Travel Markets Insider Newsletter Vol. 22 No. 5

The Travel Markets Insider newsletter is attached to this post as a PDF file. To open the PDF file, please click on this link.

The Duty Free World Council held another critical, far-reaching webinar yesterday entitled Year of Recovery? Note the question mark – it was there for a reason. TMI will cover the various presentations—especially those that pertain to the Americas – in future issues. But one sobering take away was that recovery will be far from easy or smooth.
With the rampant spread of existing and new variants of the coronavirus, countries worldwide are slamming shut their borders to travel and instituting new lock-downs. As a result, the consensus was that real recovery to travel will not begin until later in the second half of this year, and will be in select markets only. In fact, the experts are looking more at 2024 for widespread recovery rather than 2023. The bright spot, however, is that pent-up demand for travel is strong and growing, so when borders open, and vaccines are readily available, recovery should flourish.
Reflecting the themes touched on during the webinar, TMI’s lead story today unveils the strict new restrictions imposed on travel by Canada, which has shut down all flights to and from the Caribbean and Mexico for three months. Canada has also instituted testing and quarantines for all arrivals, with travelers footing the (sizable) bill. This measure obviously imposes extreme hardship on the tourist dependent islands, which are a prime destination for many Canadians. Details on page 1.
As Europe also imposes stricter measures to curtail the spread of COVID-19, France has even closed its Caribbean territories to all but essential travel. Page 1.

Event organizers – IAADFS and ASUTIL, in partnership with The Moodie Davitt Report and FILTR — have announced additional speakers for the Knowledge Hub, which is developing into one of the most interesting and worthwhile conferences the industry has held in the Americas. See details on page 2.
DFNI has announced that their annual Travel Retail Americas Awards will take place virtually during the Summit of the Americas. In light of the difficult year, the organizers have created new awards categories and criteria that are particularly relevant to the current environment. See page 2.BY THE NUMBERS
It should come as no surprise that industry group IATA reports that 2020 was the worst year in aviation history. See full year figures on pages 3 & 6.
DISCUS. (Distilled Spirits Council of the United States). Some positive numbers from the U.S. off-premise markets indicate strong consumer demand that spells optimistic potential for travel retail sales post-COVID. Super-premium brands are doing particularly well. Tariffs, however, are a continuing challenge. See Special Report by Michael Pasternak on page 5. 

Two of the most important travel retailers in the world – Dufry and DFS Group – this week opened the first phases of spectacular new duty free stores in Hainan, China, with their local partners. Hainan is the brightest market in the industry this year, where local Chinese can buy as much as US$14,000 a year duty free.
Dufry and Hainan Development Holdings open in GDF Plaza in Haikou’s Mova Mall. Page 3
DFS and Shenzhen Duty Free Group bring “The World in a Day” to Haikou Mission Hills. Page 4
The news is not so good for the retail operations in North America of two major travel retail brands.
Impacted by the fall in sales due to the coronavirus, Godiva is closing all of its U.S. locations in the U.S. and Canada by the end of March. Most of these stores are in malls. Page 4
L’Occitane, Inc., the U.S. subsidiary of the French beauty products maker, has filed for Chapter 11 bankruptcy. The company says the voluntary move is designed to right-size its U.S. footprint by closing select locations with “burdensome” rents. Page 4
Not every company is closing in the U.S. however. Beam Suntory has announced it will establish its global headquarters in New York City in mid-2022, and has already obtained space for the expansion on famed Madison Avenue. Read more on page 6