In Markets

Sydney retail grows by +12.2% with more new shops to come

Sydney Travel Retail growth Airport - Retail in Asia

Sydney Airport generated retail revenue of A$295.6m ($227.1m) in calendar year 2016, representing a 12.2% growth on 2015 (A$263.5m/$202.4m) and a revenue contribution of 22%.

The airport introduced 12 first to Australia brands and 33 first to Australian airport brands in 2016, alongside 68 store transformations, having leased 236 retail outlets in total, with 94% of retail revenues coming from minimum guaranteed rental agreements last year.

STRONG NUMBERS

This was underpinned by 14.9m (+8.9%) international passengers and 26.9m (+3.8%) on domestic routes in 2016, as the publicly-quoted company reported total revenue of A$1,364.6m ($1,048.2m) and EBITDA of A$1,085.7m ($833.8m) representing +8.2%.

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As reported, Sydney Airport has transformed its retail offering in recent years, pointing to major improvements around 68 stores in 2016 which are aimed at providing ‘a more tailored mix f retail offers for passengers and visitors.
Airport management said: “At T1 International, our City View premium dining precinct opened in September. Sydney Airport welcomed The Bistro by Wolfgang Puck, alongside Australia’s first flagship Heineken House as part of the precinct. These premium dining options are reshaping the passengers’ airport dining experience.

GUCCI SET TO OPEN IN Q1 THIS YEAR

“A dedicated fashion precinct was also launched at T1, introducing a range of luxury brands, including Tiffany & Co. and Burberry – with Gucci to open in the first quarter of 2017. The fashion precinct has redefined the product offering to increase passenger spend.

“Our retail marketing focus extended beyond the airport this year, with strong pre-engagement with the passenger on our new retail offering. Our marketing strategy is helping visitors to better plan their time at the airport to maximise dwell time in the retail precinct.”

The airport said it established a stronger marketing presence in China and in 2016 it became the only Australian airport to establish a dedicated website hosted in Shanghai to outline key facts and useful information about Sydney Airport.

SYDNEY SKYTRAX 2016 WINNER

Meanwhile, the airport was only recently voted one of the world’s top four by passengers in the prestigious 30m to 40m passenger category in 2016 by Skytrax – and amongst the top three in the Australia/Pacific region.

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“We saw our strongest international passenger growth in 12 years, with an additional two million international seats entering the Sydney market. This was driven by high load factors, increased seat capacity as airlines introduced bigger aircraft, and new routes from existing and new carriers.Jointly commenting on the calendar year performance, Chairman Trevor Gerber and Managing Director and CEO Kerrie Mather said: “Total passenger numbers continued to grow from the previous year’s record numbers, with 41.9m passing through our terminals in 2016.

SIX MORE ROUTES TO CHINESE CITIES

“We continued to build a diverse passenger base, seeing double-digit passenger growth across many of our major markets, including China, the United States, India, Korea, Japan and Indonesia.

“South East Asia represented the region with the highest number of international passengers, with five million passengers during the year. With no one nationality representing more than 8% of our inbound passenger numbers, our growth across many markets is providing resilience for the future.

“By January 2017, Sydney Airport had seven airlines flying to 14 mainland Chinese cities, confirming our position as a world leader for long-haul Chinese routes. The growth of this market saw 1.3m passengers travel to and from China during the year.”

(Source: TR Business)

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