Travel Markets Insider Publisher Lois Pasternak recently had a chance to speak at length with TFWA President Erik Juul-Mortensen and TFWA Managing Director John Rimmer about a range of topics, including the upcoming Tax Free World Exhibition & Conference in Cannes; the industry’s new global campaign against illicit trade, and a prognosis of the future of travel retail.
Here follows highlights of their candid and considered observations.
TMI: Let’s start our discussion taking a look at the newly announced DFWC & TFWA campaign against illicit trade, counterfeiting and intellectual property theft. What has been the progress/reactions to the announcement of the campaign so far? What do you hope it to achieve?
Erik-Juul Mortensen
Erik Juul-Mortensen: The associations are currently putting together a 12-month activity plan, which should be ready in a few weeks, and will cover activities, activations, PR, all the elements of such a plan. It will include anything we can do to contact bodies around the world, such as stakeholder events. And we hope to get all the associations (and the press) working with us.
There is no doubt this is a global issue. One of the main goals is to illustrate that the duty free and travel retail channel is highly regulated and monitored and very safe for consumers to shop in.
A lot of brand producers are suffering from illicit trade. I come from the brand producer world and we had enormous problems and have seen some amazing examples of people trying to produce illicit and counterfeit goods.
I am glad that we have connected with the Duty Free World Council to work together.
Tax Free World Exhibition & Conference 2022
TMI: From the responses to date, what kind of attendance are you expecting in Cannes this year?
John Rimmer
John Rimmer: We have had a very positive response to date, both from exhibitors and visitors. We are very encouraged by the number of exhibitors that have committed to the event. We don’t want to tell you that we will be back on par with 2019; we won’t be quite at that level yet, but we will be significantly higher than in 2021.
Last year, as you know, there were many understandable reasons why some people were not in a position to join us, including very strict traveler restrictions in place in certain parts of the world.
This situation has improved and the number of exhibitors will be significantly up on last year’s number. We won’t be at the same level as pre-COVID times, but we won’t be all that far from it.
TMI: Now that China appears to be opening a little, what kind of Asian presence do you think might be attending?
EJM: Yes, China is opening up, but I don’t think we should become too optimistic about the number of Chinese visitors. But I do think we will have a good representation of Asia as a whole. We have had a very good response from Japan, Korea and Southeast Asia. That is really positive. Also, a few companies from Hong Kong have announced that they will attend.
But there will be other companies from China that will not attend.
JR: We have had some Chinese companies contact us to determine what they need to do in order to come, and we have given them whatever information we can that is accurate now. So there is a desire to attend, but there are still some serious restrictions in place regarding travel from China. We have to be realistic about the level of visitors from China.
Health measures
TMI: Do you anticipate any new anti-COVID measures in place from the French government?
EJM: Details are on the TFWA website, with links to the current regulations in France. I think that you must still prove you are vaccinated in order to enter France, but non-vaccinated visitors are allowed if they meet certain other requirements. It also depends on the country from which you are traveling.
JR: More of an issue is that it must be a vaccine approved by the European Union. And that is one of the questions we get from our colleagues in China, since their vaccine is not on this list. And that is beyond our control, obviously.
But we do provide people with the current information, which can be accessed here:
https://www.tfwa.com/tfwa-world-exhibition-conference/information-for-visitors-to-cannes-100011968
New for Cannes 2022
TMI: In addition to repeating the very popular TFWA Lounge, are there any other special new events we can look forward to in Cannes this year?
EJM: We are continuing the TFWA Lounge from 6-9 each evening down by the Carlton Beach. There will also be a
“Lounge” where people can get together on the first day. For me, that is a very positive development.
JR: It will give everybody an opportunity to get together before the business of the week starts.
EJM: In addition, there will be a night-time Lounge at the same location, which will be open until 2 am in the morning. So there should be ample opportunity to socialize and get together, and hopefully, have a very productive event. All of these are free to registered attendees.
JR: We are also bringing back workshops this year with two on the schedule. Following the Opening Conference on Monday morning, Oct. 3, we are holding an Airport Forum with some of the world’s leading airport managers on stage on Tuesday morning, at a time to be announced. On Wednesday morning we will hold a workshop on Innovation in Action to showcase some exciting developments that will be shown in the iLab.
Exhibition space
TMI: How will overall space compare to 2019 levels?
EJM: It is very unlikely that we will reach the 2019 level of exhibition space but we will be getting near that level. Not a day goes by that more companies come onboard. We will be much bigger than last year.
JR: We do not have infinite space, but we have been able to cater to last minute requests, and work down the waiting list.
