ICELAND. The weather is bitterly cold but the welcome has been full of Icelandic warmth at the ACI Airport Commercial & Retail Conference being held in Reykjavik this week. The annual event has drawn an audience of around 350 delegates to the Icelandic capital.

The event, hosted by airport authority Isavia, is being held in the magnificent Harpa conference centre and concert hall (pictured below).

In a land blessed with so many of nature’s gifts, Harpa is a great manmade landmark. Sitting right by the picturesque Reykjavík harbour, it offers sublime views of the surrounding mountains and the North Atlantic Ocean. The building features a wonderful glass façade inspired by the basalt landscape of Iceland.

This year’s event is themed, somewhat dramatically, ‘Adapt or Die’ – a reference to key external influences from falling spend per passenger to digital disruption that is threatening traditional sectors such as duty free retail.

The event kicked off on Monday night with a welcome reception hosted by airport authority Isavia at Whales of Iceland, a remarkable exhibition and event space featuring life-sized models, an interactive installation and virtual reality experience.

Martin Moodie with Isavia Commercial Manager Gunnhildur Erla Vilbergsdóttir, who delivered a compelling presentation on commercial developments at Keflavik Airport during the conference.

After the weekend’s rugby result, maybe one shouldn’t have mentioned whales to an Irishman. Martin Moodie with Dufry Global Head of Business Development Denis Hourigan.

The conference and exhibition began Tuesday, featuring a packed and provocative programme that addressed both the opportunities and threats emerging from a market going through rapid change.

Positives ranging from a sustained growth in passenger traffic to a willingness to engage the shopper/diner throughout the traveller journey were balanced by well-articulated concerns over a softening of spend per passenger in certain sectors (notably duty free) and the threat from digital disruptors and external ecommerce providers.

Isavia CEO Björn Óli Hauksson welcomed delegates to Reykjavik and spelled out the importance of commercial revenues to the airport company. With airlines under ever greater financial pressure, their ability to pay landing charges will be increasingly compromised, underlining the need for airports to grow non-aeronautical income.

Thorgerdur Thrainsdottir proved just as adept at being an MC as she is at running airport duty free operations.

Minister of Tourism, Industry and Innovation Þórdís Kolbrún R. Gylfadóttir picked up on the Darwinian theme of the conference, ‘Adapt or Die’, and explained how the country had fought back from economic catastrophe.

Traffic up, non-aeronautical revenues up, but per-passenger spending down in many cases. ACI Europe Director General Olivier Jankovec spelled out the opportunities and challenges faced by European airports during a typically articulate and challenging address.

ACI Europe Commercial Forum Chair (and Senior Manager, Commercial and Business Development, Hermes Airport in Cyprus) Elias Liolios rammed home the message of how vital non-aeronautical revenues had become to the aviation sector.

European Travel Retail Confederation (ETRC) Secretary General Julie Lassaigne spelled out the pressing legislative challenges facing the sector and called for industry-wide unity in confronting them.

Next up was a marvellous address by Ragnheiður Elín Árnadóttir, former Minister of Industry and Commerce & Chairman of the Board at Duty Free Iceland. In one of the best addresses you’re likely to hear at an industry conference, she detailed evocatively how Iceland had been “the canary in the mine” in 20018 before the country’s and the world’s economic crisis of 2008-09. Natural catastrophe would follow in the form of the 2010 volcanic eruptions of Eyjafjallajökull (pictured below). Árnadóttir detailed how the country had battled back from the brink, with tourism playing a pivotal role.

Another compelling presentation, this time from Retail Analyst, Author & Founder of NBK Retail Natalie Berg. “What we’re seeing now is retail Darwinism,” she said. Too much retail is “overspaced and with questionable relevance,” she noted. But while noting the intense and growing competition from ecommerce, she argued that physical retail still has a bright future, provided it maintains relevance, and maximises the experiential. Amazon is not killing retail, she argued but killing mediocre retail.

Lagardère Travel Retail Chief Operating Officer – Europe, Middle East & Africa Frédéric Chevalier brought a unique sense of place to the panel he chaired by wearing the apron of his company’s acclaimed Loksins bar at Keflavik Airport. Chevalier led a very strong panel comprising m1nd-set CEO Peter Mohn; Moodie Insights General Manager Craig Mackie and Nestlé International Travel Retail General Manager Stewart Dryburgh.

