Hub transition: Airports

1 Nov 2016 by Clement Huang
An illustration of the huge indoor waterfall planned for Singapore's Jewel Changi Airport

Strolling through the departures terminal at Hong Kong International Airport is a shopaholic’s dream. Gleaming storefronts house luxury designer goods, the latest tech trends, premium luggage and unusual souvenirs. DFS Duty Free tantalises travellers with high-end cosmetics, perfumes, wines and spirits, and there’s a wide range of dining outlets ready to replenish you after a shopping frenzy. Add in a diverse number of leisure options, and you could almost forget why you’re there in the first place. It’s a phenomenon that’s being replicated at international hubs worldwide.

The relationship between airports and retail is a natural fit; after all, brands have a captive audience of affluent customers with idle time on their hands. Sparks first flew in 1947, when businessman Brendan O’Regan introduced the revolutionary idea of duty-free shopping to Ireland’s Shannon Airport and the concept spread like wildfire.

“What started as a relatively small-scale activity, meeting the immediate needs of travellers, has emerged as both an important aspect of passengers’ travel experience and a major financial contributor to the aviation sectors,” says Colm McLoughlin, executive vice chairman and CEO of Dubai Duty Free. “Without duty free and travel retail revenue, airports would not be able to provide the facilities and services they do.”

A recent study by Credence Research found that the airport retail market was set to grow to US$48 billion globally by 2021 – and what retailer could say no to a slice of that pie? “Once passengers step through the security scanner a ‘golden hour’ begins. Most are relatively prosperous; all are briefly at loose ends,” says Saba Tahir, vice president of purchasing at Dubai Duty Free. Meanwhile, Italian sunglasses manufacturer Luxottica calls airport sales “the Formula 1 of retail”.

Emerging in tandem is a trend to introduce more leisure facilities at airports – happy passengers make for happy sales reports. Common themes include a focus on F&B options, lounge facilities, relaxation areas and technology, while more innovative solutions have led to things like Airbrau, an on-site brewery and beer garden in Munich, and a museum of classical paintings in Amsterdam’s Schiphol Airport.

Keen to see what Asia’s much-lauded airports are doing in this arena, Business Traveller Asia-Pacific looks at the latest offerings around the region.

Changi Airport's butterfly garden in T3

 Singapore Changi Airport

Changi Airport needs little introduction, consistently rated as the best airport in Asia-Pacific by our readers (see our awards report on page 44). With more than 350 retail outlets, business is booming. Sales at Singapore’s Changi Airport hit a record high of S$2.2 billion (US$1.6 billion) in 2015 – an 8 per cent growth over the previous year.

“Retail and leisure is part of the airport experience at Changi,” says Teo Chew Hoon, senior vice president, airside concessions of Changi Airport Group. “Passengers can watch a movie, take a stroll in the butterfly garden, swim a couple of laps in the rooftop pool and shop for a wide range of goods.”

New developments include the opening of a DFS Wines & Spirits duplex in Terminal 3 (May, 2015) and Terminal 2 (July, 2016), featuring the Raffles Long Bar, where travellers can sample the famous Singapore Sling; the Whiskey House, showcasing travel-exclusive blends; plus brand boutiques for the likes of Dom Perignon and Absolut.

The airport has also introduced a number of innovative retail concepts to incentivise shoppers. These range from the launch of iShopChangi, an e-commerce platform that allows travellers to pre-order duty-free products at home, to the “be a Changi Millionaire” lucky draw promotion for shoppers, which has so far crowned six overnight millionaires. A new loyalty programme, Changi Rewards, also means purchasing goodies will earn points that can be redeemed for vouchers or miles.

Terminal 4 is set to open in 2017, with a capacity of 16 million passengers and 17,000 sqm of retail and dining space housing more than 80 outlets. Even more exciting is the highly anticipated debut of Jewel Changi Airport in 2019 – the enormous mixed-use complex has already received critical acclaim for its groundbreaking design, which features an indoor forest and the world’s largest indoor waterfall, and will house more than 90,000 sqm of retail space.


Sydney Airport T1 International terminal

Sydney Kingsford Airport

Australia’s busiest airport is also the world’s oldest commercial international airport, first opened in 1919. To cope with modern demands and changing traveller needs, it’s in the midst of a multibillion-dollar renovation with passenger experience in mind.

“Today, Sydney Airport is so much more than a facilitator of travel,” says Glyn Williams, general manager retail at Sydney Airport. “There’s a greater emphasis on the overall airport experience. Passengers expect to see a contemporary retail offering similar to what they might see at a premium shopping centre.”

The retail strategy is aggressive, with efforts to secure brands that don’t appear in any other Australian airports, or even Australia itself. To that end, a new luxury precinct in Terminal 1 has just opened its doors, with global designer brands such as Max Mara, Tiffany & Co and Hugo Boss. Meanwhile, Heinemann Tax & Duty Free completed work on the world’s largest stand-alone airport duty-free store back in May, offering liquor, perfume and cosmetic products around 20-30 per cent cheaper than downtown Sydney.

In line with the rising F&B trend, there’s been a focus on food offerings, with a new premium dining area. “There’s a strong appetite for celebrity chef-driven food at the airport that delivers a ‘wow’ factor to passengers,” explains Williams. “We’re also addressing customer feedback for new innovations in food and beverage concepts and a wider selection of healthy food options.”

