When Vienna Airport reported revenues of €1.13 billion for 2025, it was a new record for the airport that had counted 32.6 million passengers last year. Interestingly: roughly a quarter of that turnover came from commercial activities such as retail and food & beverage. For joint CEO and COO Julian Jäger, the logic behind those figures is straightforward: “Quality drives dwell time, dwell time drives spending, and spending benefits everyone involved.”
His observation captures a fundamental shift currently reshaping travel retail. For decades, the sector was built on a relatively simple equation: more passengers meant more sales. Growing tourism, expanding airline networks and rising international mobility continuously brought new customers into airports. Retailers refined their assortments, airports expanded commercial areas and brands embraced travel retail as a unique gateway to international consumers. Today, that equation no longer holds in the same way.
According to Kearney’s latest industry assessment, travel retail sales have now lagged passenger growth for three consecutive years. Passenger traffic has surpassed pre-pandemic levels, yet average spend per traveler continues to decline. What initially appeared to be a temporary post-pandemic imbalance is increasingly being recognised as a structural disconnect. Travel retail sales remain around 13% below 2019 levels despite record passenger volumes.
People are travelling more. They are simply not shopping in the same way. That observation may prove to be one of the defining challenges of travel retail’s next chapter.
More Passengers, Different Passengers
The most obvious explanation would be economic pressure. Inflation, rising travel costs and geopolitical uncertainty have undoubtedly affected consumer spending. Yet the story runs deeper.
“The demographics and travel patterns are really what drive our business,” explains Nigel Keal, President of the European Travel Retail Confederation (ETRC). Passenger numbers alone reveal surprisingly little about commercial performance. What matters increasingly is who those passengers are, where they come from, where they are travelling and how they behave.
“Quality drives dwell time, dwell time drives spending, and spending benefits everyone involved”
Julian Jäger, Vienna Airport
Before the pandemic, many European airports benefited enormously from Chinese and Russian travelers, two customer groups widely regarded as among the strongest spenders in travel retail. That landscape has changed dramatically. Chinese travel patterns remain different from previous years, while Russian travelers have largely disappeared from many European hubs. At the same time, Indian travelers are emerging as an increasingly important growth segment, while American travelers are playing a larger role in many markets. The impact can be dramatic.
At Vienna Airport, passenger spending varies significantly depending on traveler profile. According to Jäger, a Ryanair passenger flying to Palma spends approximately €3–4 in duty free. An Austrian Airlines passenger travelling to Bangkok spends around €7. Chinese passengers spend approximately €30 on average. “There is no average passenger,” Jäger says. “The commercial environment must cater to very different needs and spending capacities.”
Julian Jäger, Joint-CEO and COO Vienna Airport VIE /// © Flughafen Wien
The example illustrates a reality increasingly recognised throughout the industry: understanding passenger quality has become just as important as understanding passenger quantity.
This is particularly relevant because global travel patterns themselves are changing. According to Kearney, geopolitical tensions are already influencing travel choices. Fifty-seven percent of travelers surveyed expect future destination decisions to be influenced by geopolitical developments, while nearly two-thirds of duty-free shoppers say political and economic tensions affect which brands they purchase. Local heritage and domestic brands are also becoming increasingly important factors in purchasing decisions.
The traveler of tomorrow may not only spend differently. They may travel differently, shop differently and value different things altogether.
Beyond the Duty-Free Mindset
The changes are not limited to passenger demographics. Travel retail itself is evolving.
Historically, duty free was largely associated with price advantage. Travelers purchased cigarettes, spirits or cosmetics because they could obtain them more cheaply than at home. The concept was fundamentally transactional. That logic still exists, but it no longer defines the sector.
Increasingly, travel retail is becoming an experience business. “People want to treat themselves when they travel,” says Keal. “It’s not only about saving money anymore.”
This may be one of the most important transformations taking place within airports today. Rather than merely selling products, retailers are creating environments designed around discovery, premiumisation and aspiration. Beauty brands use airports to launch products before an international audience. Luxury labels create highly visible showcases in major hubs. Spirits producers increasingly focus on exclusive editions designed specifically for travel retail. The journey itself becomes part of the shopping experience.
Jäger sees a similar shift. “The old airport model was based on the assumption that passengers expect to pay more and get less,” he says. “When you reverse that—when you offer more quality, better service and a pleasant environment—behaviour changes.” He argues that travelers increasingly stop comparing prices and start evaluating value. “In retail real estate terms, this is about moving from purely transactional spaces to experiential environments.”
Few sectors illustrate that transformation more clearly than airports. Unlike traditional retail destinations, they benefit from one resource that many shopping centres would envy: guaranteed dwell time. The challenge is converting that time into meaningful engagement.
Competing for the Passenger’s Attention
Yet creating attractive retail environments has become increasingly difficult. Travelers have never been more connected, informed or distracted. The smartphone has fundamentally altered airport behaviour. Time once spent browsing stores is increasingly spent online. Lounges have become more attractive. Food and beverage concepts continue to improve. Security procedures and digital services compete for attention. Everyone within the airport ecosystem is effectively competing for the same traveler—for time, attention and ultimately spending.
