m1nd-set: Travel retail revenues to take unprecedented hit following US and Italy Coronavirus measures

The U.S. ban on traffic from Schengen countries across Europe will result in a drop in traffic of over 3.5 million passengers over the two month period, reports Swiss research agency m1nd-set, who has analyzed the impact on air traffic across affected countries, following the United States’ unilateral travel ban on air traffic from Europe. The latest report also analyzes the impact of a total shutdown of international flights to and from Italy following the country’s lockdown.

The analysis shows traffic impacts and highlights the key categories in travel retail that will be affected.  Drawing on data from its Business 1ntelligence Service (B1S) traffic tool, the m1nd-set report compares traffic data across March and April 2020, with traffic in the same period in 2019.

Germany will be the most affected country in passenger numbers, with a decline of 890,000 passengers (-5.4%), followed by France with a loss of 657,000 passengers (-5.8%) and the Netherlands where traffic will fall by just under 500,000 passengers or 7.5%.

In percentage terms, Iceland will experience the largest decline with a 23.7% drop in passengers over the same period in 2019, a loss of circa 128,000 passengers.

The airports in Europe most affected by the US ban are Paris Charles de Gaulle (-10.7%), Frankfurt (-11%) and Amsterdam (-8.3%).

The largest percentage decline is again Iceland with Reykjavik Airport suffering the 23.7% drop in passengers.

CDG will lose over 618,000 passengers over March and April, Frankfurt will lose over 572,000 passengers and Amsterdam Schiphol’s traffic will fall by just over 493,000 passengers.

The impact on travel retail revenues is shown in B1S through an analysis of the duty free shoppers purchasing each specific category and evaluating the potential losses based on the decline in passenger numbers. The analysis looks at the top categories purchased by both European travelers in U.S. airports and the main categories purchased by all travelers in Italian airports, as well as the impact on Europeans purchasing at their outbound airport.

On average 19% of travelers from Europe purchase at duty free shops in the U.S., which over the March-April period this year will mean 665,000 less travelers from Europe shopping at U.S. airports with the travel ban in place. The percentages vary across categories with Confectionery and Souvenirs & Gifts set to suffer the biggest impact, as 27% of European travelers purchase these categories at U.S. airports. 25% purchase Perfumes, 17% buy both Alcohol and Tobacco, 14% purchase Fashion & Accessories, 8% buy Skincare products and 6% purchase Make-up.

m1nd-set’s CEO and owner Peter Mohn commented: “Given the unprecedented situation, we are being inundated with enquiries from companies, eager to understand the potential impact on sales. We have to be candid, the outlook is quite serious. We can analyze the direct impact on traffic from our B1S traffic data tool and, when we combine this with the data from our extensive shopper insights database, we’re able to provide accurate estimates of the overall impact on sales following traffic bans, like this U.S. ban on European flights.”

The same applies with markets such as Italy, said Mohn.