HONG KONG, CHINA. Welcome to our rolling coverage of The Trinity Forum 2023, live from the Regala Skycity Hotel in Hong Kong, which concluded on Thursday evening.
The world’s most influential airport commercial revenues conference was hosted this year by Hong Kong International Airport. Read on for full coverage of the build-up, conference sessions (25-26 October) and social events.
The Trinity Forum 2023 was co-organised by The Moodie Davitt Report, Airports Council International (ACI) Asia-Pacific and Middle East and ACI World.
Look out for our full report in a special post-Trinity eZine, out in November.
THURSDAY 26 OCTOBER
The Gala Dinner
17:00 Closing remarks
16:00 Elevating the Brand Experience
This session offered different brand owner perspectives on the evolution of the Trinity. It explored how leading suppliers are reflecting on the changing demands of today’s travelling consumers and examined how they can better collaborate with retailers and airports – within and across categories – to elevate the overall retail experience.
The panel featured Beam Suntory Asia, Middle East and Africa Travel Retail Director Alasdair Dickinson; Puig Global Travel Retail Executive Vice President Kaatje Noens and Nestlé International Travel Retail (NITR) Head of Category Development Nicola Wells.
Wells presented NITR’s Food Reimagined strategy which seeks to drive its ambition to turn food into the number one most-purchased category in travel retail. She also discussed how the industry can leverage changing passenger mix, address customer apathy and drive conversion.
She said: “Our goal is to leverage the currently untapped potential of food, ensuring it is in 50% of baskets by the end of the decade. To achieve this, NITR has adopted a new way of looking at the food category and that means not just focusing on the traditional and highly attractive confectionery category, but also exploiting the opportunities across the food category, encompassing other categories such as coffee, health supplements and local foods alongside global food brands not yet widely present in travel retail.
“This mission seeks to drive incremental growth through conversion, increase basket spend and reignite the growth in the food category which is trailing behind the current strong growth in the domestic market.
NITR tapped long-time collaborator creative retail agency Portland Design to reimagine the store experience into the Emporium of Goodness – a concept which the partners are calling the antidote to shopper apathy.
Dickinson tackled the pain points that prevent travellers from entering travel retail stores. “We found that over 36% of pax make their purchases elsewhere,” he said. “Another top reason amongst customers not to travel is that they don’t have enough time.
Dickinson referred back to DXB CEO Paul Griffiths’ call to create the all-important emotional connection with travellers. He said: “The challenge is how we can create the desirability and special moment for our customers and guests.
“We know that a third of passengers are browsing but rather than a browsing mindset, we need to create a destination mindset through elevated airport experiences. Visiting an airport store has to be an emotive experience for the shopper and we know that this is even more important for Gen Z and Millennial shoppers.”
“In Q4 2023 we will open our first even House of Suntory shop-in-shop with a vision that highlights the storytelling, history and legacy of our Japanese whisky. This will be the first of its kind globally, including in domestic markets. It is exclusive experiences like this that are critical to driving shoppers into store and away from their phones.
So how do we all work together to attract at the power of the future already from now? According to Dickinson it’s all about developing an innovative pipeline of travel retail-exclusives, engaging digital-savvy luxury shoppers with limited-edition releases and tech-empowered events and storytelling excellence.
Dickinson said: “As a liquor supplier, I often look at some of the amazing experiences in luxury fashion and P&C and I ask myself… are we doing enough? Are we being brave? Are we pushing the boundaries and stretching our thinking? Now is not the time to rest on what we have done before and expect success. The Trinity needs to work together, communicate and share the risk and responsibility of growing our categories, providing amazing experiences and making travel retail the experiential powerhouse I know it can be. Let’s reach for the stars together, if we fail together and land on the moon, that’s ok with me.”
Noens highlighted two memorable brand campaigns from Puig: Rabanne and Penhaligon’s. She said: “During COVID, we doubled down on travel retail as a growth channel and we launched Rabanne Phantom and Fame as global travel retail-exclusives in 2021 and 2022.
“We took over Heathrow Terminal 2 with a golden Rabanne animation. This activation marked the first time that we offered Rabanne accessories alongside the fragrances and shows what can be done when we stop saying no to each other and really embrace meaningful collaboration.”
“We are extremely proud of this. This showed our bold, long-term thinking. We had passengers who didn’t know our brand but were familiar with the fashion house. We had passengers who visited the animation because they could customise the bags with charms, which was a feature exclusive to Heathrow.”
Noens added: “For the first time ever, we were given the opportunity to open a 100sq m shop with Penhaligon’s in Block C of the cdf Mall in Haitang Bay. Block C will be the only store in the world where Penhaligon’s will be available in a cruise ship-inspired store. We created a 360-trade plan where customers can experience Penhaligon’s in a totally different environment. This includes gifting experiences, fragrance discovery and even packaging all in line with the cruise ship theming.”
On how the Trinity can better collaborate to deliver memorable stores and animations such as Rabanne and Penhaligon’s, Noens said: “We want to be challenged, we don’t want to play the price game but we want to win in terms of experience, fun and giving passengers something that they can’t resist so we can turn them into consumers for all of us.”
15:30 People, Planet & Partnership – Growing travel retail in the right way
In this session, Diageo Global Travel Managing Director Andrew Cowan; SSP Group Head of Sustainability Verity Lawson and ACI World Director General Luis Felipe de Oliveira talked about their company’s respective Environmental, Social & Governance (ESG) roadmaps. After their presentations, guest moderator SPARK Group President & Founder Heidi Van Roon interviewed the panellists about how they are balancing people, planet, profit and purpose.
