Focus shifts to Dubai Duty Free Golf World Cup
As the MEADFA Conference draws to a close, we put the spotlight on the Dubai Duty Free Golf World Cup, which takes place at The Montgomerie and Dubai Creek Golf & Yacht Club on 24 and 25 November. We will bring you pictorial highlights over the two days.
President hails “a fantastic few days” for the return of the in-person MEADFA event
The MEADFA event welcomed over 460 delegates to the Jumeirah Creekside Hotel this week, with close to a hundred more connecting to the conference livestream on TFWA 365.
Reflecting on the industry gathering, MEADFA President Sherif Toulan (pictured) said: “It has been a huge pleasure to welcome our industry to Dubai this week. Not only have we enjoyed a stimulating and thought-provoking conference, but also wonderful hospitality thanks to our host and sponsors.
“On behalf of the MEADFA Board, our sincere thanks to our host Dubai Duty Free, to all our sponsors, to TFWA for their assistance, and to all the delegates who took part, live and online. It has been a fantastic few days that I feel sure will help to reignite our industry in the region.”
Inspirational views on sustainability and recovery close the MEADFA Conference
The MEADFA conference sessions finished on an uplifting note as the subjects of sustainability and digitisation were examined in two highly-entertaining and inspirational presentations. They were delivered by Dr. Jennifer Cords Director Corporate Affairs, Business Compliance & Corporate Responsibility at Gebr. Heinemann and Richard Gray, CEO of Aer Rianta International Middle East.
Cords had these impassioned words to say when summing up on the subject of sustainability, as she challenged the audience to follow her employer on to a future which puts sustainability as a key business and travel retail industry priority.
“What needs to change in every company? Whether you are an airport, airline retailer or brand, you need to find the right ambassadors for sustainability, that matrix thinking. If you get McKinsey or if you have the big consultants coming into your organisation, they will tell you that sustainability should not sit in the basement but in the boardroom.
“It’s not a project, it’s a brain pool, everybody in your organisation can contribute to your goal. And how do you do that? Unfortunately, the bad news for all of us before you can change something for example, CO2 emissions, you need to measure it. Number crunching.
“What you measure you can reduce and that’s the principle. I’m super impressed by the young people who are protesting around the globe for a better future, they know exactly about the science, they know better than we do in our corporate structures.
“So we need to hire the hippies, we need to hire the youngsters, the protesters, the tree huggers and the vegans because they know better than we do as corporations [about sustainability].
“Imagine together with me that future proof companies or future proof retailers only want to work in the future with other future proof companies [that are sustainable across their operations]. You could have compliance discussions about that. Or what if voluntary actions become a requirement, in a tender process for example?
“And what if competition is the best ever, most wanted thing to happen for sustainability? I’m standing or sitting here today with ARI with a competitor.
“Because the good thing is we should all compete to do better, we should be triggered by that. If I know that a certain retailer or a company is doing better, doing more, having more ambitious goals [on sustainability], we should compete with them in a positive way.
“This is something that we need to digest together because sustainability should not sit in communication. It should not sit in marketing. It should fit in the boardroom.”
Gray – who also discussed the subject of sustainability in-depth, outlining in detail ARI’s commitment to the issues surrounding it – had a tough act to follow, but also produced an inspirational presentation with a positive message about the future of the travel retail industry.
Reflecting on how the industry reacted to pandemic crisis challenges, he said: “We changed our business models. We worked closely with our stakeholders which have ensured we’re armed with a robust balance sheet.
“So much so that we’re in a good position for when travel resumes. And the level of engagement from airports and brands [with travel retailers] has never been greater, because of the need to react, to respond, to understand together, the changes to the customer journey or the traveller’s journey.
“There is strong collaboration and strong support – not by everybody, by the way – but by the vast majority, and acknowledgement that we share the needs of balancing quick wins against long-term strategic goals.
