Travel Retail & Duty-Free Market by Product (Beauty & Cosmetics, Alcohol, Fashion & Accessories, Tobacco Items, Confectionery & Catering, Electronics, and Others), and by Distribution Channel (Airports, Railway Stations, Military and Diplomatic, Seaports & Cruise Ships, Ferries, Border Shops, Downtown DF Shops, and Others) – Global Opportunity Analysis and Industry Forecast, 2023–2030
Industry: Retail and Consumer | Publish Date: 07-Jan-2025 | No of Pages: 367 | No. of Tables: 232 | No. of Figures: 177 | Format: PDF | Report Code : RC382
Market Definition
The global Travel Retail & Duty-Free Market size was valued at USD 64.79 billion in 2022, and is predicted to reach USD 156.28 billion by 2030, with a CAGR of 10.7% from 2023 to 2030. Travel retail, also known as duty-free retail, refers to the retailing of products and services to travelers in locations such as airports, train stations, seaports, and others. Duty-free stores are designed to meet the needs of travelers on the go. They offer various products, including cosmetics, alcohol, and electronics.
Duty-free travel retail entails travelers to make purchases without paying certain taxes or duties, making the products available at lower prices compared to the traditional retail outlets. This concept allows travelers to shop for exclusive and luxury brands, take advantage of special offers, and enjoy a convenient shopping experience while moving. These stores often offer exclusive products that are not available in other places. Duty-free travel retail plays a significant role in the global retail industry and bridges the gap between international travel and shopping.
The travel retail & duty-free industry is growing, and it is expected to continue its growth in the future. This is due to several factors, including the increasing number of travelers, the growing popularity of duty-free shopping, and the rising demand for convenience.
Rising Number of Global Travelers
The growing number of travelers worldwide and the rising number of international & business travelers taking trips for various purposes are significantly fueling the market growth. According to new data from the World Tourism Organization (UNWTO), more than 900 million tourists traveled internationally in 2022, double the number recorded in 2021 (though still 63% of pre-pandemic levels). Moreover, affordable airfare and improved transportation infrastructure have made it easier and cheaper for people to travel internationally. This has increased the demand for retail services in travel environments, such as duty-free shops, restaurants, and souvenir shops.
Duty-free stores cater to the unique needs of travelers, offering a wide range of products such as luxury goods, fashion items, electronics, cosmetics, and souvenirs for leisure travelers along with electronics, accessories, and business essentials for business travelers. Therefore, the growing number of international travelers combined with the convenience and cost-effectiveness of duty-free shopping have contributed to the increasing popularity of duty-free travel retail.
The Modernization of the Air Travel Industry's Infrastructure
With the development and expansion of airports worldwide, air travel has become more accessible and efficient, leading to a surge in the number of travelers passing through airports and boosting the growth of the travel retail & duty-free market. As of March 2022, the total number of airports under construction worldwide reached 641, with the Asia-Pacific region leading the count in March 2022. The region boasted the highest number of ongoing airport infrastructure projects, totaling approximately 230 diverse undertakings, including runways and terminals. Europe closely followed, securing the second-highest count with 178 airport infrastructure projects under construction during that period. This has created a thriving customer base for duty-free shopping.
Establishing new airports and improved connectivity through air routes have opened up new travel routes and destinations, providing duty-free retailers with opportunities to set up stores in strategic locations. Modern airport terminals with spacious duty-free retail areas have enhanced the shopping experience for travelers, while airports have transformed into vibrant spaces with various amenities. The expansion of air travel infrastructure has created a favorable environment for the travel retail & duty-free sector to thrive within the global travel industry.
Growing Demand for Cosmetic and Alcohol Products
The growing demand for cosmetics and alcohol plays a significant role in thriving the travel retail & duty-free industry. Duty-free shops offer exclusive, high-quality products, attracting travelers who seek unique cosmetics and alcohol options. The competitive pricing and tax advantages in duty-free shops make these items more affordable than local retail stores. Moreover, the growing popularity of gift-giving among people has increased the number of travelers buying high-quality brand products from duty-free shops. This has, in turn, contributed to the growth of the travel retail & duty-free industry. According to the 2022 Q4 Duty-Free World Council report, the number of international travelers who prefer to buy duty-free products as a gift was 25% in Q4.
Furthermore, owing to the implementation of substantial taxes on alcohol products by the government, many travelers now opt to purchase wines and spirits from duty-free shops. This shift in consumer behavior has significantly contributed to the growth and demand of the duty-free industry. Additionally, duty-free shops provide convenient gifting opportunities, as cosmetics and alcohol are popular choices for presents. With fewer travel restrictions on these items, travelers can easily purchase and transport cosmetics and alcohol without concerns. The duty-free industry actively promotes cosmetics and alcohol through marketing activities and collaborations, further driving the demand for these products.
