Drop-in Travel Causes Crisis for Airport Stores
The sharp drop in air travel during the pandemic has battered airport stores and restaurants. Last year, global revenue for airports contracted by more than half.
For years, airport stores have enjoyed a unique position in the challenging brick-and-mortar retail industry. Travelers in airports often have time to wander through stores and are willing to buy souvenirs, snacks, and other items at high prices. But as many stores were able to shift their operations online, many airport retailers were left in a difficult situation.
Related: Q1 review: Three months down
Sinking Revenue Around the World
It is estimated that US airport shops and restaurants will lose $3.4 billion between July 2020 and December 2021. One of the world’s largest airport retailers, Dubai Duty Free, shared that its 2020 revenue tumbled 65% to $67 million after earning a record $2 billion the year prior.
Now, these airport businesses are beginning to see glimmers of hope. Though passenger volumes in airports are still low, they recently hit the highest levels seen in a year. Airport shops and restaurants will also be receiving $800 million in assistance as part of the $1.9 trillion COVID-19 stimulus bill.
An important name in the airport retail industry is Dufry. The Swiss company operates over 2,300 duty free stores in airports and other locations around the world. It also owns the ubiquitous Hudson News airport stores.
During 2020, the company’s revenue from its airport stores sank 72%. But Dufry’s leadership believes that passenger volumes will increase in the coming months as more people receive COVID-19 vaccinations, and that airport retail will continue to recover.
- US customers can now purchase Teslas with bitcoin
- KFC, Pizza Hut and Taco Bell Roll Out Text Message Ordering
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
Featured Image Credit: Poike.AlertMe