As Omicron Surges, Dubai Airport Fully Reopens And Duty-Free Sales Of $960 Million Are Forecast

The world’s busiest international airport, prior to the onslaught of the Covid-19 pandemic, has generated just shy of $24 million in a three-day retail extravaganza as it gets back to 100% operational capacity. The result will help in the drive to achieve annual sales of $960 million this year.

At Dubai International Airport—where all terminals, concourses, lounges, restaurants, and retail outlets are now open—the core retailer Dubai Duty Free marked its 38th anniversary with a 25% discount on a large selection of products from December 18-20.

The 72-hour sale—an anniversary event that takes place every year in December—was extended, this time, to the retailer’s home delivery and click-and-collect customers, producing sales of $23.9 million. The uplift on the same period last year was 24.5%, but the figure is still less than half of the pre-pandemic peak: in 2019 the event raised $57.4 million and, over the full year, sales crossed the $2 billion mark.

That comparison underlines the still parlous trading conditions in the airport retail channel which are traffic dependent. Data released this month from seat analyst ForwardKeys places Dubai International fifth in terms of international transit market share with 5.9%, which represents a slide from top position in 2019 when the hub had a commanding 7.7% share. The gateways that have moved ahead of it are, in rank order: Amsterdam Schiphol, Frankfurt, Istanbul and regional Middle East rival Doha in Qatar.

Nevertheless, compared to many other hubs, Dubai International Airport has more going for it than many, and it remains the world’s top destination city ahead of Cancun in Mexico. Over the past 18 months of the pandemic, there has been a steady increase in passenger numbers, which has intensified. Traffic reached 10.6 million in the first half of 2021, while growth in the third quarter, plus a surge in October, took the year-to-date numbers to almost 21 million.


Targeting close to $1 billion this year

Ramesh Cidambi, the chief operating officer at Dubai Duty Free recently told that based on the strong traffic and subsequently better store sales in October and November, the retailer has upgraded its full-year sales forecast to $960 million. November sales reached 69% of pre-pandemic levels for the same month in 2019.

He added: “Recovery in all markets in November had been very strong (excluding the Far East and Australia and New Zealand). Considering that the passengers going to China were nearly 17% of our business in 2019, the recovery in November minus the Chinese is even more impressive.” That’s because the Chinese tend to be a very high-spending segment.

Despite surging cases of the Omicron variant affecting travel and main street shopping across Europe, several Middle East airports have continued to be a lifeline as connection hubs for global travelers going home for the Christmas holidays.

Dubai Airports which runs Dubai International is still expecting a holiday rush and expects to hit 28.9 million passengers by the year. That is 2.1 million more than the forecast it made in September. CEO of Dubai Airports, Paul Griffiths, said: “Our rate of recovery has exceeded most other airports of comparable size. The number of visitors to Dubai is also likely to exceed pre-pandemic levels during the final few weeks of the year which is an excellent milestone on our journey towards full recovery.”

Dubai Duty Free is reaping the rewards of both the airport and its owner, the United Arab Emirates government, trying to keep connecting routes operational where possible while also marketing Dubai as a safe place to vacation.

The retailer’s 38th anniversary sale saw four product categories generate sales of more than $2 million over the three days: perfumes ($6.3 million), wines and spirits ($3 million), watches ($2.7 million), and ticket sales for Dubai Duty Free prize draws ($2.4 million). Colm McLoughlin, executive vice chairman and CEO of Dubai Duty Free, said: “We are very happy to see such a great result, both in store and online. Our staff did a great job.”

Over the three days of the promotion there were roughly 166,000 transactions recorded while online sales in the period topped $2.4 million with more than 7,000 orders via click-and-collect and home delivery services, and tickets for prize draws purchased online.

Dubai Duty Free’s anniversary promotion was first launched in 2003 when the company marked its 20th anniversary and it has continued to be a driver ever since, helping to boost sales during the traditionally busy Christmas travel period.

Commenting on the full reopening, this week, of Dubai International, Griffiths said: “Reaching the point where 100% of our facilities are now serving customers, plus the huge resurgence in passengers marks an important milestone for the aviation sector as well as for the city of Dubai and its economic growth.”

Next year, Dubai Duty Free is targeting $1.4 billion in sales, even though Cidambi says he is not expecting any significant business from China in the first half of 2022. “I think other major regions like the Middle East, Europe including the U.K. and Indian sub-continent will continue to do well in the first quarter,” he said.

“We are expanding our luxury offer with the opening of new boutiques and expect to see continued strength in that category. Dior opened in Concourse B at the end of September, and will be followed soon by Louis Vuitton and Cartier,” he added.

The Tycoon Herald