{"id":125025,"date":"2025-03-10T21:32:46","date_gmt":"2025-03-10T21:32:46","guid":{"rendered":"https:\/\/peraltafinancing.com\/aerospace\/how-are-airports-capitalising-on-the-growing-luxury-retail-market\/"},"modified":"2025-03-10T21:32:46","modified_gmt":"2025-03-10T21:32:46","slug":"how-are-airports-capitalising-on-the-growing-luxury-retail-market","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=125025","title":{"rendered":"How are airports capitalising on the growing luxury retail\u00a0market?"},"content":{"rendered":"


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Louis Vuitton\u2019s Le Caf\u00e9 by Cyril Lignac at Heathrow Airport seeks to offer an \u201cimmersive experience\u201d blending luxury, art de vivre and hospitality. Credit: LVMH <\/figcaption><\/figure>\n<\/p><\/div>\n

As the aviation industry continues to celebrate strong post-covid growth in passenger numbers, it is no surprise that airport retailers would be seeing similar rises in their revenues, with the travel retail market valued at $66.3bn in 2023 and projected to soar to $145.6bn by 2032,\u00a0according to Fortune Business Insight.<\/a>\u00a0<\/p>\n

The luxury retail sector in particular is seeing significant success in the airport industry, with high-end brands capitalising on their long-standing relationship with air travellers and a wider interest in luxury goods.\u00a0<\/p>\n

This growth appears set to continue over the next decade as well with\u00a0GlobalData<\/a>\u00a0forecasting the global luxury retail market to grow at a CAGR of more than 6% between 2023 and 2028, and numerous airports explicitly focusing on expanding their luxury retail offerings.<\/p>\n

\u201cSignificant growth potential\u201d<\/h2>\n

One such airport, Amsterdam\u2019s Schiphol Airport, announced last year that the upgrade of its Lounge 2 terminal would include the arrival of new luxury brands to the airport, as it sought to bring its retail space in line with other global hubs and meet passenger demands.\u00a0<\/p>\n

\u201cWhen you look at the airports around us, the availability of luxury retail is significantly larger than at Schiphol,\u201d an airport spokesperson tells Airport Industry Review.\u00a0<\/p>\n

\u201cIn conversations with store staff on the sales floor, they repeatedly shared that they often got questions about where the stores of other luxury brands were, which were not present yet at Schiphol. Combined with an extensive analysis of the efficiency of our retail space, this helped us to confirm luxury retail has significant growth potential.\u201d<\/p>\n

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Luxury retail has significant growth\u00a0potential.<\/strong><\/p>\n<\/blockquote>\n

The investment into luxury brands saw two industry giants open new outlets at Lounge 2 in 2023, with Bulgari and Louis Vuitton joining existing stores from major brands including Gucci, Rolex, and Hermes.\u00a0<\/p>\n

The opening of the Bulgari store also gave a glimpse into the perceived benefits for travellers of buying luxury goods at the airport, with Bulgari\u2019s managing director of Northern Europe, Bart de Boever, stating that the new outlet would entice buyers by creating \u201ca memorable experience for travellers\u201d.<\/p>\n

Replacing the high-street?<\/h2>\n

This sentiment is echoed by aviation historian Professor Dan Bubb, who says that airport outlets now provide people the increasingly rarer chance to get up close to goods before they spend large amounts on a purchase.\u00a0<\/p>\n

\u201cHaving the chance to shop in high-end shops in airports (in a safe environment) brings back that familiar experience of shopping in brick and mortar stores,\u201d He says.\u00a0<\/p>\n

The airport sector\u2019s ability to provide an experience no longer seen on high streets can also be seen when its success with luxury retail growth is compared to the decline of certain high-end department stores around the world.\u00a0<\/p>\n

In the UK, the centuries-old Debenhams closed all of its remaining 118 physical stores in 2021 and similar brands, such as Jelmoli in Switzerland, have faced the same fate elsewhere as consumers largely move their spending online.\u00a0<\/p>\n

With many remaining department stores also seeing in a decline in their sales, it could soon be the case that airports become the most accessible place to explore multiple luxury brands at once for many passengers.<\/p>\n

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Schiphol welcomed new stores from Bulgari and Louis Vuitton to its Lounge 2 terminal in 2024 as it sought to keep up with passenger demands for luxury retail offerings. Credit:\u00a0Royal Schiphol\u00a0Group<\/figcaption><\/figure>\n