Lawson gave a state of the nation address on the key sustainability issues and challenges in the F&B sector. She said: “Global food production is estimated to contribute to over a third of total Greenhouse Gas (GHG) emissions every year – that’s ten times more than aviation.
“This isn’t just an environmental issue, it’s a social one too in terms of food security and the impact of climate change on people’s lives. We also know almost a billion people are going hungry every day, and yet a third of all food produced for human consumption is wasted.
“These are some pretty scary figures and can seem overwhelming,” Lawson added. “However, there are plenty of reasons to be optimistic. There was a 30% increase on ACI carbon accredited airports in 2022. Renewable energy is now really taking off, with many airports being at the forefront of this transition.
“There are also major investments in sustainable aviation fuel and infrastructure. The rapid developments of AI could also be a game-changer in providing technological solutions across many different sustainability challenges.”
Lawson then presented SSP’s long-term sustainability roadmap. “We established our global sustainability strategy in 2021, focused on the three pillars of Product, Planet and People. We have quantifiable targets for each issue to 2025 – including our transition to 100% certified hot beverages and cage-free eggs, 100% sustainable packaging and 40% women in leadership roles.
“We have an ambitious target to reach net-zero GHG emissions across our value chain by 2040 – importantly this covers are whole value chain across all three scopes, including our supply chain, brand partners and client sites.”
Cowan outlined Diageo’s ‘Society 2030: Spirit of Progress’ roadmap and its commitment to positive drinking. He said: “We want to change the way the world drinks for the better by celebrating moderation and continuing to address the harmful use of alcohol, expanding our programmes that tackle underage drinking, drink-driving and binge drinking and leveraging our industry-leading DrinkiQ platform.”
Diageo plans to change the attitudes of five million people by 2030, educate 10 million young people, parents and teachers on the dangers of underage drinking by 20230, and reach one billion people with targeted moderation messaging.
Diageo is committed to championing gender diversity with the ambition to achieving 50% representation of women in leadership roles by 2030, improve the livelihoods of 200,000 people through its Learning for Life and other skills initiatives projects and have 45% of leaders from ethnic backgrounds by 2030. As a testament to these commitments, Diageo Global Travel hosted the Women in Travel Retail networking event in Cannes during the TFWA World Exhibition.
Cowan added: “We believe that Diageo Global Travel Retail needs to be representative of our international travelling consumer. We also believe that we do our best when we bring our whole selves to work. That means embracing our diversity and ensuring an inclusive environment in which everyone can thrive.
“We want to bring this to the wider travel retail community. We are also harnessing the deliberately inclusive brand campaigns of global brands such as Smirnoff, Baileys and Ciroc to extend our commitment.”
Offering the wider airports perspective, de Oliveira said: “We are all aligned on the shared goal of growing our business sustainability. Airports and retailers must continue to anticipate and adjust to changes as international travel recovers. Retailers are crucial to the customer experience, energy transition and sustainable growth of the air transport system.”
“ACI World has 2,000 members and that represent 95% of global traffic in terms of passengers. Of these 2,000, almost 500 are already participating in the Net Zero Carbon promise via the ACI Accredited Programme,” he added.
“In 20 years we will double the size of the industry. We need to do this while addressing the most important issues in the industry in terms of people, planet and of course partnership,” de Oliveira said.
So – how can the industry come together to build a sustainable aviation system? De Oliveira said: “We need to work together to create the airports of tomorrow. We cannot be spectators to the future. We need to transform airports from passenger hubs into energy hubs. Airports can further lead and change the future of aviation for the better.”
15:00 Coffee Break hosted by King Power Group
14:20 Exciting opportunities knock at key airports
Martin Moodie moderated a session with senior airport commercial figures highlighting ambitious and exciting upcoming projects at their respective airports.
Vienna Airport Senior Vice President, Center Management Philipp Ahrens, Kansai Airports Corporate EVP; CCO Non Aeronautical Stephane Geffroy and Western Sydney Airport General Manager Retail Glyn Williams shared the thinking behind the new developments, which will provide exciting opportunities for retailers, F&B companies and brands.
14:05 Qatar Duty Free’s Thabet Musleh shares a message
Qatar Duty Free (QDF) Senior Vice President Thabet Musleh appeared on video – showcasing the highly-impressive QDF commercial offer – at the conference this afternoon.
Speaking directly to Trinity delegates, he said: “My key message is the importance of partnership, and the Trinity model. We have a unique trinity in Qatar with Qatar Duty Free, Hamad International Airport and Qatar Airways, all aligned in serving our passengers in the best possible way.
“We’ve executed an extraordinary transformation in recent times, and it is truly a testament to what we can achieve when we drive together. Including, most importantly of course, our brand partners who helped bring these realities to life on a day in day out basis in the airport.”
Sharing his pride in the Qatar Duty Free offer, Musleh added: “We truly have something for everyone appealing to as many tastes, needs and budgets as possible. HIA’s offering is one of the most diverse in an airport worldwide. From inherently local flavours to the biggest international brands across all categories, you will find something for everyone here.
“From the budget traveller to the first class passenger looking for something exclusive, Qatar Duty Free caters for everything. What we do is experiences no matter how much a passenger spends.”
13:20: Customer-centricity in an evolving consumer landscape
The focus of this year’s Trinity is all about how to make the business not just bigger; but better. Absolutely key to that is an unrelenting focus on the consumer’s desires and needs rather than the silos and structures of the channel.
In this session moderated by Martin Moodie, Heathrow Airport Retail Director Fraser Brown; Avolta Asia Pacific President and Chief Executive Officer Freda Cheung and Pernod Ricard Global Travel Retail Vice President Marketing Liya Zhang shared their insights — with each panellist representing a different Trinity stakeholder — about how they are embracing a customer-centric approach to business.
