The Global Travel Retail Market Projected to Grow at a CAGR of 16.0% and Generate a Revenue of $225,663.8 million by 2031Download Sample Reports Overview
The global travel retail market is predicted to be valued at $225,663.8 million by 2031, surging from $50,717.2 million in 2021, at a noteworthy CAGR of 16.0%.
Impact Analysis of COVID-19 on the Travel Retail Market
The pandemic's stringent lockdowns had a negative effect on the market expansion. The global prohibition on air travel during the most severe pandemic has had an impact on market growth. The COVID-19 epidemic had impacted the brick and mortar sales of travel retail, which caused customers to switch to Internet sales channels to make purchases. However, the need for creative, ergonomic, and high-quality products is projected to rise as a result of shifting consumer behavior. Furthermore, the pandemic's detrimental effects on the tourism industry's performance were already forecasted. International travel limitations and safety precautions began in January 2020. Due to concern of catching COVID-19, domestic and foreign tourists restricted their trips, which decreased the number of domestic and foreign clients for this retail channel. All these factors have negatively affected the travel retail market growth during the pandemic.
However, several initiatives and developments by the governments and major players are helping society to recover from pandemic. In light of the COVID-19 epidemic, the increased demand for anxiety-relieving products among airline passengers will promote business expansion. For instance, in 2020, Bath & Baby Works (BBW) retail distributor Essence Crop, based in Miami, reported a 41% increase in its retail sales from the company.
Global Travel Retail Market Analysis
Global travel retail market growth has been increasing by the rapid and continuous rise of travel and tourism worldwide. The expansion of the market has been significantly influenced by the rise in domestic and international traveler foot traffic, particularly when it comes to air travel. Another factor influencing upward market trends is improved infrastructure and retail options. Additionally, the expansion of the global travel retail market is directly impacted by the consistent rise in disposable income, rise in travel among millennial as an experiential value, digitalization owing to urbanization, and changing behavior. Other reasons driving the tourism industry including a growth in leisure and business travel as well as medical tourism. This is boosting the travel retail market demand even further. These are the major factors anticipated to boost the travel retail market share during the analysis timeframe.
However, travel retail stores sell a lot of branded products. Due to their premium quality, they are more expensive. The demand from lower-income traveler groups is declining as a result of businesses being able to sell travel-related goods at higher prices. Additionally, consumers' ignorance of recent product introductions and technological breakthroughs limits the market growth and can hamper the market demand.
The potential for growth of the travel retail market is enormous due to technological advancements that allow for improved tracking and analysis of consumer trends. Brand retailers have the chance to implement a loyalty management system to track and evaluate their customers in order to serve the majority of travelers. By keeping track of customer behavior and improving tracking of customers, loyalty management systems help businesses generate income from the travel retail market. Furthermore, the travel retail market trend in industry may have a chance to benefit from collaborative partnerships between opulent and luxury companies. Lifestyle brands have the chance to increase customer interaction and make their purchases more memorable, which will encourage them to make additional purchases.
Global Travel Retail Market, Segmentation
The global travel retail market is segmented based on product type, sales channel, and region.
The product type segment is further classified into perfume & cosmetics, electronics, wine & spirits, food, confectionery & catering, tobacco, luxury goods, and others. Among these, the perfume & cosmetics sub-segment is anticipated to have a dominant market share and shall surpass $81,414.5 million by 2031, with an increase from $16,442.0 million in 2021, due to rising sales of various personal care products through several retail outlets. New boutiques are being constructed in airports all around the world by L'Oreal and other cosmetics brands. This factor is anticipated to further fuel the segment growth. Furthermore, the segment is growing since cosmetics and perfume can be purchased at tax-free prices as a presenting accessory without incurring import fees. By exhibiting a variety of brands and collections under one roof, the retailer makes it simple to purchase travel. Branded cosmetics and fragrance companies draw customers from a wider range of demographics, thanks to their customer-friendly business practices.
The sales channel segment is further classified into airports, cruise liners, railway stations, border, and down-town & hotel shop. Among these, the airports sub-segment is anticipated to have a dominant market share and surpass $ 137,236.9 million by 2031, with an increase from $ 29,450.6 million in 2021. The airport industry, which is expected to dominate the market, owned the largest market share in 2021. More individuals are anticipated to use air travel as it becomes more accessible and affordable, which is predicted to boost the sector expansion. A number of airports' initiatives to boost profitability from non-aeronautical resources have also driven the growth of this segment.
The travel retail market share in the Europe region is projected to show the second fastest growth during the forecast timeframe. This region’s market generated a revenue of $14,305.8 million in 2021 and is projected to reach up to $64,833.2 million by 2031. Due to Europe's larger selection of luxury goods, travel retail is a significant factor of aviation and marine financing and has become an essential aspect of the traveling experience. One of the biggest luxuries and fashion retailers for travel has its headquarters in the European region. The expansion of the European travel retail sector is predicted to be fueled by an increase in travel and tourism brought on by rising disposable income, increased urbanization, and a change in consumer habits. The expansion of the travel retail sector in Europe will be further assisted by continued growth in the travel and tourism sector, infrastructure improvements in the hospitality sector, and improvements in online booking.
Key Players in the Global Travel Retail Market
Some of the leading travel retail market players are
- Aer Rianta International
- China Tourism Group Duty Free Corporation Limited
- DUFRY GROUP
- Duty Free Americas, Inc
- Gebr. Heinemann SE & Co. KG
- King Power International.
- Lotte hotel
- Lagardère sca (lagardère travel retail)
- LVMH Group
- THE SHILLA DUTY FREE.
In September 2021, Lagardère Travel Retail entered in strategic partnership with JD.com. This partnership will position Lagardère Travel Retail for accelerated growth in China and contribute to the evolution of its business model in an increasingly digitalized world where consumers expect an omni-channel customer experience driven by supply chain performance, consumer insights, and loyalty recognition.