AMERICAS. Welcome to our day-by-day coverage of the Summit of the Americas in Palm Beach, Florida. The show makes a welcome return as an in-person event after a two-year absence due to the pandemic. The Moodie Davitt Report team is delighted to support the IAADFS-organised conference and exhibition, which runs from Sunday to Wednesday afternoon.
Our rolling coverage features our choice of the week’s highlights in words and images.
WEDNESDAY 13 APRIL
Summit of the Americas organiser IAADFS said today that registered delegate numbers of 878 at this week’s event were “ahead of expectations” despite being well down on previous years. President & CEO Michael Payne told a media briefing that he was happy with the turnout against the backdrop of uncertainty caused by COVID-19, as the in-person event returned after an absence of two years.
Within the overall number, 269 guests were buyers, which Payne said represented a “good ratio”, with 156 of these non-members of IAADFS. Among overall visitors, 43% came from outside North America.
Payne said: “The feedback we have had so far has been positive. We have commitments from many exhibitors to return next year. Other suppliers attended as non-exhibitors and we hope many of those will return as exhibitors.”
On the key areas of focus for 2023, Payne said: “We need to decide whether we create a full exhibition trade floor or maintain the format of booths that we had this year. Some people want a hall, others liked what we had this year. It wasn’t our aim to fill a big hall this year. We were aware of the difficulties of doing that with many companies operating with cost constraints. We will evaluate how that looks for next year.”
With liquor companies dominating participation, Payne also addressed the under-representation of P&C among exhibitors. “We want the beauty houses here and they should be here to support the event. Some came as visitors this time. It’s not easy to convince them to take space under this format but we are working on it.”
On other priorities for 2023 when the event returns to Palm Beach [this is the first year of a three-year contract], Payne said: “We will discuss the conference content, and whether we want as many sessions [the later sessions on Tuesday in particular were not well attended -Ed]. We will look at the F&B offerings in the venue and how we can improve availability. We offered breakfast which was well received. We will look at what more we can do.”
On the social side, he said the informal, outdoor evening cocktail gatherings were popular. There was no gala dinner, with Payne saying he doubted whether the association would host one in future. “We will assess what people want but my sense is that many people don’t want to return to a formal gala event, plus there are cost considerations. We will survey delegates on all of these issues in coming weeks as we prepare for 2023.”
TUESDAY 12 APRIL
IAADFS Chair René Riedi (above left) addresses some of the important regulatory issues facing the industry in a session on Tuesday afternoon. It was hosted by Hume Brophy Partner John Hume, with input from Pernod Ricard Global Travel Retail Regional Director Greg Ford and Duty Free World Council Senior Counsel Ricardo Oliveira.
They addressed themes that included track-and-trace on tobacco in duty free, arrivals duty free, the battle to extend allowances and ecommerce in the channel.
TRBusiness and m1nd-set hosted the TR Consumer Forum on the second day of the Summit of the Americas. In the session, M1nd-set CEO Peter Mohn presented the biggest consumer trends affecting the Americas travel retail industry now and in the future.
Some of the future trends Mohn highlighted include digitalisation, omnichannel, social commerce and the continued importance of personal healthcare and sustainability.
Mohn’s presentation was followed by a panel discussion moderated by TRBusiness Managing Editor Luke Barras-Hill.
The panel comprised Dufry South America Sub Cluster General Manager Enrique Urioste, Pernod Ricard Americas Travel Retail Senior Marketing Manager Tamara Riley, LXR Chief Revenue Officer Laura Swan and Tito’s Handmade Vodka International Managing Director John McDonnell.
An illuminating session on the recovery of the channel in Latin America took place at the Summit of the Americas on Tuesday morning. It was led by ASUTIL Secretary-General José Luis Donagaray, with speakers including ASUTIL President and Dufry Chief Operating Officer for South America Gustavo Fagundes and Dufry General Manager Sub-Cluster South America Enrique Urioste.
Fagundes offered insights into the patterns of trading in 2022 to date, citing a younger traveller demographic and greater use of online (reserve and collect and home delivery as a proportion of sales have risen sharply, notably in Brazil). Alcohol, electronics and high-end watches have performed strongly, with spend per passenger now more than double what it was in 2019, though from a much reduced traveller base.