Offering the airport perspective, Brown said: “We’re the largest airport in Europe and will finish the year at around 78 million passengers. Growth has come back and in the past few months we’ve been trading at pre-pandemic levels.
“We are short spaced but we don’t have any plans for a major expansion in terminals,” he added. “This means that we need to drive more service and money from the space we already have. The good news is we can do fabulous things together with our partners. Instead of the Trinity, we have embraced a Quaternity approach as we always include our colleagues in JCDecaux.
Brown highlighted Heathrow’s recent activation with Patron as one of the airport’s standout collaborations. “We are proof that small formats can work but it’s dependent on getting the offer right and delivering fantastic experiences both physically and digitally. We’ve got our passengers back and the footfall is there; now it is our responsibility to drive penetration.”
Zhang outlined the key pillars of Pernod Ricard’s ‘Connect with Impact’ approach. She said: “We aim to put travellers at the heart of everything we do by inviting them discover our brands and connecting with them, together with our partners, to drive the most impact on a global scale.”
Key to this approach is the spirits company’s ‘Demand Spaces’ framework which explores shopper typologies on one side and shopper missions on the other side.
Cheung highlighted the importance of customer centricity to Avolta’s approach. “As a retailer we organise ourselves by category and design our stores like that, but is that really how consumers shop? If not, then how can we design the store differently and go beyond category thinking. We need to ask ourselves what it really means to see things from the eyes of the traveller.”
“Together we can do what we can’t do alone,” Cheung added.
Quoting Steve Jobs, Cheung said: “Innovation is the ability to see change as an opportunity and not as a threat. How do we move from conclusion to action? Let’s test and learn together. The incredible technological advancement in recent years has fundamentally changed the way we learn and interact with each other. The speed and impact of this change is unprecedented.
“Consumer-centricity is really what drives us and having a purpose-driven approach is key,” she added. “Our cross-category mind.body.soul concept is about people looking for something to take care of themselves. We’ve launched 15 stores now worldwide and we’re launching more soon. The concept is serving a purpose and was created by looking through the eyes of the traveller.”
Moodie asked the panellists to highlight their most memorable collaborations and campaigns to date. Zhang said: Our ‘Travel Like a Local’ campaign, which was amplified by different touchpoints pre- during and post-trip, saw us partner with our colleagues in the domestic market to create a more seamless customer journey. For this campaign we teamed up with TripAdvisor and phase two will see us partner with innovative payment systems too.”
Brown added: “We must repair the balance sheet. The industry has a COVID hangover and we must fix that. Bacardi came with a different brief. They wanted to tell a brand story and wanted to use experience to tell that story. The KPIs were focused on service and brand build and not ‘how many bottles of tequila can we sell’. That’s what set it apart for me. They came looking to achieve a higher purpose and adopted longer term approach and that’s one way we can behave differently as an industry.”
12:50 Keynote session: Dag Inge Rasmussen, Lagardère Travel Retail
In a fascinating session, Lagardère Travel Retail CEO Dag Inge Rasmussen sat down with Dermot Davitt to discuss the evolving airport consumer, acquisitions which have seen the company become an increasingly influential player in airport F&B, the merits of the master concessionaire model, and much more.
The conversation was preceded by a compelling presentation from Rasmussen in which he emphasised how strongly Lagardère Travel Retail is currently performing in the airport space, and outlined key elements of the company’s strategy and its strong focus on sustainability.
“Our duty free spend per passenger is up by high single digit percentage compared to 2019 and 2023 is set to be our best year ever,” he said.
Asked about the key trends the retailer is seeing from the consumer, Rasmussen replied: “The consumers are evolving, they are often younger, looking for more authenticity, more experience, more openness. They are focused on their health, on what they eat; they want more uniqueness or exclusivity, and they really value the omnichannel experience.
“These are the needs we have to satisfy. In duty free, 30% of our products are local products. Sense of Place is not just words to us, it is a category, it gives each of our airport locations a distinctive offer.
“With the help of our brands we are looking at how products can be personalised to the consumer, in every particular airport environment. That’s deeply rooted in our business now.”
On the subject of consolidation in the travel retail industry, the convergence of retail of F&B among major players and the importance of scale going forward, Rasmussen said: “I don’t think scale is the main issue. The main issue is integration. It’s good integration of the companies [involved in the acquisition process]. So that means we don’t only look at the business [being targeted], we look at the vision.
“It is a partnership, and so the due diligence is not only on the figures and on the contracts. It’s also about how we can integrate the teams and the concepts into our vision.”
11:30 Introducing CAVU airport commerce platform propel
This morning, we heard an intriguing presentation from Craig Pring, Director, Growth APAC at CAVU which revealed a new e-commerce platform for passengers and airport business partners named ‘propel’.
CAVU was founded by MAG (Manchester Airports Group) with the aim of revolutionising airport travel, creating value for passengers and the businesses that serve them.
Its solutions cover pre-booking, online and services in the airport passenger journey from car parking all the way to airline gates.
The company’s development path has culminated in the propel platform, a complex digital journey described in detail by Pring (pictured above).
Explaining the CAVU and propel solutions, Pring said: “In CAVU we have a global organisation to transform the modern end to end customer journey for the benefit of passengers and the businesses we serve.
“We have the ultimate aim of increasing the volume and value of the marketplace for our clients – our strategic objectives is to secure more revenues across more channels and inventory with clients in the airports, increasing the volume and value of transactions by upselling, and cross selling. And finally, building local loyalty, through incentivising repeat purchases, and customer retention.
