Passenger numbers 10% behind pre-Covid level
People are ‘hungry to travel again’ but global passenger numbers are 10% behind pre-Covid levels and challenges persist, the Tax Free World Association (TFWA) president warned.
Erik Juul-Mortensen, TFWA president, noted the global travel retail sector was not back to 2019 levels yet regarding passenger numbers, despite improvements.
“There is plenty of positivity around duty free and travel retail at the moment,” he said during the opening conference at the TFWA World Exhibition & Conference in Cannes, France. “People are hungry to travel again as shown by the healthy results many airlines have reported this year, but we are not quite back to where we were in 2019.
“[International Air Transport Association] IATA global passenger numbers for the first six months of 2023 are around 10% behind their pre-Covid level, although the deficit for June narrowed to 5.8%.
“The surge in air traffic, although welcome, has created staffing problems, since 43% of airport workers worldwide left the sector during the pandemic, according to the Air Transport Action Group.
“The combination of the loss of highly experienced and specialist staff and the move to hybrid working have made recruiting even more difficult.”
Recovery is not equal in different parts of the world, he continued to note, describing it as “patchy”. While some airports in Europe are nearing 2019 levels, traffic in Asia is taking longer to return to pre-pandemic levels.
“But China’s recent expansion of authorised destinations for group travel will help,” Juul-Mortensen said. “Overall, ACI World predicts global air passenger traffic of 8.6 billion this year, 94% of the pre-pandemic level. But there are concerns in some quarters that rising airfares and the rising cost of living may dilute the demand for travel.”
Outside of airports, Juul-Mortensen noted the cruise and ferry channel is seeing “robust recovery”.
“The baseline forecast of the Cruise Lines International Association for this year foresees passenger volumes some 6% above 2019,” he added. “That the market has changed since Covid has by now become a cliché, yet it remains true. Travellers are returning but buying habits have evolved. Average transaction values have risen, but footfall and conversion statistics sometimes fall short of pre-pandemic levels.”
The TFWA president also highlighted the importance of adopting changes across the global travel retail industry, such as embracing sustainable practices.
Protecting the industry
He celebrated companies doing “brilliant work” to ensure their products are made with “minimal environmental impact”.
However, he added: “In stores we see isolated displays showcasing products that are labelled as ‘sustainable’. What does that say to our customers? That 1% of our offer is sustainable and the rest is not?
“No, we need to be more ambitious, setting ourselves key targets for sustainability in our product assortment and [communicating] those targets and milestones more boldly to our customers.
“Nobody else is going to protect our industry – it’s up to us. And we can do it. The first requirement is data to communicate the size and economic benefits of our industry. I cannot think of any other sector that doesn’t have reliable data.
“The [European Travel Retail Confederation] ETRC index is a model for what we need in each region, and it’s only made possible by the data received from retailers.
“I know this is a concession-based business, and it’s competitive, but surely we should all be able to agree some parameters for sharing industry data at global and regional levels.
“If it can’t be this year’s data because of competition concerns, then let’s agree to provide data at region, channel and category level with a three-year lag. We could start with 2019 – pre-pandemic – as a baseline. It needs the leadership of the CEOs in this room to commit to that.”