INTERNATIONAL. TFWA President Jaya Singh has said that the current crisis represents an opportunity to rethink the industry business model, adding recovery will require deeper partnerships among all stakeholders.
Speaking on day two of the ETRC Business Forum today, Singh said: “Partnership is not about short termism or chasing market share above all else. We cannot think small. This is an opportunity to rethink our business and serve the people who shop with us. They will return in large numbers and they will overcome the challenges of travel, and they will have different, more sophisticated needs.
“Given the financial hit to our industry, it is understandable that budgets are constrained. But now innovation is more urgent that ever. We must do more with less. That requires mutual understanding of our respective aims and of the customer that we all serve.”
Assessing whether the prevailing business model is fit for purpose, Singh said, “Retaining Minimum Annual Guarantees cannot be the right approach. MAGs will only increase debt burdens that we face. In the past this industry’s model was based on MAGs, or a fixed cost to operators and a source of fixed income for the airport. Redressing the balance means shifting from fixed to variable. We can only do this together. We need an aggregation of stakeholders, of partners, aggregation to drive scale, aggregation of potential touchpoints. We cannot work in silos to realise a future that we know is bright.”
Singh also looked ahead to TFWA events announced for 2021, noting that these would require fresh thinking and flexibility.
“For TFWA, 2020 was a year of immense frustration but the team managed by my predecessor Alain Maingreaud was able to steady the ship and prepare for the rebound that we are confident will begin this year. We will hold a Special Edition of our TFWA Asia Pacific event in May in Hainan. It will not be based on stands as you traditionally see in Singapore and Cannes.
“It will instead offer brands the opportunity to hold private business meetings in hotel suites in a world-class venue near some of the biggest points of sale in our industry. We have had a positive response from brands and retailers to this project. We will share more details in the days and weeks ahead.
“We know that face to face events must necessarily offer the option to take part from distance. But our members and partners have said that they are desperate to meet face to face again. We believe Hainan offers the best chance to achieve this in a cost-effective way.
“We also look ahead TFWA World Exhibition in Cannes in September, which we hope will take place once international travel is up and running again. We are confident it will be the opportunity for which we are all desperate to gather.
“We know that not everyone will be able to join us, notably those who have lost their positions, good people who have given much to our industry. We spare a thought for them.
“I conclude by reminding you of the TFWA motto: ‘By the trade, for the trade’ is our guiding principle. We will continue to provide a platform for duty free & travel retail to prosper.”
*Jaya Singh was speaking as part of a panel of brand owners to discuss the future of the travel retail sector post-crisis. Click here for other highlights from that session.
The ETRC Business Forum drew participation from 350+ attendees across the European duty free and travel retail channel on 20 and 21 January.