“Propel is a single marketplace platform which covers everything from car parking to airport lounges. Products can be added by clients at the click of a button, they manage their own products from within the extranet, who they sell to, what price, what capacities etc.
“The propel platform is built by airports for airports, where the e-commerce journey is optimised for each product, with the ability to cross sell any products. It provides passengers with the very best highly-optimised booking journey.”
10:35 What’s next in digitalisation?
Martin Moodie moderated a session which explored the next frontier in digitalisation and technology. The panel featured Hylink Group Head of Planning Yukun Bi, Purple Communications Director James Brown and Taobao Tmall World Business Director of Hong Kong and Macao Sabrina Yang.
Brown explored how generative Artificial Intelligence (AI) can enhance human creativity. He said: “Having experimented with these tools across our range of services, it is clear to us that generative AI is a fantastic starting point for research, inspiration and ideation.
“What AI doesn’t have is the nuanced understanding of the specific language (design, written and verbal) that brands employ to engage consumers in the travel retail channel – this real magic can only ever come from humans.”
According to Brown, the best AI is invisible and should seamlessly integrate into businesses and functions. He then presented an imaginary AI-generated duty free store of the future.
“Our creative studio tasked Mid Journey AI to imagine the Duty Free Store of the Future following two key trends: sustainability and digital. This is a great example of how AI can accelerate creativity with the results taking existing real life examples and stretching them in new and unexpected ways.”
Yang introduced an AI-generated KOL named Leah and explored how digital avatars and livestreaming can enhance ecommerce. She said: “Livestreaming is one of the fastest-growing retail sales formats across digital marketplaces. Beyond shopping, consumers want to find a broader range of more diverse content, including shopping-related encyclopaedic knowledge, lifestyle recommendations, and even interactive entertainment. For sellers, AI tools can help them adjust content based on audience demographics in real time.
So what’s next in digitalisation? Yang believes that AI is the way forward. “Digital avatars powered with AI knowledge can be used for customer service and live streaming.
“Ecommerce is really about making it easier for consumers to acquire products faster and easier. It’s about payment and logistics, where travel retail certainly has an advantage. For example, Hong Kong International Airport provides services for visitors to order online and pick up offline. This is not a zero-sum game. The learnings from both segments within the retail spaces can be shared to create a well-balanced omnichannel strategy for brands.”
Bi presented Hylink’s insights on the digital trends that will transform the industry. She said: “Travel has rebounded but travel retail is not seeing a rebound of consumer consumption to pre-pandemic levels. Only 5-10% of consumers are transacting in airport stores, versus 40-60% transacting in domestic markets.”
The cause of this is a change in demographic of travellers today. Over 50% of travellers are Millennial and Gen Z travellers who value experience over price. “These consumers are digital natives, omnichannel shoppers who travel more than the generations before them.”
“We need to go from ‘Share of Wallet’ to ‘Share of Life’. Travel is very intentional so let’s use digital to dial up that intention,” she said.
Bi urged the Trinity to create a seamless travel retail digital ecosystem which can inspire and retain digital-native Gen Z and Millennial travellers, integrate with carriers, OTAs and hotels, enable digitally driven POS and offer personalised product recommendations and services.
9:20 Panel session: ‘Customer-centricity’ in an Evolving Consumer Landscape
The Moodie Davitt Report President Dermot Davitt hosted an engaging discussion on customer-centricity in the airport space with Mignon Buckingham, CEO of airport experiences company Airport Dimensions; Song Hoi-see, Founder and CEO of leading airport lounge company Plaza Premium Group; and McDonald’s Hong Kong CEO Randy Lai.
Among the subjects discussed were the importance of data to understand consumers passing through airports and what their needs are, and how the different elements of the airport ecosystem can combine to provide better, more convenient services for the customer.
9:05 Travel Food Services’ Varun Kapur on elevating the airport lounge experience
Delivering a special presentation with the theme “Airport lounges reimagined”, Travel Food Services (TFS) Executive Director Varun Kapur highlighted the outstanding work of his company on producing airport lounges of high quality, with a strong Sense of Place.
TFS currently operates over 350 food & beverage outlets across 19 cities in airports, railway stations and highway service areas. It also manages 27 international airport lounges, further cementing its status as India’s premier travel F&B company.
The quality of the TFS offer was recently underlined by the Indian company securing the Airport Lounge F&B Offering of the Year The Moodie Davitt Report’s Airport Food & Beverage + Hospitality awards in Thailand last month.
With strong visuals in his presentation, he highlighted that TFS lounges are integrating regional art and architectural influences into the space; using materials that are locally sourced; create installations that tell a story of the city being visited; and building memories by allowing customers to savour the well-known parts of the airport city’s culture or food.
Giving his assessment of the airport lounge marketplace, Kapur said: “The global discerning passenger is tired of the old way of lounges, where design and experiences are unimaginative and cookie-cutter; there is no effort in achieving a Sense of Place.
“Food is an afterthought and customer experience is both substandard and monotonous at the same time. We believe in pushing the envelope and doing things differently, bringing together the history, culture and craftsmanship that is resonant to the city into luxury spaces to create multi-sensory experiences.”
Kapur concluded his presentation with a stunning video introducing the new TFS brand, Araya, a new luxury airport lounge player.
08:35 Benjamin Vuchot on the future of luxury travel retail
In a fascinating sit-down with The Moodie Davitt Report Founder & Chairman Martin Moodie, DFS Group Chairman and CEO Benjamin Vuchot offered a glimpse into the future of luxury travel retail.
Despite macro-economic and geo-political uncertainties, Vuchot is confident about the prospects of luxury travel retail. He said: “As the world goes through unprecedented change, travel retail is poised for growth and we are confident of the positive growth forecasts. Global tourism recovery is leading the boom in international retail and the industry growth is at levels we have never seen before.