Also, this year we are using some of the Palais space to house the iLab component of the show. In the past, we had held the Innovation Lab in a structure outside the Palais. That will be a showcase for some of the new developments in technology and other services that are being used to engage travelers.
EJM: It is also interesting to note that we have seen interest among quite a few exhibitors to increase their space from last year or 2019. I think this is a very positive signal.
Scheduling conflicts: Yom Kippur
TMI: As has happened at times in the past, the timing of the show this year coincides with the Jewish holy day of Yom Kippur. What impact, if any, are you seeing with the conflict in terms of attendance?
EJM: We are extremely sorry when things like this happen.
Unfortunately, we are not always able to control the schedule. We have to accept pretty much what is avail-able and work with the authorities in Cannes.
We are aware of the issues that are created from time to time. We also run into conflicts with the Northern European school holidays, which generated numerous complaints. We also ran into a conflict with China’s Golden Week.
Yom Kippur, of course, is so important that we perfectly understand the people who cannot attend. Going forward, we will also see another conflict with Golden Week. It is very difficult to schedule events when the dates of these events are moving every year.
But it is certainly not our intent to have any of these conflicts and when we sit down with the city of Cannes and the authorities, we are aware of the dates in the future and we are trying to do what we can to avoid this.
JR: This is a source of great regret for us. A lot of the events that had been pushed back during the pandemic have been rescheduled and there are fewer slots available. This is now a very busy time of the year. This is unfortunate.
Cannes is always about quality. And when we have some companies whose top management may be of the Jewish faith and can’t attend, that is unfortunate, no matter how many or how few people it is.
EJM: These colleagues and companies are a vital part of our industry that we will be missing, and that of course is very sad.
Travel Retail industry overview
TMI: What do you see ahead for Travel and Travel Retail in the next year?
EJM: I am not as optimistic as some of my colleagues. I would like to be optimistic and I know there is a big demand for traveling again. But at the same time I see the issues we have in the world, certainly in Europe. Airports are not functioning, airlines are not functioning, these are not getting better; we have the Ukraine issue, very sadly.
But we also know that people want to travel, and they will continue to travel. They will come back. But there are some issues that we should not neglect. And I see now that the number of delayed air-planes in Europe; canceled flights in Europe, are not getting better. So currently there are tremendous issues that will no doubt keep some people from traveling.
JR: I may be the glass half full optimist here, even as the situation in Europe is pretty challenging.
Nevertheless, it is nice to see these airports so full, and stores are open and people are shopping. This is what we have missed over the past two-and-a-half years. It is frustrating that there are sales we are going to miss for all the reasons that Erik has outlined. We have so much pent-up demand.
TMI: On a more positive note, how has the return of the “duty free” business from travel between the UK and the EU been progressing? What do you see ahead for this market?
EJM: I think people still have to get used to the return of duty free when they leave the UK or fly back to the UK. From what I can see it has been a very welcome addition to the business and one of few positive things to come out of Brexit.
North American recovery
TMI: Looking at North America, we are traveling and people are buying. Do you see this continuing?
EJM: I can’t see why not. I am pleasantly surprised to see how quickly the U.S. numbers have come back. It’s a very positive story.
TMI: Has the COVID-19 crisis changed the travel retail map: are geographic priorities “pivoting” from east to west? Quite a few companies have begun investing in the U.S. travel market again, after a long time focusing on China.
JR: It is very encouraging to see the Americas emerging so rapidly from the crisis. Also the markets in the Caribbean, which are particularly diverse in a duty free sense.
But Asia is still going to be an absolutely crucial and dynamic market; that will continue. It doesn’t have to be one or the other, in terms of east or west. One is not at the expense of the other. All these markets are investing to be present wherever they go. I think that Asia will be back in a big way, starting next year.
Travel retail is such a diverse business. Look at the US-Canada border – which is still struggling. They are a lot of little stores but when you put them all together it can be a significant market.
TMI: What do you see as the biggest short-term challenge to recovery in travel retail?
EJM: I think peace in Ukraine is a must. Other than this, we need to get the airports back to work, and if we do that, people will start traveling again.
TMI: We are seeing a continuation of some major consolidations in travel retail, the most recent being the Dufry-Autogrill merger. While I know you cannot comment on that, what is your reaction to consolidation of this type? In addition, do you think the blurring of the lines between Food & Beverage and Retail is a plus or a minus to the business in the future?
EJM: I cannot comment on this specific deal, but in general, consolidation is part of the game and there are other big operators that have already consolidated with both the catering and retail side. So this wouldn’t be the first time. At the end of the day, anything that will benefit the consumers, will be a good development.