As Keal notes, airports generate revenue from a growing number of sources: retail, food & beverage, lounges, parking, advertising and mobility services. Each competes for a share of the passenger’s time and spending. The challenge is no longer simply attracting passengers into stores. The challenge is remaining relevant once they arrive.
This becomes particularly important when considering younger travelers. According to research conducted by the University of Stirling for ETRC, changing consumer behaviour, digital competition and evolving customer expectations represent some of the most significant forces reshaping the industry. Traditional retail offers are increasingly challenged by demands for greater personalisation, stronger experiences and more relevant brand engagement. Travel retail can no longer rely on captive audiences. Instead, it must earn its attention.
Why Data Becomes the New Currency
If there is one theme that repeatedly emerges from conversations with industry leaders, it is data. For decades, travel retail was surprisingly fragmented when it came to information sharing. Airports, retailers and brands often operated within highly competitive concession structures where commercial information remained closely guarded.
That mindset is beginning to change. “For too long, the industry has treated data as something to protect rather than something to share,” says Nigel Keal, President of ETRC.
Julie Lassaigne, Secretary General of ETRC, believes the pandemic accelerated that realization. “It showed very clearly how dependent the industry is on collaboration and information sharing.”
Data is becoming the foundation upon which future travel retail strategies will be built. The University of Stirling study identifies limited data sharing and insufficient exploitation of customer insights as key weaknesses across the sector. At the same time, airports represent one of the richest data environments in retail. Passenger flows, destinations, dwell times, purchasing patterns and demographic information all offer opportunities to better understand customer behaviour. In practice, however, much of that data remains fragmented. Airlines, airports and retailers still operate in separate information silos, and even anonymized passenger data is rarely shared systematically.
For airports, retailers and brands alike, the challenge is no longer gathering information. It is learning how to use it collectively. While commercial sensitivities and privacy regulations continue to limit data sharing, the industry is gradually moving toward more collaborative approaches. Passenger analytics and AI-driven insights are increasingly seen not as competitive threats but as tools that can improve the performance of the wider ecosystem and generate revenue.
Collaboration Becomes a Business Model
The same shift can be observed in the industry’s commercial relationships. One of the most interesting conclusions of the Stirling study is that future success may depend less on identifying the perfect contractual model and more on building stronger partnerships between airports, retailers and brands.
For decades, airport retail was largely governed by concession agreements built around Minimum Annual Guarantees (MAGs). These models worked exceptionally well during periods of uninterrupted growth. The pandemic exposed their limitations.
According to the Stirling researchers, resilience increasingly depends on flexibility, trust and a better alignment of risk and reward. The study concludes that no single business model can serve every airport equally well. Different airports require different approaches, depending on passenger profiles, market maturity and commercial objectives.
Julie Lassaigne believes that this collaborative mindset will become increasingly important. Travel retail, she argues, functions as an ecosystem. Airports, retailers, brands and regulators are deeply interconnected. Success increasingly depends on how effectively these stakeholders work together rather than how aggressively they negotiate against one another. This is a significant departure from the traditional perception of travel retail as a collection of separate commercial interests. Increasingly, it is becoming a shared value chain.
“Understanding passengers is no
longer enough. The real challenge is
learning how to use that knowledge collectively”Nigel Keal, President ETRC
Operating in an Age of Volatility
If the past five years have taught the industry anything, it is that growth can no longer be taken for granted. The Kearney report identifies geopolitical fragmentation, technological disruption, social change, trade tensions and climate-related challenges as defining forces shaping the sector’s future. Around a quarter of the global travel retail market is now exposed to areas of heightened geopolitical risk. Meanwhile, changing trade policies, shifting air routes and evolving consumer preferences continue to reshape demand patterns.
In this environment, resilience becomes as important as growth.
The Stirling study arrives at a similar conclusion. Airports and retailers that remain dependent on a single customer group, a single revenue stream or a rigid commercial model may find themselves increasingly vulnerable. Those capable of adapting to changing passenger flows, embracing new technologies and building stronger partnerships are likely to perform better. Volatility, in other words, is no longer the exception. It is becoming part of the business model.
A Marketplace in Motion
Travel retail has always reflected broader changes in society. The rise of mass tourism transformed it. Globalisation accelerated it.
Digitalisation disrupted it. Now a new phase is emerging.
What remains unchanged is people’s desire to travel. Despite economic uncertainty and political tensions, global mobility continues to grow. The question is no longer whether passengers will return. They already have.
But passenger growth alone is no longer enough. Commercial success increasingly depends on understanding travelers, creating experiences, sharing data and building partnerships capable of adapting to constant change. The question is how airports, retailers and brands create value once passengers arrive. The answer appears to lie in a combination of experience, data, collaboration and adaptability.
Travel retail may have begun as a business built around tax advantages and convenience. Today, however, passenger growth alone no longer guarantees commercial success. For airports, travel retail specialists and brands alike, the challenge has become clear: the future of travel retail will be defined not simply by what travellers buy, but by how successfully commercial spaces transform the journey itself into part of the experience.
Originally published in ACROSS Magazine Issue 2/2026
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