“And having a collaborative approach with our brand partners is and always has been essential to maximise business performance.”
Gray, who expressed the sentiment that “not all superheroes in travel retail wear capes”, finished with these words. “I see a future of recovery, which will be hard with a few twists and turns as we’ve all said on this stage the last couple of days, backed up with collaborative working and sustainable demands.
“I do see resilience from the industry and I do see a desire for us all to implement the technological advancements. I also see that we need to continue with personal service, with great colleagues and brilliant teams learning and developing because we are a first and foremost a business built on personal service, great merchandising and super products.
“Now with enhanced digitalisation, and better green credentials, when we look back at was an absolute, unmitigated disaster [the COVID pandemic], the leaders of this great industry, including you in the audience, on your screens and in your offices at home, you ensured that we came through this. We have a great industry.”
Update on MEADFA advocacy efforts for tobacco, alcohol and confectionery
There was an informative session on MEADFA advocacy efforts today, moderated by John Hume, Founding Partner of Hume Brophy. MEADFA Advocacy Working Group Chair Rita Chidiac was joined in the conversation by Ricardo Oliveira, External Senior Counsel for the Duty Free World Council and the European Travel Retail Confederation.
They presented that latest information on the fight to defend duty free tobacco sales, and provided updates on regulatory challenges across all product categories.
It was revealed that MEADFA is to add new category task forces dealing specifically with liquor and confectionery. This will broaden the scope of work defending the business interests of the duty free industry alongside the Advocacy Working Group’s high-profile task force for the tobacco category, which is challenging the World Health Organisation’s assertion that it is involved in the illicit trade of tobacco.
Chidiac said: “We are the most highly regulated industry and everything is starting with us – it’s a domino effect. In Europe, we are starting to see regulation on both alcohol and confectionery.
“And that’s why now we have new dedicated task forces for those categories, because we know that whatever is starting with tobacco is not going to end there. It’s only a matter of time before we will see the sugar tax which already started, and next it will be alcohol duty free allowances.”
Oliveira presented a defence for the retailers responsible for the duty free tobacco category and its alleged links with illicit trade. “It is a false allegation that our channel, which is a highly controlled channel, is a ground for substantial contribution for illicit trade in tobacco. It’s totally unfounded. And that’s why we are fiercely fighting these allegations because they are untrue.
“Just to make it clear for everyone, and we say this always in any position that we take representing the industry, we are totally supportive of any measures to combat illicit trade around the world. But let’s do it right, let’s do it where trouble really exists.
“Let’s not take an unfair approach that will only penalise legally-established [duty free] retailers selling legitimate products, has a highly controlled supply chain, which is very safe, very secure, it’s very transparent. Can you think of a more controlled environment than the one we operate in?”
Panel session: Perspectives on stimulating African tourism and aviation
A variety of perspectives from the African airline, airport, tourism and travel retail sectors were presented in a wide-ranging panel session at the MEADFA Conference this morning.
Sharing updates and views with Dermot Davitt were Africa Airlines Association Secretary General Abderahmane Berthe, Abidjan International Airport Chief Executive Officer Aka Manouan, Africa Tourism Association CEO Naledi Khabo and Dufry General Manager Africa Isaias Diaz.
Berthe – whose organisation represents members covering 85% of African international air traffic – revealed that plans are being advanced to consolidate the African aviation market following on from a workshop in September which involved major African airlines and Lufthansa Consulting.
“It was a very successful workshop,” said Berthe. “We have solid recommendations and through this we will make some studies to see how we can consolidate and integrate African aviation.
“If you look at the African continent, we have 55 countries, maybe every country wants to have its own airline but it is not viable because the traffic is very, very small.”
He pointed out that even before COVID-19, it was more than a decade since the African airline business was profitable, thus the move to look for new solutions. These, he said, are now imperative with the financial burdens which have been added by the pandemic period.