Sales have been aided by increased allowances introduced in 2020 and 2021, both at airports and in the land border business.
Urioste explained a recent change in Argentina that will boost the business. New regulations permit online duty free sales with collection on arrival at the airport, which was not part of the duty free regime previously.
ASUTIL is also working to further boost allowances. In Uruguay it is discussing with government the opportunity for travellers to purchase duty free up to ten days after their journey, though no agreement has yet been reached.
More on this story to follow shortly.
MONDAY 11 APRIL
WiTR presents The Future of Work
Women in Travel Retail (WiTR) hosted a panel discussion which explored how businesses are adapting for the future of work. The panel comprised of Miami-based Executive Coach Noella Vincent, Aer Rianta International General Manager and North America Director Jackie McDonagh and Essence Corp Vice President Patricia Bona. It was moderated by Travel Markets Insider Editor & Publisher Lois Pasternak. The panel represented the only three women speakers at the Summit of the Americas, a figure highlighted by Bona.
The session explored themes that were particularly relevant for women in the travel industry including the shift to work from home as well as the impact of technology to both human productivity and the social aspect of work.
Commenting on the perceived difference between men and women home workers, Bona said: “Human resources has become the department of being and belonging. 80% of women will request working from home, but there is this impression that the woman is the weaker employee when she works from home because she has other priorities. Human resources have to be very careful. Women who work from home or ask for flexibility are perceived as not focused or easily distracted.”
Giving the retailer view on the future of work, McDonagh said: “The last two years has identified challenges, opportunities and pillars of wellbeing that has had both negative and positive effects in all matters of life. We need to get to a stage where people feel included to have that zoom, work from home – no matter what that their gender is. If we get the balance right, this new hybrid way of working could work extremely well.”
‘Towards a New Normal for Airport Concessions’
The Moodie Davitt Report President & Editorial Director Dermot Davitt moderated an engaging first panel discussion at the Summit of the Americas, called ‘Towards a new Normal for Airport Concessions’. It was organised in association with the Airport Restaurant & Retail Association (ARRA).
Speakers included Dallas Fort Worth International Airport Executive Vice President of Customer Experience & Revenue Management Ken Buchanan, ARRA Executive Director Andrew Weddig, Hudson CEO Jordi Martin-Consuegra and Lagardère Travel Retail COO Americas Jean-Baptiste Morin.
Opening the session, Davitt said: “The wider aviation and tourism is still on rebuilding mode. The industry isn’t going to bounce back fully until we collectively evolve the business model and ensure that the financial model is stable and resilient.”
Weddig gave an overview of travel retail’s journey in the last two years, from the early shutdown of 2020 to the slow and uneven recovery of 2021 and 2022 so far. Offering his insight into where the industry goes from here, Weddig said: “We can’t go back to normal. The pre-pandemic model has fractures and the pandemic exposed them. We need to adapt to the new normal and become more sustainable and more resilient.
“This can take the form of new capital structures, contract structures and brand structures. Travellers aren’t captive consumers anymore – they need to be captured. We’re building a customer-centric concessions industry that can meet customer needs and is flexible, innovative and agile.”
Offering the airport view on the labour challenges currently faced by the industry, Dallas Fort Worth International Airport Executive Vice President of Customer Experience & Revenue Management Ken Buchanan said: “We have adopted a higher purpose as an airport. We are responsible for 300,000 jobs and it’s our responsibility to keep this economic engine going. Our strategy goes a lot deeper than the commercial aspect; it’s about creating jobs and economic empowerment for our community.”
Giving his outlook on DFW Airport’s recovery, Buchanan added. “We’re 90% back to 2019 levels and in this period from spring to summer, we will exceed those levels. We’re averaging 200,000 travellers at our airport today and we need to be able to serve them properly.
“Labour challenges can’t be the excuse as to why we can’t serve the experience we want for our customers. Higher wages, benefits and an exciting work environment – that’s all part of the new normal.”