“The market size for global travel retail was US$56 billion in 2022 and is projected to grow to US$61 billion in 2023 to US$117.8 billion by 2030. The pandemic has given us a great opportunity to reassess. With 63 years of history, with a lot of pioneering new ideas, we had to realise that the customer has changed in the last three years. The team and I were really keen to reinvest and reinvent.”
This confidence is translated into significant investment in the channel, particularly across DFS Group’s stores in Hong Kong, Macau, Hysan and Canton Road. DFS Group is reopening its store in Waikiki, a location which Vuchot described as holding “a special place” in DFS Group’s history as one of the first stores the business opened 63 years ago.
According to Vuchot, DFS Group is focused on strong growth and continued expansion in Macau with Galaxy and new openings next year. This, according to Vuchot, is due to the increase of Chinese travellers going between Hong Kong and Macau, where DFS Group has a very active portfolio.
Vuchot further underlined DFS Group’s commitment to China travel retail by highlighting its recent opening in Chongqing Jiangbei Airport in 2022. “Looking at the China market, Hainan is a hot topic as it is set to become the world’s largest free-trade port,” he said.
Part of this investment is the DFS Yalong Bay project which Vuchot called a “world-class, seven-star luxury retail and entertainment destination”.
DFS Yalong Bay involves an “unprecedented” investment into a 128,000sq m site, attracting more than 1,000 luxury brands including “iconic” maisons from the retailer’s majority owner LVMH Group once fully operational.
DFS Yalong Bay will become Sanya’s premier destination for luxury shopping, world-class accommodation, dining, and entertainment, serving international and domestic tourists with innovative, renowned luxury brands and experiences, the company pledged.
DFS Group is also looking to expand into new frontiers globally and is soon opening a new location in Brisbane. “We’re delighted to join Queen’s Wharf Brisbane’s multitude of attractions and look forward to welcoming our global travelling customers to this exciting city in the future,” he added.
This expansion is driven by DFS Group’s mission to create ‘destinations within destinations’. Vuchot explained: “We choose locations where our customers want to visit and then create stores of a quality and richness that elevate the local retail offering to a world-class level.
Vuchot also talked about DFS Group’s most exciting innovations in technology, consumers and channels.
WEDNESDAY 25 OCTOBER
20:00 Scenes from Popinjays as the Trinity Forum takes the night in Hong Kong
15:50 Avolta CEO Xavier Rossinyol on the Trinity approach
Avolta CEO Xavier Rossinyol captivated the audience with his compelling views on the future of the travel retail industry, and how the recent merger of Dufry and Autogrill to form a single retail/F&B powerhouse changes the game.
He had a powerful message about future industry growth, noting that passengers today are projected to reach more than 20 billion by 2041 [9.2 billion travelled in 2019, for context]. “Passengers will keep growing because travelling is a fundamental need, a genetic need of the human being. And 90% of the world’s population has never travelled. So there has been growth and there will be growth in the future.
“We talk about consumer experience, we can talk about travel but at end of the day we are all business people. This is about increasing the spend per head, the spend per passenger. If we want growth, we need to work differently. We need to work smart.
“Many times it’s not doing something absolutely magical, it’s just doing things that are happening in the high street or elsewhere. And we have to do it together.
“In order for this industry to keep growing, we all need to benefit. The brands need to benefit, the airport partners need to benefit and the operators [concessionaires] need to benefit. But I’m convinced that together we can increase that spend per head and will generate enough money for all of us here [in this Trinity Forum Conference room].”
However, he warned: “But we need to understand that sometimes we need to invest in the future and to sacrifice short term profitability. If we do that, I’m convinced we have success not just for the next five years, but success for the next 50 years.”
More on Rossinyol’s conversation with Martin Moodie follows.
16:20 Jaya Singh on Mondelez Travel Retail Made Right
Back in 2021, Mondelez World Travel Retail (WTR), the confectionery category leader, announced a sustainability roadmap to progress kinder practices for both people and planet in travel retail: ‘Travel Retail Made Right’. Travel Retail Made Right is underpinned by four key pillars: Product and Packaging, Ethical Promotions, People and Industry Leading Actions.
Mondelez WTR hopes to inspire the wider industry to action. The latest industry-leading initiative is a consumer-facing sustainability survey launched over the summer to assess the impact sustainable messaging has on consumer purchasing decisions, starting with the confectionery category.
Through an approach which delves into sustainability-related aspects without explicitly naming them, Mondelez WTR aims to gain further insight into shopper behaviour of benefit to the industry.
Singh said: “I want to build on what Mondelez WTR coined ‘Travel Retail Made Right’ and why this mantra is relevant to every person in our industry. We need to come together on one key platform: data and insights. Only then can we transform all our wonderful ideas into reality.
“As Mondelez WTR, we aim to drive growth by increasing the number of shoppers, the amount of their spend and the frequency of their purchases. We are committed to increasing conversion through a winning portfolio to ensure we address the balance of ever changing need states, elevating awareness and delivering unique experiences.
“Inflation has resulted in cost pressures which is why we need to create new ways to drive penetration and conversion. We need to deliver added value to our winning portfolio to combat these challenges through differentiation, exclusivity, personalisation and innovation.”
Singh added: “By 2030, Gen Z and Gen Y will make up 50% of the travelling population and as the channel welcomes this new generation we need to consider how this will impact changes in buying behaviour. Sustainability is one of the key pillars. We are not alone on this journey everyone in the industry is moving forward to create a more sustainable world.”