Travel Restrictions and Security Measures by the Regional Government
Travel restrictions and security measures such as visa requirements and entry bans imposed by the regional government are restraining the travel retail & duty-free market growth. Moreover, sensitive security measures at airports and border crossings result in longer wait times and stricter regulations, reducing the time available for travelers to explore and shop at duty-free stores. These limitations and delays impact the travel experience, discouraging extensive shopping and decreasing footfall and sales in duty-free retail areas, restraining the market growth.
Increasing Popularity of Pre-ordering Duty-free Products Online
The rise of e-commerce has opened up opportunities for duty-free operators to expand their reach beyond physical stores. Companies offering online duty-free platforms or providing digital marketing services in e-commerce have promising opportunities. Many duty-free retailers offer pre-order services, allowing travelers to browse and reserve products online before their trip. This enables customers to secure their desired items and pick them up at the airport or other designated locations, saving time and ensuring availability. According to the m1nd-set report 2022, about 33% of travelers knew they could pre-order duty-free products online, and 21% had done so at least once in the past three years.
Online duty-free shops typically have a wide selection of products, often featuring well-known international brands and many offers and discounts. Customers can explore a diverse range of options and compare prices easily, enabling them to make informed purchasing decisions. Moreover, duty-free online shopping platforms often feature exclusive deals, discounts, and promotions unavailable in physical stores. Travelers can use these offers to enjoy further savings or receive gifts or bonus points.
Europe is Projected to Dominate the Travel Retail & Duty-free Industry
Europe is the go-to destination for international travelers, with various attractions ranging from historical landmarks to stunning natural beauty. Over two-thirds of the total international tourists visit the continent each year. This contributes to the significant growth of the travel retail & duty-free industry. According to the World Tourism Organization (UNWTO), France received the most international tourists in 2021, with 48.4 million visitors. Spain was the second-most popular destination, with 31.2 million visitors, and Italy was third, with 26.9 million visitors.
Moreover, the well-connected rail network in the European Union offers travelers a wide range of luxurious duty-free products, such as fashion, cosmetics, and alcohol. This is one of the driving factors that lead to the growth of the travel retail & duty-free industry. High taxes on alcohol and tobacco items in many countries encourage travelers to purchase these products while traveling internationally. This has propelled the growth of the travel retail & duty-free market.
In addition, the travel retail & duty-free market is being driven by the presence of major companies, such as Dufry, Lagardère, and LVMH Moët Hennessy, which have a large customer base and offer a wide range of duty-free products. These companies are committed to providing excellent services & products and developing innovative business strategies to meet the needs of their growing customer base.
For instance, in March 2023, Dufry partnered with L'Oréal and launched Valentino Make Up at Heathrow Airport. This collaboration brings the renowned Valentino brand to the travel retail market, offering exclusive cosmetic products to passengers.
North America to Witness a Substantial Growth
The growing tourism industry in the countries such as U.S. and Canada plays a significant role in driving the growth of the travel retail market. With millions of Americans traveling internationally for various purposes, such as vacations and business trips, there is a substantial customer base for duty-free products.
According to the World Travel & Tourism Council, travel & tourism’s contribution to GDP increased by USD 1 trillion in 2021, reaching USD 5.8 trillion. The sector’s share of the whole economy rose from 5.3% in 2020 to 6.1% in 2021. As a result, duty-free retailers can cater to domestic travelers' needs and preferences by offering a wide range of products, exclusive promotions, and a seamless shopping experience.
Moreover, the rising demand for duty-free alcohol and tobacco products is a key driver for the travel retail & duty-free market. Duty-free stores in airports and border crossings offer travelers the chance to buy these products at tax-free prices, making them highly attractive. Also, the increasing number of partnerships between companies to expand their businesses into a wider range of products is leading the industry to grow in this region.
For instance, in May 2023, Toys"R"Us and Duty-Free Americas partnered to open the first-ever Toys"R"Us airport store at Dallas Fort Worth International Airport (DFW). The store is slated to open in time for the 2023 holiday season. The store will be located in Terminal A and will feature a wide selection of toys, games, and other merchandise from popular brands such as Lego, Hasbro, and Mattel. The store will also have a dedicated area for children to play and test new toys.
Furthermore, the convenient access to duty-free shops across the country is further fueling the growth of the travel retail & duty-free market. According to the Canada Border Services Agency, there are 52 duty-free shops located at land border and international airport locations across Canada. Duty-free shopping allows customers to enjoy tax-free purchases, saving money on goods normally subjected to duties and taxes in Canada.
