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1 Issue 396 The Week in Travel Retail Days FRIDAY SATURDAY SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY 2 JUNE 2011 WELCOME to The Moodie Report 7 Days.This was a momentous week for Swiss travel retail, writes Dermot Davitt, with the opening of the first Arrivals duty free stores in the country, at Geneva and Zürich airports. It s been a long, hard road a 12-year campaign in total for champions of the Arrivals concept among the key airport authorities, as well as leading retailers such as The Nuance Group, which as a concessionaire stands to benefit most from the legislation. The company will extend its Swiss airports space by 2,000sq m, beginning with the initial store openings on Wednesday this week. And if estimates from the Swiss Federal Council are even close to correct the government body predicts additional sales nationally of CHF60 80 million (US$70 95 million) a year then Arrivals duty free will be a game-changing factor for the retailer s European business. After Gibraltar, Iceland, Norway, Serbia and Turkey, Switzerland is only the sixth state in Europe to allow Arrivals duty free. That s a huge competitive advantage, and will put pressure on the range, offer, pricing and service at Departures duty free stores in other countries that serve Switzerland-bound passengers. Big news too from neighbouring Germany, where FrankfurtAirport unveiled its speciality concessionaires for the new Pier A-Plus, opening in mid It s a rich and diverse list. On the one hand it reflects Frankfurt s status as an international hub, with an emphasis on luxury as names such as Hermès, Montblanc, UK brand Mulberry, and Caviar House & Prunier in food & beverage attest. On the other, there s a strong German feel. This shines through in the planned introduction of brands such as Wempe (jewellery) and Engelhorn (fashion). And it s on show in what promises to be a high-class regional F&B offer, typified by names such as Bistro Hausmann, the Frankfurt Wirtshaus offering German specialities, or the Marktwirt unit operated by Kuffler & Bucher, the concessionaire that was one of the big winners of The Moodie Report s Airport Food & Beverage awards earlier this year. The other talking point of the week is Aer Rianta International s exit from two of its three Moscow operations, Domodedovo and Vnukovo airports, writes Martin Moodie. Given that the company also now has just a third of the Sheremetyevo Terminal D business (through the Aerofirst joint venture), which it initially won on its own, it s clear that this is a watershed in ARI s proud 25-year history in Moscow. Image of the Week And what a fun image it is. More than 200 beauty advisers descended recently on Puig s home city of Barcelona to take part in the company s worldwide travel retail Beauty Advisor Convention. Here they take a quirky tour of the great city that gave the world Antonio Gaudi, José Carreras and of course that favourite adopted son Lionel Messi. FAST, FACTUAL, FREE QUOTES OF THE WEEK Today marks a historic occasion for The Nuance Group and its airport partners at Geneva and Zürich airports. The Nuance Group CEO Europe Andrea Belardini hails the opening this week (1 June) of Switzerland s first Arrivals duty free stores a landmark moment for travel retail in the country. Within the holding group we are looking at consolidating a number of businesses to create one strong leading travel retailer in the region, both duty free and duty paid. John Moriarty, longtime Aer Rianta International man in Moscow, unveils powerful new Russian travel retail group Duty Free Holding Group, of which he has just been named Vice President Operations. A major new industry force is born? Pure and simple our local partners made us an offer we thought attractive and we decided to accept it. It came down to a simple question of evaluating future prospects and opportunities against the price we were offered. ARI Director General Eamon Foley explains the Irish retailer s exit from its Domodedovo and Vnukovo airports, a significant downsizing of a once formidable Russian business. Page 1

2 STORY OF THE WEEK INTERNATIONAL. In order to develop better insights on the important human dimension of globalisation, MasterCard Worldwide has created the Index of Global Destination Cities. This annual research programme describes and analyses the global network of 132 destination cities and how they are connected through cross-border air travel and associated expenditures. Here we present a brief summary of the report to access the complete document visit Destination cities are ranked globally in terms of the number of their total international visitor arrivals and cross-border spending by these same visitors in the destination cities. Once the gross total number of passengers arriving in a destination city is established, this total is then adjusted by netting out (i) returning residents of the destination city after an overseas trip and (ii) transit passengers who had arrived in the destination city only to transfer to another flight for a second destination city (more significant for hub cities with airport capacity far exceeding the need of their local populations) and who are now returning via the same route. A more accurate estimate of visitor arrivals is then established after these steps. This adjusted number of visitor arrivals