He continued: “Personally, I feel that we need six or seven global [African] airlines, which are flying all over the world. We’ll approach all our stakeholders and also development and financial institutions to make this study to see how we can carry forward this consolidation plan.”
Manouan outlined some of the ambitions for Abidjan International Airport, a leading travel hub in the capital of West Africa’s Ivory Coast. The airport includes an international terminal serving major carriers such as Emirates, Turkish Airlines, Air France and Qatar Airways, as well as some of the larger African airlines.
He said the COVID-19 outbreak and the restrictions which have followed have exposed the airport’s huge dependence on aeronautical revenues. This, he added, has led to a focus on developing non-aeronautical revenues – a new business development unit has been formed with the aim of optimising the entire airport for revenue generation activities.
The panel session also featured a state of business update from Dufry’s Diaz, who reported that the travel retailer’s revenues in Africa are expected finish between -57.6% and -60.1% down measured against 2019. There has been a steady improvement in performance across the year and Dufry’s prediction is that business may be down by a more modest -38.4% across the final quarter.
Diaz emphasised some positive signs for the future, with indications that passengers are willing to spend more once they pass security control and the expectation that African governments will further relax health protocols to help further reactivate the aviation sector.
Diaz also noted some trends observed in Africa so far this year including multi-category basket spending, more pre-planned purchases, increased digital interaction and more static promotional activity taking place in-store, as safety protocols continue to dictate passenger behaviour.
Africa Tourism Association CEO Naledi Khabo offered some great thoughts on possible future directions for the African tourism industry, which could potentially play a major part in stimulating the continent’s aviation market.
Khabo said that typically, Africa is promoted from a tourism perspective as a safari destination, especially in the Western markets. She called for “greater diversity amongst the products that we promote”.
She said: “We have so many other products and destinations that don’t offer the safari option that we could be promoting here. And I think that the onus is on organisations such as ours to promote those destinations.
“We haven’t tapped into the diaspora market. They’re looking for more cultural and urban experiences. So I think that as we look forward in reframing, how we position the destinations and the products is going to be a key to success.”
Considering the longer-term sustainability of the African tourism industry, Khabo said: “Through COVID, we’ve had to focus on domestic and regional travel in a way that we never did before. I don’t think that can go away as we move forward because we may be back here again, whether it’s another iteration of COVID, or some other instance, that prevents us from focusing on a non-African market.”
She added: “We have a billion individuals in Africa to tap into. And I think more African people are wanting to embrace what we have on the continent. I think that that’s going to be a key to sustainable success and sustainable recovery over the next two to three years.”
How Delta Air Lines pivoted to beat the challenges of the pandemic
A fascinating session unfolded this morning, as Delta Air Lines Middle East Regional Director Manoj Kurikose gave insights into how the US aviation giant used the COVID-19 period to rethink its approach to business and the future development of the company.
Before the health crisis struck, Delta held the status of most profitable airline in the US and had achieved an annual turnover of US$47 billion in 2019, leading to an employee profit share out of US$1.6 billion for the following year.
As the pandemic hit and the company’s fleet was grounded, Delta’s strong trading position was turned on its head. By March last year, Delta had a cash burn of US$100 million a day.
The airline’s well looked after employees came to the company’s rescue, as 40,000 employees volunteered to take unpaid leave and 17,000 more took early retirement. The result was a reduction in cash burn to US$27 million a day during June 2020.
Kurikose talked the audience through the other key elements in the company’s turnaround plan in the months leading up to the meaningful return of travel.
These included a policy of open and proactive communications with internal and external audiences such as the media, listening to the concerns of its customers, the evolution of the Delta CareStandard and re-evaluating the Delta business strategy.
Although Delta’s future appears assured, Kurikose was asked if we might see more airlines go out of business or consolidate with other operators. He replied: “I would like to think that the worst is behind us. The airlines that have survived this crisis have restructured and are more attuned to the current environment.
