Travel Retail Market Size, Share & Trends Analysis Report By Product (Perfume And Cosmetics, Wines And Spirits), By Distribution Channel, By Region, And Segment Forecasts, 2024 - 2030

Travel Retail Market Size & Trends  

The global travel retail market size was estimated at USD 69.03 billion in 2023 and is expected to grow at a CAGR of 9.4% from 2024 to 2030. Some of the major factors driving the growth of the global market are increasing travel and tourism activities across the globe, expansion of travel infrastructure, and increasing focus on luxury and premium products. High-end brands are expanding their presence in travel retail, offering duty-free and travel-exclusive collections. This trend is particularly strong in categories such as cosmetics, fragrances, fashion, and electronics.

According to the Bureau of Transportation Statistics, domestic and international passenger enplanements in the U.S. reached 82.4 million in February 2024, representing an 8.6% increase compared to 75.9 million in February 2023. This significant rise in passenger numbers has positively impacted the travel retail market by driving higher foot traffic through airports and travel hubs. As more travelers pass through these points of sale, the demand for duty-free goods, luxury items, and travel essentials increases, leading to greater sales and contributing to the overall growth of the travel retail market.

In Q1 2024, international arrivals (overnight visitors) reached 97% of 2019 levels, signaling a near-complete recovery to pre-pandemic figures. Approximately 285 million tourists traveled internationally during this period, representing a 20% increase from Q1 2023. This robust rebound in international arrivals and year-over-year tourist growth is expected to greatly stimulate demand within the travel retail industry. This surge in global travel activity will drive higher foot traffic in duty-free shops, airport retail outlets, and other travel retail venues, leading to increased sales and revenue opportunities. Consequently, travel retailers can expect enhanced market dynamics, greater consumer spending, and the potential for expanded product offerings and services to cater to the growing influx of international travelers.

The pent-up demand for travel post-pandemic has resulted in a surge of international tourists eager to explore and spend. As a result, travel retail operators are witnessing increased foot traffic and sales. Airports and other travel hubs are capitalizing on this trend by enhancing their retail offerings, expanding product ranges, and creating more engaging shopping experiences to attract and retain customers.

The evolution of consumer preferences towards luxury and high-quality products is shaping the travel retail landscape. Travelers are increasingly seeking exclusive, premium brands and products, driving demand for luxury goods, cosmetics, fragrances, and high-end alcoholic beverages. Retailers are responding by curating a diverse portfolio of premium offerings and leveraging brand partnerships to cater to the discerning tastes of international tourists.

In addition, regulations governing the establishment and operation of duty-free stores at airports and other points of entry create a favorable business environment for retailers. These laws often include tax exemptions and reduced tariffs on specific products, enhancing the price competitiveness of duty-free goods. By capitalizing on these regulatory benefits, travel retail companies can attract a larger customer base, increase sales volumes, and improve profit margins. Moreover, these advantages can enhance the overall shopping experience for travelers, further driving consumer demand and contributing to the sustained growth and expansion of the market.

Product Insights

The demand for perfumes and cosmetics accounted for the market share of 41.51% in 2023. The increasing number of international travelers provides a captive audience for these high-margin products, often viewed as convenient and desirable purchases during travel. Duty-free pricing offers significant savings, making luxury brands more accessible and appealing. In addition, travelers are drawn to exclusive product ranges and travel-exclusive sets that are not available in regular retail outlets. The convenience of purchasing high-quality beauty products at travel hubs, coupled with the allure of tax-free shopping, drives robust sales growth in this segment.

The demand for electronics and gifts are projected to grow at a CAGR of 11.3% over the forecast period of 2024-2030. The increasing prevalence of tech-savvy travelers has heightened interest in acquiring the latest gadgets, often available at competitive prices in duty-free outlets. In addition, the convenience of purchasing electronics while traveling, combined with tax-free pricing, makes these items more attractive. The exclusivity of travel retail offerings, alongside a diverse product range, drives increased sales and contributes to market growth in this sector.

Distribution Channel Insights

The demand for travel retail products at airports and airline outlets held a market share of 55.54% in 2023. The growth of the segment is mainly driven by increasing air traffic, creating a larger customer base for retail outlets. In 2023-24, India's international air traffic experienced a significant surge, reaching 69.7 million passengers and marking a 22.5% year-on-year growth, outpacing the growth of domestic air traffic. This substantial increase in international travelers has boosted the demand for travel retail products at airport and airline outlets, as the higher passenger volume drives greater foot traffic and sales opportunities, particularly for duty-free items, luxury goods, and travel essentials.