That same positive outlook was shared by Hudson CEO Jordi Martin-Consuegra who said that Hudson is now operating 90% of its previous store portfolio in North America. He said, “There is extraordinary recovery in travel retail. Convenience and food are recovering ahead of the trend, with duty free soon to follow.
“Despite the hiccup of Omicron, we have seen business travel come back too. This time has allowed us to focus on growth, innovation and collaboration. We have an international transformation programme that addresses the challenges we identified during the pandemic together.”
One of the key themes of the discussion was how the Trinity can move beyond the traditional fixed rent and MAG model. Lagardère Travel Retail COO Americas Jean-Baptiste Morin shared his thoughts on the retailer’s innovative new profit-sharing partnership with Lima Airport Partners.
“We asked, ‘how do we collectively grow the pie, rather than share a shrinking pie?’ Potentially, the traditional revenue share model was making access to the airport concession business unsustainable. So, we looked at how we could change that. We looked at different ways to generate revenue together, which isn’t possible if all you are thinking about is getting your minimum fixed margins. We had the opportunity to reset everything. Our idea was to work together and not be limited by the rent structure in our commercial offer.”
Lagardère Travel Retail Chairman & CEO Dag Rasmussen was the first keynote speaker of the Summit of the Americas.
During his speech, he highlighted the resilience of the travel retail industry and outlined why it is “the flagship environment to bring brands to life.” He also underlined the need for more dynamic partnerships and adaptability to changing consumer trends.
“Uncertainty is the now the name of the game,” Rasmussen said. “However, there are several challenges we need to address to secure sustainable and profitable growth. We are leaving the crisis with the conviction that we have the right structure to rebound and secure long-term growth.”
In the last two years, Lagardère Travel Retail expanded into seven new countries and struck several strategic joint-venture partnerships. This includes a major ecommerce partnership with JD.com in China, HWH Investments in the Middle East and an innovative new profit-sharing partnership with Lima Airport Partners.
Concluding, Rasmussen said: “Our industry has all it takes to rebound quickly and strongly in this crisis. It may not be the same in scale and length across all players, but our resilience is amazing. I am confident in our ability to join forces and build a stronger future together.”
IAADFS President René Riedi officially opened the 2022 Summit of the Americas with an address that outlined the opportunities and challenges facing Americas travel retail — and why there is reason for optimism.
Some of the opportunities he highlighted include the growth of ecommerce, the rebound of cruise and the digitalisation of retail. He also discussed the threats to the region’s recovery. This includes the environmental impact of the aviation industry and fixed rents and guaranteed minimum business models.
In addition, Riedi underlined the key role that organisations like IAADFS play in bringing the industry together in times of crisis. “COVID-19 has showed that this association is not just here to organise great shows,” he said. “We have collaborated with many industry stakeholders to work together and support our members and the industry. We have raised US$900 million worth of aid and relief from the US government to help support the travel retail community in the Americas. This support underscores the critical role that travel retail plays in the wider aviation and travel industry.
Riedi added, “We need to reimagine and reinvent how travel retail welcomes back customers, whether that’s in land sea and air.”
SUNDAY 10 APRIL
A reminder that the Airport Restaurant & Retail Association (ARRA) and The Moodie Davitt Report are jointly organising a key conference session at the Summit of the Americas. It promises to be among the highlights of day one on Monday 11 April.
The session theme is ‘Towards a new normal for airport concessions’ and speakers will address how our industry can journey forward from the uncertainty of today towards a more prosperous, partnership-led future.
Panellists include Dallas Fort Worth International Airport Executive Vice President of Customer Experience & Revenue Management Ken Buchanan; Hudson CEO Jordi Martin-Consuegra; Lagardère Travel Retail COO Americas Jean-Baptiste Morin and ARRA Executive Director Andrew Weddig. The session will be chaired by The Moodie Davitt Report President Dermot Davitt.
A key topic will be how airport concessionaires can recover from the challenges of the past two years. The pandemic has forced many changes in the industry, some of which exposed fractures in the business model that were emerging pre-crisis. The discussion will home in on how travel retail’s financial structure can and should evolve to become more sustainable and resilient.
The 90-minute session follows the keynote address, which will be delivered by Lagardère Travel Retail Chairman and Chief Executive Officer Dag Rasmussen.