Mondelez gauged consumer interest in sustainable activations, promotions, products and packaging. By employing a series of visual inquiries where consumers compare and choose between products or activations, with and without sustainability attributes, Mondelez WTR pinpointed factors attracting or deterring interest in eco-friendly initiatives.
Singh added: “Although all activations were appealing, sustainable activations drove more positive, stronger perceptions. Brands can’t completely rely on sustainability to make a campaign successful. Shoppers are more likely to engage with sustainability activations when there is a physical element involved.
“Sustainable activations also seem to resonate more highly with developing markets, In short, when we promote a product it will sell, when we add a sustainable element it should sell even better.”
Through these insights, Mondelez WTR aims to cultivate a deeper understanding of the activation features which resonate with consumers, integrating this feedback into future endeavours to enhance the success of ongoing and future sustainability projects.
Concluding, Singh said: “Sustainability demands that we challenge conventional models and structures in travel retail. We have to appreciate the game is different and we need to work together to create the playing field that enables all players in the industry to contribute to sustainability, sustainably.”
15:00 Trinity Forum exhibitors shine at the Regala SkyCity Hotel
15:00 Meeting Consumer Needs
An enhanced and rethought approach to the consumer, whose ultimate satisfaction lies at the core of all Trinity collaboration, is key to our industry’s revival and accelerated growth.
In a fascinating session moderated by The Moodie Davitt Report President & Editorial Director Dermot Davitt, Airport Authority Hong Kong Executive Director Commercial Cissy Chan, Ant Group Greater China International Business General Manager Venetia Lee; Hylink Group Americas Managing Partner Humphrey Ho and L’Oréal Travel Retail Asia Pacific General Manager Tao Zhang share their insights into today’s Asian travelling consumers, the lessons of the pandemic and how they are investing to serve customer needs in new and innovative ways.
Ho presented the findings from Hylink’s latest study on Chinese Gen Z and Millennial consumer spending habits. Hylink revealed that both generations spend approximately 60% of their travel spend on travel retail and the remaining 40% on destination purchases. The company also revealed that travel is no longer a luxury with majority of Gen Z and Millennial travellers taking around two to three casual leisure trips annually.
Notably, the average per capita transaction in 2023 for High Net Worth (HNW) shoppers from both generations was RMB33,957 (US$4647), with 30.9% spent on fashion and accessories.
Ho recommended that brands integrate premium, digitalised experiences such as virtual try-ons and personalisation to captivate Gen Z and Millennial shoppers.
He highlighted travel retail as a trial channel and encouraged brand trials to engage consumers early on in their journey. He also recommended foregoing CRMs for ecosystems which have the capability to address travel needs and drive customer loyalty in a meaningful way.
Following Ho’s presentation, the panel discussed how the Trinity can evolve to attract Gen Z and Millennial consumers and how their demands have changed since the pandemic. They also spoke about the biggest trends in digitalisation, customer engagement, experiences, education and entertainment.
According to Chan, one of the biggest developments from the airport point of view is the growing important of F&B and luxury. “The good news is that passengers are continuing to spend in airports,” she said. “Our borders may have reopened later, but the spend is ahead of 65%. The message is clear, travellers are spending but two major components have change: F&B and luxury.
“In the last three years, we got into the habit of doing many things online, but food is something you can only enjoy in person. We are also seeing luxury spend increase and some of our luxury brands are performing better than pre-COVID.”
The pandemic has caused several shifts in the behaviour of Millennial and Gen Z Chinese consumers with experience playing a more important role during their travels. “We see that outbound mainland Chinese travellers are back to 80% of pre-COVID numbers,” added Lee. “In Hong Kong we are seeing a shift from pure shopping holidays to more of a diverse, experiential type of holiday. Experience travelling is becoming more popular.”
Offering the brand perspective, Zhang added: “The biggest shift we’ve seen in the last three years is the rise of the multichannel consumer. They buy offline, online and in department stores with all channels widely available to them. The reason for buying in any particular channel, especially travel retail, is becoming more difficult to differentiate. What’s important is to look at the whole ecosystem. We need to understand consumer behaviours even when they aren’t travelling.”
“We have to come back to the very fundamental purpose of creating real travel retail value,” Zhang added. “Our recent ‘Kiehl’s Loves Hong Kong’ campaign offered Sense of Place, retailtainment, pre-, during and post-trip engagement and multichannel capabilities and is a great example of authentic retail value.”
Commenting on how Alipay is delivering seamless omnichannel payment solutions to tech-savvy Gen Z and Millennial travellers, Lee said: “We are focusing on developing digital marketing solutions to cater to Gen Z and Millennial travellers and one great example of this is our Brand Channel project. Brand Channel is a WeChat Mini Programme where our brands and merchants can launch their own Mini Programmes, publish their offers and users can like, subscribe and get notifications.”
Does the airport need to reinvent its offer to cater to this next generation of travellers? Chan said: “The most important thing is to deliver a pleasant passenger journey even before they travel to the airport. We just rolled out our Luxury Concierge service. Luxury purchases are becoming more important and so this service connects travellers to experienced brand representatives on WeChat, Whatsapp or video call so they can communicate and reserve their favourite items even before setting foot in the airport.”
In this new landscape, how can the Trinity better work to create the all-important emotional connection with travellers? Zhang said: “In order to deliver these memorable experiences and to create emotional connections, we need space to offer a full range or services and deliver a complete brand expression. We can sometimes be so transactional in airports and we need to change that thinking.”
14:50 Coffee Break
14:10 Paul Griffiths on leading the world’s busiest airport
Paul Griffiths, CEO of Dubai Airports, carries the responsibility for the operation and development of Dubai International (DXB) – the world’s busiest airport for international passengers, as well as Dubai World Central (DWC).
