Travel Retail Faces $9 Billion Value Gap Despite Post-Pandemic Recovery

The global travel retail sector is facing a critical inflection point, with a $9 billion value gap emerging in 2023 despite a strong rebound in passenger traffic, a report shows.

A new industry report by customer experience consultancy CXG, Revolutionising Travel Retail, outlines strategic imperatives for stakeholders to bridge this gap and future-proof the industry.

According to data from ACI World cited in the report, global air traffic is projected to reach 9.9 billion travellers in 2025, surpassing pre-pandemic levels, and nearly doubling to 19.5 billion by 2042. Yet, average spend per traveller has dropped 15 per cent from $19 in 2019 to $16 in 2023, shrinking the overall market from $86 billion to $72 billion.

CXG attributes this decline to a lag in customer experience standards within travel retail compared to domestic retail environments. While domestic boutiques deliver exceptional experiences 50 per cent of the time, travel retail counterparts manage only 28 per cent, highlighting a missed opportunity to engage a captive audience.

The report showcases best-in-class examples of airports transforming retail into immersive, high-value experiences. London Heathrow's Terminal 5 offers personal shopping and ultra-luxury services, while Louis Vuitton's Le Café at Terminal 2 blends fashion and fine dining. Singapore's Changi Airport leads with AI-powered retail, robotic baristas, and cultural attractions like the HSBC Rain Vortex and Shiseido Forest Valley. Doha's Hamad International Airport and Seoul's Incheon Airport integrate wellness centers and cultural zones, boosting spend by up to 35 per cent among engaged travelers.

CXG proposes a“Trilogy Approach” aligning airport authorities, travel retail operators, and brands to elevate customer experience, optimize operations, and maintain brand integrity. The consultancy emphasizes data-driven strategies, staff training, and stakeholder alignment as key to unlocking growth.

With passenger volumes set to soar, the report urges industry players to rethink travel retail as a curated experience hub rather than a transactional space.“The future of travel retail lies in immersive, personalized, and culturally rich experiences,” the authors conclude.

MENAFN15092025000049011007ID1110066085