TFWA ASIA PACIFIC PREVIEW


Industry confronts challenges and grasps opportunities in the fast lane


to not only consider the Chinese volume traveller as there is plenty of potential elsewhere. For example, Japan continues


to develop and has opened up for foreign investment, plus there are the smaller markets, which I keep mentioning, such as Vietnam and Cambodia. These destinations are really beginning to live up to their early promise. Another market I’ve talked about a


Tax Free World Association (TFWA) President Erik Juul- Mortensen speaks exclusively to Claire Malcolm on key issues, opportunities and challenges in the Asia Pacific region. These include the threat posed by the WHO ITP on tobacco, the future of frictionless retail, and how region-wide infrastructure investment is helping to redefine the industry landscape.


Above: The TFWA Asia Pacific Exhibition and Conference returns to the Marina Bay Sands Expo and Convention Centre.


R


egional sales to travellers were up by 8.1% year-on- year in H1 2017 [Source:


Generation Research], with the opening of Incheon International Airport’s T2 and a significant uptick in Chinese, Japanese and Indian travellers at primary gateways auguring well for the future. What’s your take on Asia’s industry prospects in 2018 and beyond? A lot of extremely positive


things are happening and have happened already, not just in terms of infrastructure development – although that has been impressive.


“Another market I’ve talked about a lot is India, which is a sleeping giant for our industry.”


Erik Juul-Mortensen, President, TFWA


34 TRBUSINESS


If you look at Guangzhou in China as one example, Baiyun International Airport’s new terminal is set to become operational with capacity to handle up to 100 million passengers by 2025. It will be up there with Hong Kong International. Developments are not only


happening on the airport and retail front, with initiatives like the DFASS and Singapore Airlines joint venture leveraging both parties’ expertise to create a powerful new omni- channel retail experience. It will be very interesting to see this evolve and what I like is that it includes airlines, which are an integral part of our industry – something we must not forget. Turning to the China and South


Korea situation, this seems to have stabilised somewhat and if you look at travel patterns we are seeing vast numbers of Chinese travellers everywhere now, which is really great news. However, at the same time, we have to be careful


lot is India, which is a sleeping giant for our industry. There are lots more people travelling to and from India and a better duty free offering, so this is an area to watch out for in terms of development opportunity, especially when you consider the numbers of Indians now travelling for the first time.


Last year wasn’t without its own macroeconomic and geopolitical challenges, such as the China-South Korea stand-off.


is there light at


the


end of the tunnel? There’s plenty of reason for optimism, but we still need to be sure we evolve and adapt to the world around us. For instance, if you look at South Korea it is clearly going through a period of re-adjustment, and there’s evidence of the need for greater flexibility and understanding between stakeholders. There is also a reason to look at the business model we have been using for a long time. I’m not saying the model is broken


in any way, it perhaps just needs a rethink to be made more fit to today’s rapidly changing market; a greater level of acceptance and consideration from all sides – not least airport landlords – and understanding that things have got to be more balanced. Otherwise, as we are seeing


around the world currently, there are some retailers that are very unhappy and some brands – and I’ve stressed this before – that may reconsider their future in duty free. Central to all this is trust. We must


MAY 2018


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