Are Airport Shops Profitable?

Profitability of Airport Shops

• Extended hours allow shops to serve passengers at all times.
• Duty-free shopping attracts customers looking to save money on items like perfumes, alcohol, and luxury goods.
• Airport shops rely heavily on passenger footfall for revenue.
• Sales of luxury goods are declining at airport shops as big spenders stay home.
• Airport retailers are testing new store formats and click-and-collect options to boost revenue.

Revenue Streams for Airports

• Global airport revenues were $172.2 billion in 2019.
• Airports earn money through various sources including duty-free shopping, rents from shops, and advertising.
• Over half of airport revenue is from passenger fees.
• Key revenue sources include parking charges and collaborations with local businesses.

Top Sellers at Airports

• Beverages, particularly bottled water, are the top-selling items at airports.
• Food items like brisket and crabs are popular at certain airport locations.
• Water remains a popular choice among travelers for hydration during flights.
• Duty-free shops offer tax-free goods to travelers.

Food and Beverage at Airports

• Running a restaurant at an airport comes with high costs and regulations.
• Food businesses at airports face pricing restrictions set by airport authorities.
• Passengers tend to spend more on retail and restaurants at airports, with unique local options available.
• Airports employ strategies to encourage passenger spending, such as strategically designed walkways and limited shortcuts.

Miscellaneous

• Airport shops benefit from duty-free shopping and can become global brands.
• Real estate leasing contributes to the overall passenger experience and airport profitability.
• Airport hotels likely have higher revenue per available room (RevPAR) compared to industry averages due to their captive audience.
• Water bottles occupy the top-selling spots at airports.