A recap of June CEETRA TR Forum
Speakers at the CEETRA Travel Retail Forum on June 29, discussed ways to overcome the challenging trading conditions of the last two years. Hosted by Central Eastern European Travel Retail Association (CEETRA), the event commenced with opening remarks by Chairman Andrzej Milaszewicz, Managing Director of Lagardèère Duty Free (Polska).
The forum was attended by representatives of airports, travel retail operators, brands and related service providers, as well as an impressive line-up of speakers.
During an emotional address, Dr. Vyacheslav Cheglatonyev, Chief Commercial Officer at Odesa Airport, reminded attendees of these turbulent times and that Ukraine was hailed as one of the top five countries in terms of post-COVID air traffic recovery only one year ago. Odesa International opened a new terminal in February of 2020, followed by an extension of its apron and a new runway. A 600-sqm retail space opened in February 2021, which is run by Dufry. At this time, it’s uncertain when and under what circumstances the airport can re-open.
Anna Marchesini, Business Development Director at m1nd-set, revealed survey data from Central Eastern Europe, showing that airport shop footfall in Q1 of this year remained the same, but conversion has decreased on a year-on-year basis. She explained that the motivation to shop is shifting: gifting has decreased (28%), while sharing with others has increased to 23% of all purchases. “Instead of value for money, convenience is now the number one driver to purchase, compared to pre-COVID levels,” she notes.
During his hands-on presentation, Christos Orthodoxou, Managing Director of Food & Beverages, SSP Hungary, covered digitalization, pre-order and reduction and sustainable habits. Turning to the impact of the pandemic, Orthodoxou said “the biggest scar is that there is a big shift among people from hospitality to other industries.” In order to motivate and reward staff, SSP Hungary combines advertising via POS and uniforms with rewards for the best performers on the floor, financed by local suppliers.
From a landlord’s perspective, Pawel Galiak, Chief Commercial Officer at Kraków Airport, pointed out that there is no other way forward than partnership. During the crisis, the airport abolished minimum guaranteed rents and linked retail concession fees to passenger numbers. This ensured the market’s confidence – just ahead of an RFP for commercial space, which was launched in December 2021.
The director expects that the industry will yet again prove its resilience to external shocks. Obstacles to a fast recovery include staff issues, inflationary pressure and the threat of new variants of COVID.
Julie Lassaigne, Secretary General of ETRC – European Travel Retail Confederation (ETRC), updated attendees on the arrivals duty free campaign. Building on the high level of engagement with EU and member state policymakers, Lassaigne was pleased to see the launch of a formal study on VAT rules applicable to Travel and Tourism sectors, which will also assess opportunities to allow duty and tax free shops on arrival in the EU. This study is part of the EU VAT Tourism package, which will be published by the European Commission next year to support the recovery of the sector post pandemic. ETRC has now launched a new campaign aiming to ensure industry contribution to the study, momentum for a legislative process to be launched and engagement with members states once the decision process starts.