail, a French retailer, to supply products to the new duty-free shop at Terminal 1, Kansai International Airport.

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As the second leading regional market, Europe is witnessing robust growth backed by the growing development of tourism-related infrastructural settings, such as hotels, restaurants, and amusement parks across countries including the U.K, France, and Spain. This move will likely increase travel to these countries in the coming years. For instance, in July 2023, Wyndham Hotels & Resorts, a U.S.-based hotel company, announced plans to launch its Super 8 by Wyndham in the U.K. The new 41-room hotel will provide accommodation to travelers around the North Wales and Greater Manchester areas of the country.

Increasing number of travelers to the U.S. will support the North America travel retail market growth. For instance, as per the International Trade Administration, a U.S.-based government agency, in July 2022, the number of foreign visitors to the country increased by 160.8% compared to July 2021.

The growing consumer interest in travel and duty-free shopping will provide growth opportunities to the South American market in the coming years. Moreover, market players, such as Lagardere Travel Retail and Dubai Duty Free, operating in the Middle East and African countries, provide a wide range of duty-free and duty-paid products, and will contribute to the regional market’s expansion.

List of Key Companies in Travel Retail Market

Key Market Players to Focus On Opening Stores With Advance Features to Gain Competitive Advantage

Key industry participants are adopting various strategies, such as store launches, product launches, and introduction of promotional discounts & offers to accelerate their product’s sales. They are also opening stores featuring advanced technologies to increase the customer base for travel retail, enhance consumer engagement, and gain a competitive advantage. For instance, in April 2023, Lagardère Travel Retail, a French retailer, launched its new store near gate 24, Hong Kong International Airport. The new autonomous shop features computer vision technology and an AI system assisting travelers in buying products without waiting for checkout.

List of Key Companies:

• Lagardere Travel Retail (France)


• Dufry AG (Switzerland)


• King Power International Group (Thailand)


• Aer Rianta International (Ireland)


• Delhi Duty Free Services Pvt. Ltd. (DDFS) (India)


• Lotte Duty Free (South Korea)


• Gebr. Heinemann SE & Co. KG (Germany)


• China Duty Free Group Co., Ltd. (China)


• Abu Dhabi Duty Free (UAE)


• DFS Group Ltd. (France)

KEY INDUSTRY DEVELOPMENTS:

• November 2023: Lagardère Travel Retail, a French company, announced plans to open three new stores after winning the electronics tender at the Frankfurt Airport. The new Tech2go shops in Terminal 1, covering a 200 sq. m. area, will offer electronic products.


• July 2023: Coty Travel Retail Europe, the European travel retail subsidiary of beauty brand Coty, collaborated with Dufry, a Switzerland-based retailer, to introduce Burberry Goddess Eau De Parfum. The fragrance was launched by Burberry, a U.K.-based luxury brand, at the London Heathrow airport.


• June 2023: Ritter Sport, a German chocolate brand, announced plans to launch Mini Rainbow Crunchies Tower, its limited edition product, exclusively through channels with Dufry, a Switzerland-based retailer.


• January 2023: Lotte Duty-Free, a South Korean company, opened a store for NONFICTION, a Korean beauty brand. To mark the launch, the company offered consumers free goods through both offline and online channels when purchasing NONFICTION products.


• January 2023: Lagardère Travel Retail Belgium and Atos, a French IT service and consulting company, partnered to launch an automated duty-free point of sales at the Brussels Airport. The companies launched the automated POS to offer travelers a new and unique travelling experience.

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The report provides a detailed analysis of the market and focuses on key aspects, such as leading companies, product types, sectors, and sales channels. Besides, it offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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