HONG KONG. Hong Kong International Airport has reported revenue growth from retail licences and advertising of +10.3% to HK$7,523 million (US$967 million) for the 12 months ended 31 March 2016.
Airport Authority Hong Kong said the increased revenue was the result of better licence terms, passenger growth and retail promotion campaigns.
DFS operates the key duty free stores at the airport but its operations there have been under severe pressure due to extremely tough market conditions in Hong Kong, largely related to lower spending by Mainland Chinese.
Retail licences and advertising contributed nearly 40% of the increase in the airport’s total revenue for the year.
The airport company said other commercial revenue mainly came from income from leasing offices and airport lounges, as well as airlines and other tenants. This category grew +6.6% to HK$1,237 million (US$159 million), largely due to a property index adjustment in rental rates during the fiscal year.
Total revenue at the airport was up +11.1%, to HK$18,184 million (US$2,344 million).
The airport handled 69.7 million passengers and 410,000 flight movements during the year; new annual records in both categories. The totals represent year-on-year increases of +7.8% and +3.6% respectively.
Airport Authority Hong Kong Chief Executive Officer Fred Lam noted the impact of the 105,000sq m Midfield Concourse, which entered full operation in March 2016. He also highlighted the company’s ambitions to create a ‘smart airport’ and offer Sense of Place.
“As electronic retailing and mobile phones have transformed the retail industry, we are introducing proximity marketing that uses iBeacon technology to ‘push’ location-specific offers and information to travellers’ mobile devices,” he said.
“In the year ahead, we will continue to implement the iBeacon system and explore new business models that ensure the airport’s retail environment is compelling and relevant to travellers’ changing tastes.”
On Sense of Place, he commented: “As a global gateway, we have a powerful opportunity to promote our city’s unique culture and history. This year, we focused on creating a Sense of Place at [the airport] by introducing the ‘I Love Hong Kong’ retail zone. A range of local products — including festive food, local snacks and Chinese clothing — is available in the zone, giving passengers a chance to take home a piece of Hong Kong.”