The uniqueness of an airport-based luxury outlet also often extends to the goods on offer, with many brands seeing the benefits of providing an \u201cairport-exclusive\u201d product.\u00a0\u00a0<\/p>\n

\u201cSome goods might be available in airports that travellers are unable to purchase in a brick and mortar store, or even online,\u201d Bubb says, \u201cAirport shops are the perfect place to beta-test products to see which ones are popular, and which ones are not.\u201d\u00a0<\/p>\n

This avenue has already been recognised by airports themselves as well, with Heathrow Airport telling Airport Technology<\/em> that it was using exclusivity to attract luxury buyers amid challenges to the travel retail sector.\u00a0<\/p>\n

\u201cWhile the removal of tax-free shopping has made it harder for retailers in the UK to compete on price alone, we can offer a retail experience that\u2019s exclusively Heathrow,\u201d the spokesperson says.\u00a0<\/p>\n

\u201cFrom our dedicated team of Personal Shoppers, to \u2018only at Heathrow\u2019 items, and the country\u2019s first ever Louis Vuitton caf\u00e9, we\u2019re working with our retail partners to maintain the magic of luxury airport shopping.\u201d<\/p>\n

A premium retail experience<\/h2>\n

Heathrow\u2019s Louis Vuitton caf\u00e9 particularly highlights the benefits of using exclusivity to drive the growth of luxury retail, with the fashion house describing the hybrid store-caf\u00e9 as an \u201cimmersive\u201d blend of fashion and \u201cart de vivre\u201d designed to enhance the travel experience for its visitors.\u00a0<\/p>\n

Other European airports have also taken advantage of the chance to offer a unique experience with Rome\u2019s Fiumicino airport featuring a Bulgari outlet offering services such as bottle engraving and custom gift wrapping to \u201cenrich the transportive ambiance of the space\u201d.\u00a0<\/p>\n

Schiphol also says this growing desire from luxury brands to reach international passengers has supported its efforts to embrace high-end outlets.\u00a0\u00a0<\/p>\n

\u201cWhen we were sharing our strategy and plans with the luxury industry, and showing the units we are creating, they responded all very positively,\u201d an airport spokesperson says.\u00a0<\/p>\n

\u201cLuxury brands understand the importance of Schiphol as a key airport in the global network and also recognise the relevance of the passenger profiles travelling through Schiphol.\u201d<\/p>\n

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Airports have been adding more luxury outlets to their retail spaces as they seek to capitalise on a growing market. Credit: Abu Dhabi Airports<\/figcaption><\/figure>\n

The move to create a unique experience comes as the major European airports follow the lead of their Asian counterparts, such as Abu Dhabi\u2019s Zayed International and Singapore\u2019s Changi Airport, in positioning the airport as a luxury destination itself, with the Asia-Pacific region dominating the travel retail market at just under 50% of its global valuation\u00a0<\/p>\n

Recently, the UAE capital\u2019s airport used the opening of its Terminal A building in 2023 as an opportunity to attract a variety of big-name high-end brands, putting luxury outlets from Omega, Coach, and Herm\u00e8s next to mid-range shops such as WH Smith and Bath and Body Works.\u00a0<\/p>\n

Its efforts exemplify the attitude of the region towards the luxury travel sector with Middle Eastern and Asian airports making up half of those on a list of the\u00a020 airports offering the best luxury experience<\/a>\u00a0released by AllClear Travel Insurance in 2024, which put Dubai International at the top, though only just beating out London Heathrow.\u00a0<\/p>\n

As global airports continue to jostle for the attention of luxury-focussed travellers wanting to \u201cfully immerse themselves in an experience\u201d, Bubb suggests the winners will be those who are willing to adapt.\u00a0<\/p>\n

\u201cSome people are very loyal to specific brands, so they will take advantage of being able to shop and spend time in a lounge that was designed by a luxury retailer,\u201d he says.\u00a0<\/p>\n

\u201cTo achieve all of this, airports must keep up with travellers\u2019 tastes, among which include affluent travellers who expect to see luxury retailers in airports.\u201d<\/p>\n

This article was originally published in our digital magazine\u00a0<\/em>Airport Industry Review<\/a>. You can\u00a0subscribe here<\/a>\u00a0for free.<\/em><\/strong><\/p>\n

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