“But having said that, the prolongation of the crisis, the mask compliance policy, the vaccination policy, and even government policy on reopening borders, yes, it does put a risk on some of the companies that are precariously placed with their liquidity position.”
Kurikose – who reported that 90% of Delta staff now have COVID-19 vaccinations – was also asked about the airline’s strategic industry partners (which include KLM, Air France, Virgin Atlantic, Aeroméxico and Korean Air) and how those relationships had helped the company in this time of crisis.
He said: “Our links with Air France, KLM and Virgin Atlantic are particularly strong with a joint venture in place for over ten years; we’ve built up a very good relationship with these partners at every level of the company. We’ve already got integrated teams working together, and we’ve even got people implanted in each other’s companies.
“So at the beginning of the crisis, that was very helpful, because we were able to work seamlessly and mitigate risk to a great degree on the liquidity side. And as the crisis prolonged, we were able to partner together and persuade the governments and other policymakers to make changes that help the aviation industry.
“In the initial period you would think it was more about protecting liquidity for each airline. But as we moved forward in the crisis, we realised that the integrated approach is so important. We need each other more than ever. We cannot operate in silos, and that’s been the big value add – you can’t operate in isolation anymore.”
On the return of Delta business in the Middle East market he said: “This is a testimony to see so many people in this room [attending the MEADFA Conference] as an indication of how people are starting to travel.
“I think there is a pent-up demand, especially with countries like the UAE having a 90% vaccination rate, and that will trigger a lot more travel. It is a question of whether we can scale up fast enough to address the demand.”
The prospects for tourism in the Middle East – the UNWTO view
The first session of day two of the MEADFA Conference gave the audience a high level perspective on what lies ahead for tourism in the Middle East, through the thoughts of United Nations World Tourism Organization (UNWTO) Middle East Regional Director Basmah Al-Mayman.
During her presentation we learned that there was more than one billion fewer international tourism arrivals across the world in 2020 measured against 2019. Underlining this hit is the fact that last year’s arrivals numbers are back to the levels of 30 years ago. It equates to a loss in worldwide exports tourism (including passenger transport) of nearly US$1.1 trillion.
Al-Mayman laid down a number of areas across which UNWTO is supporting the revival of tourism with data insights, country-specific tourism plans, support programmes for tourism businesses, tourism marketing and promotion and redirecting the value chain towards sustainability.
Al-Mayman was asked if governments across the Middle East are giving enough recognition to the role that tourism can play in the growth of economies in the recovery phase and also into the long-term.
She said: “I believe there we will be a greater focus on tourism in the future due to many economic factors. Many countries in the Middle East region have had other economic priorities other than tourism.
“I strongly believe this is already changing and tourism is gaining recognition now. We can see this happening in countries such as Saudi Arabia and many other countries in the region are doubling and tripling their efforts to elevate tourism, especially post-COVID-19.”
Al-Mayman also noted that tourism is becoming a more attractive sector for employment among the youth and women of Middle East.
She also highlighted a new growth area for Middle East tourism as people look to travel away from busy cities in the COVID-19 era. “We will witness new [tourism] destinations with rural tourism gaining a lot of interest. People have started travelling shorter distances and for longer periods, shifting from main cities to remote areas. This will create more diversified tourism products in the region.”
Day two of the MEADFA Conference gets underway
Conference presenters John Rimmer (left) and Dermot Davitt welcome the audience at the start of day two of the MEADFA conference. Stay tuned for highlights from today’s sessions.
A great turnout for the MEADFA Conference Gala Dinner
After the serious business of the day one conference, delegates at the MEADFA event have turned out in force for a fine evening of entertainment, food, drink and conversation at the Gala Dinner, staged at the Jumeirah Creekside Hotel.
A welcome message was delivered by the inimitable Ramesh Cidambi, COO of Dubai Duty Free, who had made an engaging double appearance at the conference earlier in the day.
