The travel retail market is growing rapidly and the global market for travel retail is anticipated to grow at a CAGR of 10.14% from 2023 to 2028 and the size of the global market is expected to be valued at USD 110.46 billion by 2028 from USD 68.15 billion in 2023.
Travel retail means selling goods and services to travelers in traveling environments such as airports, railway stations and others. The products and services purchased from travel retail are not subjected to tax terms and can be immediately taken out of the country.
The growing global tourism industry and increasing leisure and business travel are majorly propelling the growth of the travel retail market. The growing middle-class population is growing rapidly in many countries and this population is likely to do international travelling in the coming years for some reason. According to a study, an estimated 280 million households are predicted to do international travelling each year by 2050. The traveling activities done by the millennial generation are high compared to all other generations. The demand for travel retail is directly proportional to the growing number of trips by people. It is evident that the travelling activities by people will rise in the coming years and the same growth can be seen in the travel retail market.
The growing disposable income of people in several countries is contributing to the growth of the travel retail market. The consumption of tourism is likely to be accelerated by the people with the rising disposable income in many countries. Regions such as Asia have experienced a spike in the middle-class population in the recent past, which resulted in an increase in disposable income, especially in countries such as India and China. The number of domestic tourists in Wuhan, a city in China, increased by 10.8% between 2018 and 2019.
The growing efforts by the key market participants to encourage people to purchase duty-free products are driving the global travel retail market growth. The key market participants always present some offer to the people who travel in plains and this trend is currently progressing well and is expected to continue in the coming years and contribute to the market growth. The growing urbanization and rapidly changing lifestyles of people are further supporting the global market growth.
On the other hand, high-pricing products in the travel environment are inhibiting the global travel retail market. The market participants that operate in the travel retail market are selling products that are of high quality and from promising brands, which are basically expensive and are not affordable to everybody who travels. A stringent regulatory framework and challenges from the customs department are showcasing negative impacts on the global market. The growth of e-commerce is potentially diverting people from purchasing via physical stores, and the same is happening with travel retailers, which is diminishing the growth of the global market.
Impact of COVID-19 on the global travel retail market:
The global travel retail market experienced a significant decline in the market’s growth rate during the timeline of the COVID-19 pandemic. The primarily measure that had been taken by the governments of several countries to limit the spread of coronavirus among people in their countries was ban on travelling and almost all countries have closed their borders to protect their people from COVID-19. This has significantly damaged the travel industry and caused a considerable decline in the growth of the travel retail market. As per the data published by UNWTO, the number of global tourists went down by 65% between 2019 and 2020. The participants of the travel retail market have experienced unprecedented consequences due to the sudden arrival of the COVID-19 pandemic, and their recovery is expected to take considerable time. In recent times, it’s been observed that the impact of the COVID-19 pandemic has reduced significantly and many countries have opened their borders under several preventive measures. With these initiatives, the travel retail market is expected to resume and do well in the coming years.
Market Size Available
2022 to 2028
2023 to 2028
By Product, Sector, Distribution Channel and Region
Various Analyses Covered
Global, Regional and country Level Analysis, Segment-Level Analysis, Drivers, Restraints, Opportunities, Challenges, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview of Investment Opportunities
North America, Europe, Asia Pacific, Latin America, Middle East and Africa
This research report on the global travel retail market has been segmented and sub-segmented based on product, sector, distribution channel and region.
Global Travel Retail Market – By Product:
The perfumes and cosmetics segment led the market in 2022 and captured a share of 41.4% of the worldwide market. The perfumes and cosmetic products is the most popular category and people with higher disposable income like to purchase these products from the stores in airports and railway stations. People see stores at airports as a good place to purchase high-quality beauty products, which is one of the factors propelling the perfumes and cosmetics segment in the worldwide market. People believe that beauty products that are available at stores that are located in airports have a wide collection of products that are difficult to find in their own countries, and this interest of theirs is driving sales of perfumes and cosmetic products.
The wine and spirit segment accounted for the second-largest share of the global market in 2022 and is expected to grow considerably during the forecast period. People who like international liquor brands see the stores at airports as the best place to purchase such products, which is primarily driving the growth of the wine and spirits segment in the global market. Globally renowned wine sellers are mainly using stores at airports to accelerate their sales.
Global Travel Retail Market – By Sector:
With accounting a share of 66.8% of the worldwide travel retail market, the duty free segment emerged as the leader in the market in 2022 based on sector. Travelers can gain tax and duty benefits by buying products from stores that are duty-free.
Global Travel Retail Market – By Distribution Channel:
The airport segment accounted for a share of 46.9% of the global market in 2022, and its domination is expected to continue throughout the forecast period. The growing number of international travelers is majorly driving the growth of the airports segment in the global market. Among various distribution options, the companies that operate in the travel retail market have been experiencing a good amount of demand for their products from the stores operating at airports. Passengers are being able to buy products without paying any local taxes and duties from buying stores at airports as a majority of the airports offer duty-free shopping options, which is another major factor driving the growth of the airport segment in the worldwide market.
Global Travel Retail Market – By Region:
The Asia-Pacific regional market captured the largest share of the worldwide market in 2022, which was 41.4%. The lead of the Asia-Pacific travel retail market in the worldwide market is estimated to continue during the forecast period. The growing number of international travelers, the presence of developing economies, the increasing middle-class population and the rising disposable income of people living in the countries of the Asia-Pacific region are majorly driving the growth of the APAC market. Several tourist destinations are located in the countries of APAC and these are significantly driving the interest of domestic and international travelers and driving sales in travel retail. The duty-free retail is growing significantly in the countries of the Asia-Pacific region, especially from countries such as India, China and South Korea, which is another major factor contributing to the growth of the APAC market. An increasing number of collaborations between duty-free retailers and the domestic and international airports of the Asia-Pacific region are further propelling the growth rate of the APAC travel retail market.
Europe occupied a substantial share of the global travel retail market in 2022 and is anticipated to grow at a promising CAGR during the forecast period. Europe is popular as a global tourist destination, and people from all over the world visit European countries as vacation places every year. Europe is home to several historical places and is attracting people from various countries for a visit, which is increasing foot traffic at airports and contributing to the growth of the European travel retail market. The growing travel and tourism industries and the presence of several leading fashion giants in Europe are further propelling the European market growth. The UK held the largest share of the European market in 2022 and Germany is predicted to witness the highest CAGR among all the European countries during the forecast period.
North America is estimated to showcase a prominent CAGR during the forecast period.
KEY MARKET PLAYERS:
DFS Group Ltd. (Hong Kong), Duty Free China Group Co. Ltd. (CDFG) (China), Gebr. Heinemann SE & Co. KG (U.S.), Lagardere Travel Retail (France), Lotte Duty Free (South Korea), Aer Rianta International (Ireland), Samsung Group (South Korea), The Nuance Group AG (Switzerland), Dufry AG (Switzerland) and King Power International Group (Thailand) are some of the leading players in the global travel retail market.
RECENT HAPPENINGS IN THE MARKET:
The growth in the European travel retail market is driven by increased tourism, a rise in disposable income, and a growing demand for luxury goods.
The Middle East is witnessing a trend of digitalization in travel retail, with an increasing focus on online sales channels and technology-driven customer experiences.
In North America, cosmetics and perfumes hold the largest market share in the travel retail sector, followed by fashion and accessories.
The European travel retail market experienced a temporary downturn during the pandemic, with a decline in sales due to travel restrictions. However, recovery is underway with the easing of restrictions.
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