Competitive Landscape
Various market players operating in the travel retail & duty-free industry include China Duty-Free Group, Lotte Duty-Free, The Shilla Duty-Free,, Avolta (Dufry), Lagardere Travel Retail, Gebr Heinemann, DFS Group, Sinsegae Duty-Free, Ever Rich Duty-Free, Dubai Duty-Free, SEVA Group, Duty-Free Americas, WHSmith PLC, HYUNDAI DF Co. Ltd., Japan Airport Terminal Co., Ltd., and others. These market players are adopting strategies such as business expansion and collaboration across various regions to maintain their dominance in the market.
For instance, in April 2023, Dufry officially opened a new duty-free store at Sangster International Airport in Montego Bay. The opening of this store demonstrates Dufry's dedication to serving the needs of passengers and capitalizing on the potential of the travel retail sector at Sangster International Airport.
Moreover, in May 2023, Gebr. Heinemann SE & Co. KG partner SmartSeller opened a new duty-free food service retail space called "All Yours." This retail space aims to provide a wide range of products and services, catering to the diverse needs of travelers. This expansion signifies SmartSeller's dedication to innovation and meeting the evolving demands of the travel retail market by offering an extensive selection of duty-free items and food services in a convenient and customer-centric environment.
Furthermore, in March 2023, DFS Group Ltd. collaborated with Hennessy. They unveiled an exclusive partnership, showcasing the remarkable collaboration between the renowned cognac house and DFS. The partnership encompasses diverse limited-edition releases, exclusive offerings, and immersive activations across DFS stores.
In addition, in November 2022, Shinsegae Duty Free opened an exclusive Gucci ski goggle pop-up store. This initiative adds to Shinsegae Duty Free's portfolio of luxury brands, driving the travel retail market by providing exclusive and sought-after products to discerning travelers.
Travel Retail & Duty-Free Market Key Segments
By Product
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Beauty & Cosmetics
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Skincare Products
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Fragrance
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Others
-
-
Alcohol
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Wines
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Spirits
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Whiskey
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Vodka
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Brandy
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Gin
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Tequila
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Others
-
-
-
Fashion & Accessories
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Fashion
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Clothing
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Footwear
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Handbags and Luggage
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-
Accessories
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Sunglass
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Watch
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Jewelry
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Others
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-
-
Tobacco Items
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Confectionery & Catering
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Electronics
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Others
By Distribution Channel
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Airports
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Railway Stations
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Military and Diplomatic
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Seaports & Cruise Ships
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Ferries
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Border Shops
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Downtown DF Shops
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Others
By Geography
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North America
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U.S.
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Canada
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Mexico
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-
Europe
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U.K.
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Germany
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France
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Italy
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Spain
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Denmark
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Netherlands
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Finland
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Sweden
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Norway
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Russia
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Rest of Europe
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-
Asia-Pacific
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Australia
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China
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India
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Indonesia
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Japan
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Singapore
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South Korea
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Taiwan
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Thailand
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Rest of Asia-Pacific
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Rest of the World (RoW)
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Latin America
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Middle East
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Africa
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Key Players
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China Duty-Free Group
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Lotte Duty-Free
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The Shilla Duty-Free
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Avolta (Dufry)
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Lagardere Travel Retail
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Gebr Heinemann
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DFS Group
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Sinsegae Duty-Free
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Ever Rich Duty-Free
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Dubai Duty-Free
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SEVA Group
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Duty-Free Americas
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WHSmith PLC
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HYUNDAI DF Co. Ltd.
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Japan Airport Terminal Co., Ltd.
Report Scope and Segmentation
|
Parameters |
Details |
|
Market Size in 2022 |
USD 64.79 Billion |
|
Revenue Forecast in 2030 |
USD 156.28 Billion |
|
Growth Rate |
CAGR of 10.7% from 2023 to 2030 |
|
Analysis Period |
2022–2030 |
|
Base Year Considered |
2022 |
|
Forecast Period |
2023–2030 |
|
Market Size Estimation |
Billion (USD) |
|
Growth Factors |
Rising number of global travelers The modernization of the air travel industry's infrastructure |
|
Countries Covered |
28 |
|
Companies Profiled |
15 |
|
Market Share |
Available for 10 companies |
|
Customization Scope |
Free customization (equivalent to up to 80 working hours of analysts) after purchase. Addition or alteration to country, regional, and segment scope. |
|
Pricing and Purchase Options |
Avail customized purchase options to meet your exact research needs. |
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