Travelers are starting to fly again, offering some relief to beleaguered airport shops and restaurants after the pandemic brought most travel to a standstill.
Duty-free outlets and other airport stores have been a rare success story in the slumping bricks-and-mortar world in recent years. Airport retail enjoys a captive audience. Travelers often have time on their hands and can be susceptible to buying a souvenir or luxury product on a whim, or as last-minute presents. The shops are especially popular with Chinese tourists.
But the sharp decline in air travel last year pounded these operations, and airports around the world have reported that annual revenues shank by more than half last year. U.S. airport shops and restaurants stand to lose $3.4 billion from July 2020 to the end of 2021, according to estimates from the Airport Restaurant & Retail Association. That’s more than three years of profits.
Dubai International Airport retailer Dubai Duty Free, one of the world’s top duty-free operators, posted a 65% drop in 2020 revenue to $697 million from a record of $2.0 billion a year earlier, according to the Moodie Davitt Report, a travel retail-intelligence service provider.
The U.S. has also felt the pain. Longstanding retailers like Powell’s Books shut down at the Portland International Airport in July, while Gap Inc. said in October that it would close its doors at Philadelphia International Airport.