Last month, Hyun Jung boarded a flight from Incheon Airport in South Korea. About two hours later, he returned to the same airport and loaded up for duty-free shopping, despite not landing in another country.
Hosted by Lot Duty Free for VIP customers, Air Bushan Co was Hyun’s first since the onset of the epidemic and cost him less than one percent. The route briefly left Korean airspace and crossed an island in Japan, so 130 passengers in Silent qualified to shop at the duty-free store, usually reserved for those who have traveled internationally.
Destination-less flights like these are an effort by duty-free operators to rescue the industry destroyed by the Covid-19. Businesses were booming before the virus – the global duty-free market value was set to reach $ 85 billion in 2019 and $ 139 billion by 2027, according to verified market research
Sales have plummeted as countries have restricted international travel. According to the International Civil Aviation Organization, worldwide, only 1.7 billion people took scheduled flights last year, compared to 4.4 billion in 2014. The annual revenue of Swiss duty-free giant Dufry AG, operating outlets worldwide, fell by 711%.
Buyers on flights like Hyun’s will not fill the financial void, but they do at least some necessary business work.
“I’ve seen a lot of people with bags on duty-free items,” said Hyun, who bought Chanel bags, shoes and cosmetics. “I’m telling all my friends that it’s okay to fly because of the duty-free shopping opportunity.”
Hotel Shila, South Korea’s second-largest duty-free operator after Lot, is offering 114 seats on two so-called flights somewhere between May 23 and 30. Lot is offering five more flights this month for customers who have spent more than 550 in stores since May 3
Cleaning operators and other stores are among South Korea’s latest countries to recover from the epidemic, with the country’s retailers and wholesalers risking 182,000 jobs in April, even adding 6552,000 jobs to the economy compared to a year earlier, the statistics office said Wednesday.
The industry has declined very little where domestic aviation has increased again and there are tax-free shopping zones. Hainan, a palm-fringed island in China, has become a popular destination for mainland tourists on international trips. According to the Ministry of Commerce, this has helped the province’s duty-free sales, which more than doubled last year to 2.5.5 billion yuan (৩ 4.3 billion).
Since 2011, Hainan has allowed duty-free shopping for domestic tourists. In July, the government raised spending limits to allow people to shop more, and it is raising some duty-free shopping in Beijing, Shanghai and other cities. Purchasing power China is stuck.
To meet Hainan’s demand, Alibaba Group Holding Limited’s logistics unit is launching daily cargo flights from Singapore to supply cosmetics, handbags and other products to the island. Laox Co., Japan’s top duty-free retailer, which was acquired by Chinese retailer Suning Holdings Group Co. in 2009, plans to enter Hainan by the second half of this year by setting up similarly designed stores in its Japanese outlets. .
“The tendency to go to Hainan for luxury shopping is here to stay with the Chinese,” said Jonathan Sibney, chief executive officer of data-intelligence firm Luxurensite.
International air travel, if it happens at all, tends to be shorter, with regional routes and where vaccination activities are at a better stage, according to Cerium, an aviation analyst. Seven of the world’s busiest international routes in the first four months of the year are Cancun in the United States. -Houston and New York-Santo Domingo were included.
The share price advises investors to be enthusiastic. Dufry’s stock has risen more than 100% since the end of September, and Hotel Shila Seoul is nearing its 15-month high.
Paris-based Lagarde Travel Travel Retail, which operates duty-free stores, restaurants and other outlets at airports, is counting on customers near their homes to boost its revenue in Europe’s precarious summer, reducing revenue by 3 per cent to 1 million euros in the first three months. 414 million).
“We are betting more on the travels of retired Europeans,” said Frederick Chevalier, the agency’s chief operating officer for Europe, the Middle East and Africa. McKinsey predicts that passenger flows between Asia and Europe will only return to 2019 levels outside of 2024, ”said Anita Balchandani, a partner at the firm.
Bloomberg’s virus tracker shows that vaccination rates in places like South Korea have slowed down – Bloomberg’s virus tracker shows – retailers can rely on fake flights like a flight somewhere for a while.
“Somewhere the contribution from flights is less but it’s better than having nothing,” said Sung Junwan, an analyst at Seoul Sinhan Investment Corporation. “Every little bit counts.”
Authorities are also considering plans to allow overseas flights to Incheon, where passengers can spend a few hours shopping without leaving the airport before returning to their original destination.
Park Xu-Hyun, a 31-year-old office worker in Seoul, paid about 90,000 won ($ 80) for a flight-to-somewhere ticket in March. This was the first time the plane had traveled to the Philippines before the epidemic and it was quite valuable for shopping, Park said, who spent nearly cosmet 600 on cosmetics, mostly cosmetics.
“It felt good to be back at the airport,” he said.