Thanks to the proactive approach of being prepared and ready, DXB was able to accommodate double digit growth in passenger numbers throughout 2022, propelling annual traffic for the year to 66 million and cementing the hub’s position as the world’s busiest international airport for the ninth consecutive year.
DXB recently recorded a 41.6 million passengers in its first-half. Commenting on this excellent performance, Griffiths said: “We’re forecasting 87-89 million [passengers for full year 2023] and if we reach that we are confident that we are more than 100% back, which is great for us and the industry. It has been a remarkable recovery.
“In four years, our passenger demographic has transformed to 60% point-to-point and 40% transit passengers and that’s pushed up our total number of transactions. The business is changing and categories are changing and so customer insights have never been more important than they are now. This is due to the shift from business to more leisure travel.”
Griffiths shared his insights on the evolving passenger demographic in the world’s busiest airport and how Trinity Forum can better work together to adapt to changing consumer demands. “Historically, airport and prisons have had one thing in common. The less amount of time we detain our customers, the happier they are. Now, there is a transformation.
He continued: “In the 20 years of Trinity Forum, what we have are brands making products, airports facilitating space and travel retailers providing the process of selling those products. That relationship hasn’t changed.”
He noted that in the 21st year of the Trinity Forum: “We should call this the ‘Unity Forum’ and ensure that all stakeholders are focused on one thing – how do we unlock the customer spend that we desperately need?”
According to Griffiths, the secret to boosting customer spend and conversion is all about creating emotional connections. “Brands are trying to create that emotional connection with the customer and that is the secret to increasing spend. We need to create a great experience for our customers because that’s what brands want and what airports and retailers are trying to facilitate.
“This is a competitive business and our competitors in are competing for the transfer traffic we have. The airport infrastructure and approach is changing all over the world and we can’t be left behind.”
Griffiths also talked about the convergence of F&B and retail. He said: “F&B, retail and the whole airport experience is linked by emotion – good or bad – and we all have to unlock that together. The tax free status of airport retail is disappearing in a lot of jurisdictions. So, the channel is not just competing with domestic markets but also the very powerful online channel.”
He added: “We need to rethink the entire end-to-end operation. The legacy processes in airports need to disappear so customer have the time to shop and experience all that we have to offer.”
Commenting on discussion about how the Dubai government is reviewing the current model at DXB, Griffiths said: “Airport infrastructure is quite staggering. We have to set that in context with sustainability challenges of expanding airports around the world. We know that DXB has limited capacity at 118-120 million annual passengers, so we need a new airport and that will cost a huge amount of money to build and develop. To finance that, we are going to be reliant on non-aeronautical revenues and therefore need a very efficient non-aeronautical sales model.”
“Dubai Duty Free has been one of the most successful duty free operators, but as with everything, what was successful in the past may not be the best model today and in the future and we need to explore some options.”
Offering a final message to the industry, Griffiths added: “Let’s create that single emotion we need to awaken the now customer. Let’s transform the Trinity Forum into the Unity Forum. Brands are spending billions to create an emotional bond with their product and so airports and retailers need to be in exactly that business.
“We need to enhance the process and create the opportunity and build new partnerships to make sure we are all emotionally connecting with our customers. That’s the way we can be all be successful together.”
13:40 Keynote address – China Duty Free Group (CDFG) Executive Vice President Luke Chang
Introduced by Martin Moodie, China Duty Free Group (CDFG) Executive Vice President Luke Chang delivered a compelling presentation outlining the spectacular growth of the travel retailer and its evolving consumer offer.
Now ranked as the world’s largest travel retailer for three years in a row, CDFG achieved US$7.8 billion in operating revenue last year, Chang noted.
He said: “We have established more than 200 duty free shops across more than 100 cities in China, building long-term, stable relationships with more than 600 suppliers and over 1,300 well-known brands worldwide.
“We provide duty free goods and services to nearly 200 million domestic and international travellers each year. Our membership database now includes over 30 million premium members.”
Chang noted that over the past few years, the travel retail industry has faced the enormous challenge from the COVID-19 pandemic, but despite this, “CDFG has achieved remarkable success together with our partners,” he said.
He added this success is based mainly on three factors: a steady growth in airport sales, the rapid growth of the Hainan duty free market and the development of the CDFG online travel retail business.
Looking ahead, Chang said CDFG’s strategic development priorities will focus on four areas. These are improving the product offer and upgrading the shopping experience; strengthening operational capabilities and accelerating digital development; leveraging membership data to enhance value and benefits for customers; expanding offline channels; and delivering the CDFG development strategy for Hainan.
Chang concluded: “I want to express our great pleasure and honour in taking part in the Trinity Forum, where we can share our insights and experiences with global travel retail partners. Looking ahead, CDFG is confident and eager to foster deeper collaborations and dialogue for the growth and advancement of the entire travel retail industry.”
13:20 Building a Better Tomorrow with Hong Kong International Airport
In the opening keynote presentation of the Trinity Forum 2023, Airport Authority Hong Kong Chief Executive Officer Fred Lam outlined the exciting development plans for Hong Kong Airport City and the Greater Bay Area and how the company plans to turn Hong Kong International Airport (HKIA) from a city airport into an airport city.
“Trinity was last in Hong Kong eight years ago and a lot has happened since then,” Lam said.
Pre-pandemic, HKIA served 75 million passengers and five million tonnes of cargo. In recent years, HKIA reclaimed 650 hectares of land to build a 3,800 metre long third runway. It also began construction on a new Terminal 2 Concourse, expanded the existing Terminal 2 and introduced a new baggage handling system. The project began in 2016 and will be completed by the end of 2024.
