LEADING ASPAC OPERATORS: LAGARDÈRE TRAVEL RETAIL “We definitely see a big
improvement in the overall situation. Traffic, to be clear, is not close to where it was pre-crisis, but the trend is positive. “There is definitely a big effort
on behalf of the central and local government to get the economy back in gear and return to normal life. Precautions remain in place to avoid a resurgence of the pandemic and of course consumer confidence is not back to how it was. The return to normality is a gradual process.” Acknowledging the difficulty
of making accurate projections, especially on the fortunes of China as a result of the crisis, Fabre said: “Obviously, the economy will be challenged on business and consumer confidence for the rest of the year, but economic stimulus measures will be implemented to help it get back on its feet. These things, however, do take time. “China is a trade-dependent
economy, so the rest of the global economy being so badly affected will have a knock-on effect on a lot of industries, jobs and ultimately consumers’ ability to spend in China. Despite everything though, I remain optimistic.”
Uptick in domestic traffic In China, the focus for Lagardère is completely on the domestic duty paid business, as foreign companies are not currently permitted to operate duty free stores in China. At the time of writing, a resurgence
in domestic travel across China had begun, albeit very gradually. According to data from Air4casts
circulated on 14 April, domestic traffic at Guangzhou Baiyun International Airport was down 68% in March 2020 compared with the same month in 2019. However, in February there was a
drop of 84% compared to the same month last year, so there was a clear
improvement between
February and March. Domestic traffic through Haikou
Meilan International Airport is also improving. In March 2020, there was a 69% drop in domestic passengers compared with March 2019, but in February 2020, the drop was a whopping 85% compared with the
MAY 2020
previous year. Fabre himself said that he has
definitely noticed ‘a pick-up’ in Chinese domestic traffic. “Flights which were cancelled have
been re-instated and the load factor is slowly increasing. Business travel, however, remains quite subdued. “Customers who do not want to
travel overseas due to the perception that other countries have not handled the crisis as effectively as China, for example, will probably turn their attention back to domestic travel. This will definitely be a positive trend for our Chinese business.”
Concession fee discussions Looking at the bigger picture, the speed of recovery in general varies between airports. “Some airports are accelerating
faster than others,” said Fabre. “It is a mixed picture. The overall trend is that of recovery and there is some confidence that the worst [of the crisis] is behind us and that things are looking up.” Fabre said that Lagardère’s
airport partners have been extremely supportive and that they acted decisively during this turbulent period. “In China specifically, our airports
have been very supportive and quick to act,” said Fabre. “For that, I am extremely grateful. “They really did the right thing
and quickly. Now, things will become more difficult as traffic has not fully recovered. Many airports are experiencing difficult financial situations of their own. “There will definitely be further
discussions in the months ahead on issues such as concession fees.” One positive for Lagardère was its
“Obviously, the economy will be challenged on business and consumer confidence for the rest of the year, but economic stimulus measures will be implemented to help it get back on its feet.”
Eudes Fabre, CEO, North Asia, Lagardère Travel Retail
ability to continue serving customers through its Boulevard du Luxe loyalty programme, while its Chinese stores were closed. “We are lucky to have our established customer
loyalty
programme with over 1.5 million members in China. “This has enabled us to serve
members throughout the crisis, make home deliveries and interact with our loyal customers. “This is one of the reasons our
business has come out in pretty good shape. This platform is a key strength and big differentiator. “Even when our customers
couldn’t physically make it to the airport, they were able to appreciate our personal service.” Outlining the company’s objective
for the Chinese business in the second half of the year, Fabre continued: “We aim to regain what we lost in the first half; I don’t know if this is possible, but we will definitely do our best. “We are holding discussions with
our brand partners to support that ambition. “Currently, there are many
vendors, especially those offering, luxury, fashion and cosmetics, which are unable to deliver on time due to production issues.” «
Eudes Fabre, CEO, North Asia, Lagardère Travel Retail (far left) joined Dag Rasmussen, Chairman and CEO, Lagardère Travel Retail (
third from left) at the grand opening of the master concession in 2018. TRBUSINESS 41
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