The airport has launched celebrity eateries such as The Bistro by Wolfgang Puck, with Kitchen by Mike (Mike McEnearney) due to open soon. Healthy options are also increasing, with things like Sumo Salad Green Label, and a new “bespoke burger” concept has been introduced at Benny Burger in T1, using ethically sourced and sustainable ingredients. Heineken House has also just launched in T1, where customers can sample first-to-market brews.


Virtual golf simulator at HKIA

Hong Kong International Airport

It’s not unusual for locals to head to HKIA solely to visit the cinema. Situated landside in T2 is the biggest IMAX in Hong Kong, showcasing the latest Hollywood blockbusters in both 2D and 3D. Also in T2 is the Green Live Air virtual golf simulator, where you can sharpen your swing on eight courses from The Belfry to St Andrews. Meanwhile, this month marks the culmination of a packed arts, culture and music programme. Catch the Bruce Lee “Alive” Exhibition in the Ground Transportation centre.

Airside, retail reigns supreme. Luxury international brands from Burberry to Bulgari abound in T1, while more mid-market and local brands are found in T2, from where the majority of low-cost carriers depart. The airport has introduced a unique “I love Hong Kong” zone on Level 7 of the East Hall, which comprises 15 well-known local brands including Shanghai Tang and Disneyland.

Last month, HKIA announced plans to build Skycity – a massive integrated development next to Terminal 2. The 668,000 sqm complex will consist of a hotel, plus retail, dining and entertainment facilities. The project is scheduled to be complete by 2021.


Dubai Duty Free shopping complex at Concourse C

Dubai International Airport

Dubai is already the busiest airport in the world for international passenger traffic, with 90 million people expected next year. As such, the last few years have seen major expansions.

Terminal 3 opened in 2008 bringing with it a wealth of retail and leisure options including Timeless Spa facilities, a Zen Garden and an airside hotel – complete with a swimming pool, gym and Jacuzzi. T3 is also now home to two large Apple Stores (near B15 and A12). More recently, Concourse D launched in February this year, boosting capacity and introducing nine lounges, a range of F&B options and a massive duty-free offering with more fashion brands, cosmetics, perfumes and liquor.

“Globally, a lot of hub airports focus on the very high luxury end, which is smart in terms of margin, but our brief at Dubai Duty Free is to have something for everybody,” says vice president Saba Tahir. Dubai Duty Free plans to add an additional 80,000 sqm of new retail space in time for the Dubai Expo 2020.

Tailoring the experience to customer demographics and shopping habits (gleaned from boarding pass information) has played a large role at Dubai. “Chinese travellers, for example, like to buy luxury products of well-known brands, particularly skincare products like Estee Lauder and Lancôme,” says Tahir.

Coming up, a major facelift is being planned for the 16-year-old Concourse C, further increasing capacity and retail options. Dubai is predicting to make a cool US$1.8 billion in sales in 2016.


Incheon International Airport retail

Seoul Incheon Airport

In terms of leisure facilities, Seoul’s Incheon Airport is a clear winner amongst its regional rivals, boasting a golf course, spa, indoor ice skating rink, indoor gardens, a museum and even a casino.

Incheon is also a multiple “Best Duty Free in the World” winner at the Business Traveller Asia-Pacific Awards, with 78 duty-free shops including the popular Lotte Duty Free and Shilla Duty Free. But the airport is not resting on its laurels, and passengers can now reap the rewards of an ambitious US$4.6 billion expansion plan launched in 2013 to increase passenger handling capacity by 40 per cent and renovate the retail offering in Terminal 1.

This is bolstered by a thriving dining scene that includes local favourites such as Meihao, Bon Pi Yang and Sonsoo Bansang. The airport also recently welcomed Johnnie Walker House – a new luxury Scotch whisky embassy. The space also includes a “whisky scent bar” where travellers can learn to appreciate the liquid’s subtle flavours and aromas. Specialist brand ambassadors are available on site.

Terminal 2 is scheduled to open in 2017, as phase three of Incheon Airport’s expansion plan to get ready for the 2018 Winter Olympics in Pyeongchang. New concession and retail stores have been promised, along with a number of on-site leisure attractions that include koi ponds, indoor gardens and exhibition areas.


Comfortable sofas replace plastic seats in Tokyo Narita Airport's Terminal 3

Tokyo Narita Airport

With more and more flights opting to fly to the more accessible Tokyo Haneda Airport, Narita Airport has had to up its game in recent years. However, the opening of a new low-cost carrier terminal last April has seen a shift away from luxury outlets and a focus on other distinctive offerings.

For the health conscious, reflexology and body-care massage services are available throughout both terminals 1 and 2, while there is also a novel Oxygen Bar to enjoy the therapeutic effects of pure O2. Other leisure facilities include several kids’ parks, beauty salons and even a pet hotel, complete with on-site veterinarian and clipping salon. There’s also the 24-hour convenience store Lawson, particularly useful for customers taking early-morning and late-night flights.

A highlight is the enormous food court (it can house 400 customers at once), featuring seven outlets including noodle shops Miyatake Sanuki Udon and Ringer Hut, and Tatsu Sushi, a standing sushi bar.


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