A Master Concession In Saudi Arabia Is A Timely Win For French Travel Retailer Lagardere

Lagardère Journey Retail has received a grasp concession contract at Saudi Arabia’s fourth busiest airport and can take management of it on the finish of the 12 months, making the French international duty-free retailer the one one to have operations in any respect 4 of the nation’s worldwide air gateways.

Incumbent retailer ATÜ Responsibility Free—a three way partnership between Turkey’s Unifree (managed by Germany’s Heinemann) and international airport operator TAV Airports—has held a contract there since 2015, working 5 retailers masking 13,200 sq. toes.

The win at Prince Mohammed Bin Abdul Aziz Worldwide Airport in Medina, a significant pilgrimage vacation spot, is a crucial step in Lagardère’s efforts to consolidate its retail enterprise within the Kingdom of Saudi Arabia. Air visitors development is anticipated to be fast as a result of authorities’s deal with worldwide tourism, only one a part of its bold Imaginative and prescient 2030 venture which is creating new high-end tourism resorts costing billions of {dollars}.

Lagardère Journey Retail, a part of the media large Lagardère Group, has witnessed a robust retail rebound to this point this 12 months. It additionally noticed promising development from the oil state’s airports the place it’s current (Riyadh, Jeddah and Dammam), final 12 months. In 2021, retail income from the Center East surged by nearly 40% year-on-year (down 15.5% on 2019), due to robust performances in Dubai (up 24%) and Saudi Arabia (up 48%) on account of a quick restoration in air visitors.

Shifting in date: December 2022

At Medina’s worldwide airport, which is within the west of the nation about 138 miles from the Crimson Sea, Lagardère will take cost of 14 new duty-free and retail areas this December masking a complete industrial space of 20,450 sq. toes of which 6,600 sq. toes will likely be allotted to duty-free shops.

Lagardère declined to disclose the size of the contract at Medina or which manufacturers is likely to be current from December, however a spokesperson informed me: “To start out with, the shops will likely be Aelia Responsibility Free and Relay branded shops, however over the long term, with redevelopments, we could also be growing new ideas and bringing in additional manufacturers.” Underneath the Aelia fascia, typical duty-free classes like perfumes, cosmetics, journey equipment, confectionery and souvenirs will likely be initially provided.

In a press release, Vincent Romet, the chief working officer of Lagardère Journey Retail’s enterprise within the Center East and Saudi Arabia, stated: “Our native groups are all fingers on deck to start out the brand new operations earlier than the 12 months ends. Saudi Arabia is an especially dynamic market and we’re very excited to open this new chapter.”

As Saudi Arabia weans itself off oil and diversifies—non-oil income elevated by nearly 122% between 2015 and 2020—tourism will develop into a brand new pillar for revenue and funding. Final week, Hungary’s low-cost provider WizzAir—at present the seventh greatest airline in Europe—signed off on 20 new routes to the dominion, one of many greatest route bulletins this 12 months.

Whereas the inaugural flights from Europe don’t embody Medina, they are going to go to airports in Riyadh, Jeddah, and Dammam the place Lagardère Journey Retail is current, with one-way fares beginning at a low $55. The transfer is anticipated to carry over a million extra vacationers to Saudi Arabia subsequent 12 months.

Wizz Air’s CEO Jozsef Varadi has described Saudi Arabia as “a long-term strategic market” for the airline which can little doubt ship a message to all worldwide journey retailers seeking to develop within the area.