The buffet dinner was eaten to a backdrop of live music and the appearance of a magician. There was also a cocktail bar and and a beer bar sponsored by Pernod Ricard and liquor retailer African & Eastern respectively.
Bahrain Duty Free’s Bassam Al Wardi delivers upbeat views on new airport and retail offer
Bahrain Duty Free Chief Executive Officer & Board Director Bassam Al Wardi presented some terrific footage of retail developments at the Gulf’s newest terminal in Bahrain International, which opened on 28 January. He addressed the opportunity presented by opening at a brand new location in around 4,700sq m of space, saying that consumers had been wowed to date by the environment, and he paid tribute to the staff at Bahrain Duty Free for delivering the stores during the pandemic.
Discussing the pace of business in recent times with Dermot Davitt, Al Wardi, like others, said he believes the high levels of spending currently being seen will reduce and “naturalise at a certain rate”.
He said it’s hard to judge the situation accurately because of the mixture of the factors relating to COVID-19 pandemic and the spectacular new shopping offer at his airport. “It will probably be six months to one year [from now] before we can work out the actual organic growth [in shopping revenue]. We need to see how things will come down to see the actual effect of the new stores.”
Asked about the current top-performing categories, he said that the “big gamble” on expanding the watch category in the new retail environment is “paying dividends”. He also said that sales of liquor, tobacco and perfumes & cosmetics are coming on strongly.
Al Wardi spoke with pride about the reaction to the new retail offer from Bahrain Duty Free: “The main comment we get from everyone coming into Bahrain is that pictures and video do no do us justice; that’s what everyone says to us when they see the stores for the first time. We have had a lot of positive feedback from passengers, frequent customers, suppliers and other key stakeholders.
“The [Bahrain] Ministry of Transport did set a high expectation and high benchmarks for us and I think we exceeded them. We really appreciate any feedback, that’s how we do business in general. The customer satisfaction and the journey through our airport looks fabulous at this time.”
Considering the prospects for travel and associated retail in 2022, Al Wardi said: “I think we always have to look very positively going forward, there is no other option. We have to act that way as a business and see how we can encourage people to travel and just share the experience. Hopefully 2022 brings a lot of good news for us.”
He underlined that people will “always like to travel, always like to shop”. In his closing comment, he said: “I remember a lot of insight came up at the beginning of COVID in terms of people telling us that passengers will not go through duty free shops, they will go through the gate directly – there is a huge risk that F&B and travel retail is going to be impacted going forward.
“It did happen in the first few weeks, but people go back to their natural way of doing things. We just need to be a bit patient and I am sure as that as the vaccination rate continues [at this pace] we are going to see more prosperity in the future.”
Data insights into MEA air traffic recovery from ForwardKeys
Gordon Clark, Vice President Business Development at ForwardKeys updated the MEADFA audience on global and specifically Middle East and Africa travel patterns.
Among the trends he identified were a notable rise in last minute bookings, increased spend per head among travellers and that flights are now not seen so much as a commodity but as a treat and luxury once again.
Business travel is recovering, he says, supported by the return of live events, such as the Dubai Expo and the MEADFA Conference.
IATA’s Kamil Al Awadi on the aviation ecosystem
International Air Transport Association (IATA) Regional Vice President Africa and Middle East and former CEO of Kuwait Airways Kamil Al Awadi began his thought-provoking presentation with an admission.
He said: “I didn’t know much about your [travel retail] industry [until some research in the lead up to his talk]. But I realised something very important. That is if your industry didn’t exist, the cost for an airline to operate in the airport would go up [substantially].”
He added: “Your industry is lowering the cost for the airline. I don’t think you will hear many airline CEOs say that, but that’s the fact. I thank this industry for being a vital part of aviation’s ecosystem. I can imagine operating [an airline] in an airport with no duty free and wondering why I am paying so much to land and operate there. That is a fact.”