is then used to estimate cross-border expenditures by these visitors in the destination city. The global top 20 destination cities by visitor arrivals are presented in the chart below. European cities dominate with ten out of the 20, and Global top 20 city destinations by international visitors 2011 with London and Paris in first and second position, respectively. Cities in Asia Pacific come second, accounting for eight of the top 20. Bangkok occupies the third position, testifying to its attraction as a popular tourist destination. Dubai, in the Middle East, is ranked ninth. Only one city in North America is in the top 20, New York, which is ranked twelfth. However, when these top 20 destination cities are ranked in terms of their growth rates of visitor arrivals expected in 2011, a very different picture emerges. Barcelona is ranked first, and is expected to grow by an impressive +24.3% in visitor arrivals this year. Kuala Lumpur in Malaysia is ranked second, following very closely with a growth rate of +21.8%. Istanbul is in third place with a rate of +20.4%. Shanghai and Hong Kong follow in fourth and fifth ranks, with growth rates of +18.6% and +17.4%, respectively. New York, the only North American destination city in the top ten measured by growth rate, is expected to grow by +11.7%. Barcelona, in the top rank, is one of only two European cities among the top 10 in terms of growth rates, a complete reversal of the pattern seen in the top 20 ranking shown in the chart, which is dominated by destination cities in Europe (ten out of the top 20). Instead, from the perspective of growth, six of the top ten are in Asia, one in the Middle East and one in North America. This kind of growth pattern strongly suggests that destination cities in emerging markets in Asia will continue to grow in importance. Page 2

3 BUSINESS NEWS GERMANY. Frankfurt Airport s new Pier A-Plus, which opens next year, will house a broad array of local, national and international brand names, according to airport operator Fraport, which has revealed the names of key concessionaires at the new facility. Among the new concessionaires are Wempe and Engelhorn, two popular German retailers. Wempe, one of the world s top ten jewellers, will open its first store at an airport. Engelhorn, a family-run fashion department store based in Mannheim near Frankfurt, will be offering its range of fashion products. Leading UK brand Mulberry will be opening its first store in Germany at the new pier. Other international brands coming to Pier A-Plus with their own boutiques include Hermès, Montblanc and Porsche Design. Food & beverage concessionaires in the Schengen area of the pier will include Bistro Hausmann (with 222sq m of space), a retailer named COA offering Asian cuisine (241sq m), the Frankfurt Wirtshaus offering German specialities (245sq m), a 220sq m Italian-themed Mondo Blanco outlet and a Casualfood quick service unit (55sq m). The Schengen area (pictured) will also be home to a Meyer s delicatessen (108sq m), a wellness outlet under the Beauty Lounge name operated by Metropolitan Health & Beauty GmbH, and a Massimo Dutti fashion store (174sq m). There will also be a Tie Rack and a Christ jewellery outlet, a Gant store, a combined Tumi and Longchamp unit, a Thomas Sabo store, a Wolford store plus a Relay news & books outlet. Both Schengen and Non-Schengen zones will feature Photair Electronics and Germany & More stores. In the Non- Schengen area, traditional German food will be served at the 290sq m Marktwirt unit (operated by Kuffler & Bucher), and Lucullus Nero (SSP Germany, operating in 300sq m) will offer original Italian gourmet specialties. There will be a Reingold wine and cocktail bar (220sq m), a Caviar House & Prunier unit, a Temaki outlet and a McDonald s McCafe. Other outlets in the Non-Schengen area include a 130sq m Pocket Shop (books) operated by a subsidiary of Douglas Holding. For more on Pier A-Plus, and pictures, go to www. See also Food & Beverage News on page 5. RUSSIA. Aer Rianta International (ARI) has sold its retail interests in Moscow s Domodedovo and Vnukovo airports to its local partner, Duty Free Holding Group (DFHG), for an undisclosed sum. The retailer, a subsidiary of Dublin Airport Authority, will continue to supply DFHG, which retains the right to operate under the Runway Duty Free fascia. In a statement, ARI confirmed it has sold its 50% stake in Arial, the joint venture which runs retail at Domodedovo, and its 19.9% share of Rex Trading, which operates at Vnukovo. It has signed a supply contract and trade mark licensing agreement with DFHG. Experienced duty free executive and former ARI senior manager John Moriarty has been named Vice President Operations for DFHG. Moodie Interactive: Click for the advertiser s website Page 3