The demand through railway station outlets/shops is projected to grow at a CAGR of 9.0% over the forecast period of 2024-2030. The increasing number of rail passengers, driven by improved rail infrastructure and expanded services, enhances foot traffic in railway stations. The convenience and accessibility of retail outlets within these transit hubs cater to travelers seeking quick, high-quality purchases during their journey. In addition, the availability of a diverse range of products, from snacks and beverages to travel essentials and souvenirs, meets the immediate needs of travelers.

Regional Insights

North America Travel Retail Market Trends

The travel retail market in North America held a market share of 12.56% of the global revenue in 2023. Major airports in North America have been investing heavily in modernization and expansion projects. These upgrades not only increase capacity but also improve the shopping experience for travelers, making airports more attractive as retail hubs. The growth is further driven by an expanding middle class, higher disposable incomes, and the resurgence of business and leisure travel post-pandemic.

U.S. Travel Retail Market Trends

The travel retail market in the U.S. is expected to grow at a CAGR of 9.2% from 2024 to 2030. In the U.S., several travel retail laws and regulations provide benefits to companies, potentially impacting market growth positively. One significant regulation is the duty-free allowance, which permits travelers to bring back a certain amount of goods without paying import duties. This allowance incentivizes travelers to purchase higher quantities of goods, directly boosting sales for travel retailers.

Asia Pacific Travel Retail Market Trends

Asia Pacific emerged and accounted for a revenue share of around 52.91% in the year 2023. Enhanced airport infrastructure and the proliferation of low-cost carriers have bolstered passenger traffic while rising disposable incomes have fueled demand for premium and luxury goods. Strategic partnerships between retailers, airports, and brands, alongside innovative digital technologies, are enhancing the shopping experience and catering to diverse consumer preferences.

Europe Travel Retail Market Trends

The Europe market is projected to grow at a CAGR of 9.3% from 2024 to 2030. In Europe, the growth of travel retail is buoyed by a dense network of major international airports and robust intra-European travel. The region benefits from a strong tourism industry, diverse cultural attractions, and a high concentration of affluent travelers seeking premium and duty-free products. Advanced airport facilities and convenient transportation infrastructure contribute to increased passenger flows, while strategic alliances between retailers and transport operators optimize the retail experience.

Key Travel Retail Company Insights

The competitive landscape is characterized by intense rivalry among key players striving to capture a significant share of global passenger spending. Established operators such as Dufry, Lagardère Travel Retail, and DFS Group dominate with extensive networks of duty-free shops and concessions in major airports worldwide. These companies leverage strategic alliances with brands, innovative marketing strategies, and advanced digital technologies to enhance customer engagement and drive sales.

Recent Developments

• In March 2024, Lagardère Travel Retail unveiled an exclusive partnership with RaiseLab, a trailblazing firm focused on promoting open innovation. This strategic alliance underscores Lagardère Travel Retail's commitment to becoming a leader in innovation within the travel retail sector, aiming to expedite the deployment of cutting-edge solutions.

• In July 2023, Micro Mobility Systems AG, the global leader in premium mobility solutions, partnered with Dufry, a prominent player in the global travel industry. This partnership aimed to redefine the travel retail experience by integrating Micro's innovative product and solution offerings with Dufry's wide global outreach and expertise.

Travel Retail Market Report Scope

Global Travel Retail Market Report Segmentation

This report forecasts revenue growth at global, regional & country levels and provides an analysis of the latest trends and opportunities in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the travel retail market on the basis of product, distribution channel, and region.

• Product Outlook (Revenue, USD Billion, 2018 - 2030)

  • Perfume and Cosmetics

  • Wines and Spirits

  • Fashion and Accessories

  • Tobacco Products

  • Electronics and Gifts

  • Food and Confectionery

  • Others

• Distribution Channel Outlook (Revenue, USD Billion, 2018 - 2030)

  • Airport and Airlines

  • Train Stations

  • Ferries

  • Others

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • UK

    • Germany

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia & New Zealand

    • South Korea

  • Central & South America

    • Brazil

  • Middle East & Africa (MEA)

    • South Africa