Al Awadi noted that the commercial airline industry is predicted to achieve 40% of 2019 levels this year, and an estimated 61% recovery in 2022.
Giving his thoughts on the crisis and aviation’s influence over its fate, he said: “Aviation lost its leadership to the health minister in hundreds of countries from February or March of 2020. He became the guy who dictated how aviation would run. I lost control of any decision-making process [as an airline CEO].
“We reached July/August last year and by then COVID became fairly well understood and it became clear you don’t really need to stop airlines from flying, yet a lot countries still resisted until the vaccinations come out, which made no sense.”
Al Awadi criticised the majority of countries who failed to talk with the aviation industry about its role in recovery, but noted two exceptions from the MEA region in the form of the UAE and Qatar. “In these countries,” he said, “the [national] emergency response committees actually allowed the aviation industry to talk, took their opinions and evaluated them.”
He underlined the importance of collaboration within the aviation ecosystem going forward in assuring “a safe and sustainable growth of the aviation industry”. Al Awadi continued: “Airports can’t survive without duty free and airlines, airlines can’t survive without airports and duty free and so on. We need each other.
“What we need to do is to collaborate with each other to see what the new norm is down the road. I don’t have the solutions now, we tackle one issue [together] at a time. There’s a lot of work in this industry that needs to be done to define what the new norm will be in 2022.”
ACI Africa’s Ali Tounsi on airport/retailer partnerships
Airports Council International Africa Director General Ali Tounsi gave an overview of the issues facing African airports across the pandemic period with an excellent presentation.
He was asked by TFWA Managing Director John Rimmer about the support of airport operators in the continent for the retail and F&B side of the business and potential modifications of the business model in the face of COVID-19 challenges.
Tounsi noted that prior to the pandemic, a “paradigm shift” was already in progress with African airports putting a greater focus on non-aeronautical revenues because of “the high profit margin” and need for financial stability and sustainability.
He said: “Airlines, airports and duty free must work together towards a common goal. Here I am pleased to say that MEADFA is a partner of ACI Africa in a bid to drive common approaches and strategy, thus answering [the need for] better synergy that I think duty free and retailing need at African airports.
“ACI Africa counted on its member airports in the spirit of crisis to take into account the financial difficulties of duty free operators and to negotiate with them to find solutions to reduce the cost of concessions by taking into account the proportional reduction of traffic. I am pleased to note that this has been adopted by the vast majority of African airports.”
Senior Middle East and Africa travel retail executives discuss recovery
The main panel session of day one featured a high-quality line-up of airport retail experts who joined Dermot Davitt in a conversation about the challenges of recovery. It consisted of Anthony Kenny (Deputy CEO, Aer Rianta International – ARI); Ramesh Cidambi (COO, Dubai Duty Free); Frédéric Chevalier (Chief Operating Officer – Europe, Middle East and Africa, Lagardère Travel Retail); Isabel Zarza (Chief Operating Officer – Central and North Europe, Russia and Africa, Dufry); and François Bourienne (Chief Commercial Officer at Abu Dhabi Airports).
Kenny said that just before the pandemic, ARI launched a new five-year corporate plan but had to pivot quickly and “get into survival mode”. He explained: “We cut back all of our discretionary spend, we reduced our operating costs by 60% and got as much as support as we could from brands, airports and government and airports.
“But at the same time we continued with refits and capital outlays, so in between all this [the crisis difficulties] we opened fantastic new stores in Bahrain and Cyprus for example.
“We lost 25% of our staff but of those that remained we continued investing in them and making sure that for those who were travelling we continue to provide an exceptional customer experience. We also redefined our customer value proposition and we have invested in that, as well as launching an ESG strategy as well.”
Zarza described the crisis as “traumatic” for the travel retail industry but reported that Dufry has now reopened about 80% of its retail space worldwide. The number in Africa is higher, she revealed, with about 90% of space now open.