Lam said: “Our vision for the future is to handle 120 million passenger and ten million tonnes of cargo. We should be able to achieve this goal by 2035, 10 years after we finish our third runway. Our goal is to transform our airport from a city airport into an airport city.
How is this transformation taking place? According to Lam, HKIA has embraced technology to enhance operational efficiency and improve every aspect of airport operations from Artificial Intelligence (AI) to robotics and autonomous vehicles.
“We’ve used the last three years to transform our terminals and enhance the airport itself. From media walls to the sky bridge and by offering seamless tech-driven check-in and boarding experiences.
“Before, our service only began when passengers stepped into the terminal. Today, we can begin the airport experience before they even leave their homes. We pioneered the concept of City Check-ins and now we take it one step further by launching Home Check-ins too. Through this, travellers can check-in their bags from home and track them in real time.
“Since we reopened our borders early this year, passengers have started coming back in droves. We have renovated our luxury retail offer and have recovered to about 65% of pre-pandemic levels. However, some of the luxury brand turnover in our airport has already exceeded pre-pandemic levels.
“We have also improved F&B by introducing Michelin dining experiences at different price levels with 14 new Michelin brands now in the airport. We have also introduced a fully automated unmanned shop.”
Recently, HKIA opened a dazzling Sky Bridge. To maximise space in the Sky Bridge, HKIA opened the Intervals Sky Bar and restaurant which boasts incredible views and a glass floor.
Lam also previewed plans for SkyCity and 11Skies, which will offer 3.8 million sq. ft of retail space. Once completed, 11Skies will be the largest retail dining and entertainment destination in Hong Kong. Lam said: “It’s not just a shopping mall. It will have 800 shops, 120 outlets and 570,000sq ft of indoor entertainment.”
Lam also outlined plans for an expanded Asia World Expo convention centre and a new, 20,000 capacity arena. “In the past, airlines brought traffic to but we wanted to explore how airports can do something similar. I hope our SkyCity project can transform people’s understanding of what airports can be.”
Importantly, Lam talked about capturing opportunities in the Greater Bay Area. “We no longer see ourselves just as an airport for a region with 7.5 million people but as an international airport for a region of 86 million people. The Greater Bay Area is the richest region in the whole of China with the highest GDP per capita.”
To connect the Greater Bay Area, HKIA has created seamless transport infrastructures from ferries to City Terminals and even Park and Fly services to make HKIA the airport of choice for Chinese travellers in the region.
13:00 Opening remarks and welcome
The Moodie Davitt Report Founder & Chairman Martin Moodie opened The Trinity Forum, welcoming the audience to his home city of “resurgent” Hong Kong.
He gave thanks to Airport Authority Hong Kong Chief Executive Officer Fred Lam and the airport company’s commercial team led by Cissy Chang for their excellent support of the event.
Setting the scene, Moodie said: “When I created the event back in 2003, it was an effort to foster an enhanced mutual understanding between sector stakeholders in an attempt to serve the travelling consumer better and to grow the collective pie rather than focusing – in often adversarial manner – as to who got the biggest slice.
“Simply stated goals, devilishly hard to deliver.”
Moodie referred to a seminal address by then Nestlé Vice-Chairman and CEO Peter Brabeck-Letmathe, in which he said travel retail 2003-style had become “fat and comfortable” after nearly five decades of a privileged existence of selling on price against a backdrop of highly taxed domestic markets and ever-increasing passenger traffic.
There needed to be, Brabeck-Letmathe contended, a “fundamental rethink of the relationship between brands, retailers and airports, balancing investment and return, risk and reward”.
The “splendid isolation of the industry”, he argued had made it blind to the challenges of our time. “We had to come out of a ‘closed shop’ and turn problems into opportunities. There is no better time to act than in a time of crisis.”
“Roll forward 20 years,” said Moodie (pictured above), bringing things back to the present day. “Well boy have we had a crisis. And while our industry in fact displayed remarkable resilience to crisis; attention now, I contend, switches to how fit we are to exploit the recovery.
“Everywhere we see passenger numbers making an encouraging revival. But in many locations we see soft retail spending. As always in our industry it’s not simply about how many are travelling but who they are and how they are behaving.
“The first two are largely beyond the industry’s control, the third is not. I would contend that the principles of Trinity are today more important than ever. But principles 2023-style. Underpinned by a focus on people – the people who serve our industry and the people who our industry serves – of planet and, naturally, of partnership.”
“People. Passengers. Travellers. Some of whom – but not enough – are travelling shoppers or travelling diners. Consumer-centricity is a term you will hear often, I suspect, during this Forum. A focus on, no, an obsession with, meeting the needs and desires of the travelling consumer must be the starting and end point for our industry. The days of silos – both internally and between stakeholders – should be consigned to history.”
The Moodie Davitt Report President Dermot Davitt (above) opened with a note of thanks to attendees, event partners and event co-organisers – Airports Council International – ACI World and ACI Asia-Pacific and Middle East.
“These associations perform a critical job in representing and advancing the interests of their members – and our industry,” he said.
On delivering on a consumer-centric mission, Davitt said: “The Trinity must ensure a fair and just relationship between brands, retailers and airports, encouraging shared upside and minimising down side not for one but for all.
“As Martin said – in fact as the last 20 years have testified – easier said than done. But if you don’t embark on a journey, you will never reach a destination.
“Now we’re tracking a path forward to another P in addition to the Ps mentioned earlier of people, planet and partnership and that’s progress. Progress through innovation – digital, in-store, out of store, in fact right through the traveller journey. All underpinned by an unrelenting focus on the consumer.”
9:00 ACI Airport Workshop
TUESDAY 24 OCTOBER