Confectionery and fine food sales in travel retail can double to US$10 billion in ten years, according to Nestlé International Travel Retail (NITR). General Manager Stewart Dryburgh released details of the company’s updated vision for the category, following a major research project. “This ground-breaking research provides a platform for everyone involved in the category: brand owners, retailers and airports. We look forward to bringing this to life with our retail partners and reigniting category growth.”

Moodie Insights General Manager Craig Mackie spoke about the value of data analytics. He presented an intriguing case study of work Moodie Insights is doing with a retailer at Changi Airport, and highlighted how a better understanding of variations in passenger and customer profile at different times of the day can impact promotions, signage, staffing and sales.

m1nd-set CEO Peter Mohn presented a highly detailed scientific look at statistical evidence of the performance of European airport retail.

The Moodie Davitt Report Founder & Chairman Martin Moodie led a strong panel discussion entitled (somewhat wordily) ‘The competitive problem is also the solution: Harnessing digital disruption in the cause of maintaining the physical airport store.’

In his opening remarks, Moodie cautioned: “I do believe we should probably avoid the hyperbole of statements like ‘Adapt or die’ and talking about ‘the solution’. This business will not die unless it absolutely stands still and I see no evidence of that from the players in this room. Nor is digital disruption ‘the solution’. Or not all of it. It is a key part of the necessarily rapid evolution of this sector in the face of even more rapidly changing circumstances. The convergence, the fusion of humanisation and digitalisation, of experience and technology, is, I believe the right road map for this business and one that is increasingly being followed.”

The panel featured strong presentations from Dr Patrick Bohl, Head of Retail and Advertising, Budapest Airport; Melvin Broekaart, Founder and Managing Director Global, Aircommerce; Kian Gould, Founder and CEO, AOE; Gunnhildur Erla Vilbergsdóttir, Commercial Manager, Isavia; Danielle Neben, Marketing Director, ePassi Iceland; and Neil Muir, Managing Director, Blynk. More details on all sessions to follow.

Martin Moodie: “The convergence of humanisation and digitalisation, of experience and technology, is, I believe, the right road map for this business and one that is increasingly being followed.”

Dr Patrick Bohl, Head of Retail and Advertising, Budapest Airport, spoke about the pioneering BARTA initiative at Budapest Airport, a programme that involves collaboration between airport, airline, F&B operators, retailers and technology providers.

AOE Founder & CEO Kian Gould outlined the new concept of automating tax refunds at Auckland Airport. Could this be a game-changer for the travel retail consumer experience, he asked during a typically challenging address.

As Isavia gears up for a major expansion of Keflavik Airport, Commercial Manager Gunnhildur Erla Vilbergsdóttir spoke of the rising importance of Chinese consumers and how a recent Lunar New Year promotion had generated spectacular results.

The final session of the day focused on challenges facing the car parking sector, a key component of airport commercial revenues. It was led by Avinor Group Commercial Director Per Rune Lunderby (standing) who was joined by Cardiff University Professor Peter Wells; Swedavia Head of Parking, Entry and Mobility Vita Andrews; Fraport Senior Vice President Parking Management and Landside Traffic Operations Gerald Krebs; Finavia Director Commercial Services Jukka Isomaki; and Marco Polo Park – Gruppo Save CEO Gaetano Trapanese.

The Gala dinner, hosted by Lagardère Travel Retail last night, was held at the Reykjavik Modern Art museum, an ideal location to convey the sense of place that has made this week’s event so memorable.

The conference concludes today.

Lagardére Travel Retail Iceland CEO Sigurður (‘Siggy’) Skagfjörð Sigurðsson welcomed guests to a memorable evening hosted by the company at the Reykjavik Modern Art museum.

Martin Moodie and Juan Carlos Muria of AENA.

Martin Moodie with Kristín Jóhannsdóttir (right) of Lagardère Travel Retail Iceland and Vanessa Miremont of Lagardère Travel Retail HQ in Paris.

The evening was played out against a backdrop of Iceland’s stunning natural wonders.