This, she said, is despite low vaccinations rate in many African countries, with some still below 10% of population vaccinated. “In Africa there is not a direct correlation between the vaccination rate and the recovery of passengers and sales. It’s clear that for those countries in Africa that have more regional inter-Africa traffic, the recovery has been much faster than those countries dependent on inter-continental travellers.
“Vaccination rate is not a direct KPI in Africa and it’s recovering faster than other regions. Sometimes the continent is not well perceived and not well recognised [for travel retail]. The recovery in Africa is promising and I continue thinking it’s a good continent [for Dufry].”
Chevalier also reported that recovery for Lagardère Travel Retail has been encouraging in the Middle East and Africa, a region which he said has shown “strong resilience”.
Considering why spend per passenger has been high in airport retail during the early recovery phase, Chevalier said: “What has changed the performance fundamentally is that when you have more employees than customers in the store, there is more sales intensity and that is probably driving spend per pax in Dubai and other airports worldwide.
“It doesn’t mean that what has been achieved over the past few months will be maintained; it’s hard to measure clear evolution. However, this spike in spend per pax worldwide is interesting to see when the footfall falls.”
Chevalier spoke of developing a richer, more intense airport retail customer experience that delivers systematically high percentage increases in spend per pax and suggested that the use of digital could help to drive that.
Cidambi agreed that the recent increases in spend per passenger and penetration has been partly because the shopping experience has been excellent with airport retail offering more space, allowing passengers to easily observe COVID protocols such as social distancing. He also said that retail staff are motivated more than ever as their numbers have had to be cut back.
But looking ahead, he said: “How much of this will transfer to the next phase as the passenger numbers go up is not clear, especially in relation to conditions at the airport.
“Already we are seeing as passenger volumes go up, that the time it takes to check in a passenger is increasing, queuing in the airport is increasing and the passengers have less time to shop. We will have to deal with the issue of congestion and we will have to deal with a potentially poorer passenger experience.”
Cidmabi also spoke of issues with getting products on to the shelves at the present time. He said: “The risk has moved from demand to supply and that will continue to be a problem next year. That is a reason why I am not so optimistic that the spend will recover [as we would like] – we have had iconic brands who have been out of stock for three weeks. In my entire history of working in DDF I don’t think I have experienced a situation like this. Those issues have to be dealt with.”
Bourienne pointed out that passengers’ increasing awareness of price in the digital age might lead to airport retailers having to think about moving towards a greater value proposition. “They [the passengers] know the price, they know the value. I think there is an opportunity on the retail side – especially if we don’t get the Chinese passengers back [in a short time frame] – is to go back to basics.
“I think we have moved away from price in duty free and I think it is time to invest a bit of money in the system to get the products cheaper, and be more competitive versus the High Street. We have seen with return of duty free in UK and it leads to big volumes. I think passengers are smart and if we invest [in value] the volume will come very quickly.”
Asked about priorities for Abu Dhabi Airports in the coming years, Bourienne said: “We will continue to diversify our income. We have a lot of land we need to develop, because we know we are not immune to this kind of crisis. We will only survive [in the face of crisis] because we have other sources of income, which we could use to reinvest to support our [commercial] partners.”
Dubai Duty Free Chief Operating Officer Ramesh Cidambi on recovery and brand relationships
We got some great insights and candid views from Dubai Duty Free Chief Operating Officer Ramesh Cidambi, as he discussed the recovery of the travel retailer’s business with Dermot Davitt.
He spoke about the pattern of reopening with Concourse A at Dubai International set to open soon, which means most of its space will be back trading once more. That has been accompanied by a rehiring of many staff that had to leave the business during the crisis.
Cidambi reported that penetration and spend per pax, which have been very high at various times during the crisis are “falling back towards the mean”. He said this was a pattern that Dubai Duty Free had expected.
He was asked about the impact of the loss of business to Dubai Duty Free from Chinese tourists and thoughts about that business eventually coming back. Cidambi noted that China was 4% of Dubai International Airport passengers and 17% of Dubai Duty Free business before the shut down in March of last year.
This loss of business, he said, has impacted some categories and individual brands more than others. “There are those that are impacted, I don’t deny that,” he said. “In a broad sense, we are fairly relaxed about the Chinese situation. And if they come back in the second half of next year, great. If it gets delayed more then a few brands might suffer.
“But in the grand scheme of things, it’s not a major business risk, and it is not something that we are losing sleep over at this point in time.”
Asked about brand relationships and the support they have given to Dubai Duty Free during the crisis period, Cidambi said: “We have seen brands behave differently in the last 18 months. Some brands supported us, some brands were neutral. Others didn’t do what we expected them to do. Some brands blamed the finance department, they blamed the head office, they blamed various people.
“As an organisation we bear no grudges and no ill will. And once the recovery has started we are happy to work with all the brands, but I think definitely each of the brands should reflect and introspect themselves.
“Dubai Duty Free met every promise that it has made, it has met every promise to its employees, it has met every promise to its partners – we never denied a single payment to a single supplier during the course of the crisis.
“[The brands need to ask] did we do enough to support Dubai Duty Free or not? And if as a brand, you look into your heart and you say we did the best that we could, fine. And if you think you didn’t, then let’s have you do better next year!”
Paying tribute to the Dubai Duty Free team, Cidambi said: “None of us should forget how dire things were in April and May of last year, because you had a health crisis and a business crisis overlaid with each other.
“And that’s why I keep saying… that the work that the team did last year, I will never forget it for the rest of my life.”
MEADFA Conference gets underway – President Sherif Toulan on industry recovery
MEADFA President Sherif Toulan has been on stage to kick off proceedings with a rallying for the return of travel retail business in the Middle East and Africa region.
“What matters is where we as an industry go from here; how we adapt our businesses to the new world in which we find ourselves,” he said.
“The pandemic has not changed the underlying positive dynamics that have driven travel in our region until now. The tourism sector is vital, to the economies of the Middle East and Africa, and will play a leading role in our resurgence.”
He added that what has been said about the pent-up desire to travel is “real”.
He continued: “Wherever travel restrictions have been lifted in the world, the resulting surge in bookings has been enough, to crash airline websites. Our customers are determined to travel again and we must be ready to welcome them… we must seize the opportunities that the gradual reopening of international travel is providing.”
Of the importance of the MEADFA Conference, he said: “This event has always been more than just a conference. It is about strengthening our network, renewing old friendships and creating new ones. This year, more than ever, we need this opportunity for dialogue.
“Our business model has been put under immense pressure; the ‘machine’ ground to a halt, and time and care is needed to get it up and running as before.
“That is why our gathering together this week, is so important. There is nothing like face-to-face dialogue to address problems, create solutions, and prepare for better times ahead.
“It is my fervent wish that our event this year, will provide the duty free and travel retail industry in the Middle East and Africa with a platform on which we reignite our business, and build our common future.”
Live coverage from Dubai – event preview
The MEADFA Conference kicked off with an opening cocktail at The Secret Garden at the Jumeirah Creekside
The Middle East & Africa Duty Free Association (MEADFA) hosts its regional conference this week in Dubai, after being cancelled in 2020 due to the pandemic. Over 400 delegates are registered, says MEADFA, a strong turnout and a signal of faith in the region’s future.
The event begins on Sunday night with the Opening Cocktail, before two days of conference sessions. That’s before one of the highlights of the social calendar in travel retail – the Dubai Duty Free Golf World Cup, which takes place on 24-25 November.
Our extensive coverage of travel retail in the Middle East extends across two publications: our November edition of The Moodie Davitt Magazine, and the Official MEADFA Guide, produced in association with MEADFA.
We bring you day by day coverage first of MEADFA and then of the Dubai Duty Free Golf World Cup over coming days.