4 The exit from Domodedovo (a thriving business for several years despite intense on-airport competition) and Vnukovo represents a watershed in the history of ARI in Russia. The company pioneered international standard duty free retailing in the country in the late 1980s, a base from which it then extended into neighbouring countries. Conversely, DFHG now looms as a major force in Russian travel retail, not just in duty free but in duty paid operations across the country s burgeoning domestic airport sector. Moriarty told The Moodie Report: Within the holding group, we are looking at consolidating a number of businesses [under the DFHG banner] to create one strong leading travel retailer in the region, both duty free and duty paid. He added: We ve got the duty free business of Runway Duty Free at Domodedovo and Vnukovo; also in Domodedovo there s a domestic travel retail business which will come under the same [holding] roof. There are eight stores in the domestic terminal there. We will also have some domestic stores in the new terminal at Vnukovo when it opens. There are also a number of stores at Sheremetyevo Airport at Terminal E, both landside and airside, both duty paid and duty free. We also have expanded into the seaport in St Petersburg, both duty free and landside which handles cruises as well as ferries to Scandinavia. We also have a duty free and travel retail business in Novosibirsk and an airside domestic retail store in the [2014] Winter Olympics city of Sochi. ARI Director General Eamon Foley told The Moodie Report that the company, though exiting its interests in Domodedovo and Vnukovo airports, would retain its 33% stake in Aerofirst, the joint venture with Aeroflot which operates at Moscow Sheremetyevo Airport Terminals D and F. The Irish retailer also continues to operate at St Petersburg Pulkovo Airport as well as Kyiv Boryspil Airport. Asked why ARI had chosen to exit its other two Moscow operations, Foley replied: Pure and simple our local partners made us an offer we thought attractive and we decided to accept it we had a very good business for a number of years but it came down to a simple question of evaluating future prospects and opportunities against the price we were offered. SWITZERLAND. The Nuance Group this week unveiled the first Arrivals duty free shops in Switzerland, with the opening of new stores at Geneva and Zürich airports. The openings follow the recent change in Swiss legislation, allowing the country s international airports and airport retailers to extend the duty free shopping experience to arriving travellers. Today marks a historic occasion for The Nuance Group and its airport partners at Geneva and Zürich airports, said The Nuance Group CEO Europe Andrea Belardini. These openings signify the successful outcome of our combined efforts over the past 12 years to extend duty free shopping to travellers flying into and residents returning to Switzerland. In achieving this milestone, we are now able to respond to consumer demand for a more convenient shopping experience by offering a choice of retail opportunities at every step of their journey. Both of the new Arrivals duty free shops offer a wide selection of products across liquor, tobacco, perfume and cosmetics, featuring a selection of the company s new key category Boutique concepts, such as whisky, which were unveiled in Antalya last month. Products are also clearly segmented to help customers identify key hero categories, as well as best sellers, new items, special promotions and gifting ideas. Later this summer Nuance will develop its Arrivals offering further, introducing a collect on return service at both Geneva and Zürich airports whereby travellers can select products either upon departure at the airport or by ordering online beforehand, ready to pick up upon their arrival into Switzerland. With more than 35 million passengers estimated to come through both of these key international gateways this year, there is a clear opportunity to further grow our business in Switzerland through the range of initiatives we have planned in this market in 2011, said Belardini. Moodie Interactive: Click for the advertiser s website Page 4

5 FOOD & BEVERAGE & OTHER COMMERCIAL REVENUES GERMANY. SSP has secured a major contract to open three new units and retain an existing coffee house at Frankfurt Airport. Valued at over 7.2 million per annum, the contract will run for between five and eight years. The new outlets will open as part of the development of Frankfurt s new A- Plus Pier (see page 3), which is scheduled to welcome its first passengers in the summer of Italian restaurant Lucullus Nero (pictured) will make its airport debut, serving a modern interpretation of a traditional Italian menu. Dishes will include pizzas, as well as specially created recipes including goat s cheese with balsamic vinaigrette or ricotta, sausage and pistachio. It will also offer a range of typical pasta dishes, as well as Italian staples such as saltimbocca di vitello alla Romana. A highlight of the nightlife of Berlin according to SSP, the Reingold bar aims to evoke the glamour of the city during its 1920s heyday. With its gold décor and furnishings such as deep-buttoned leather Chesterfield sofas, it is designed to offer a contemporary twist on the style of burlesque. SSP will also open a second Temaki Bar sushi concept, building on the success of the current outlet which is part of the airport s Around the World food court at Terminal 1. Temaki Bar serves a range of hand-rolled sushi. The menu includes a selection of nigiri, maki, sashimi and California rolls, plus a range of temaki, all freshly prepared at the counter by Japanese sushi chefs. The successful Perfect Day coffee house will remain, and will be refurbished to re-open in This concept, winner of the Best Nonalcoholic Beverage Outlet title in The Moodie Report s Airport Food & Beverage Awards, has been a feature of the airport since It serves a range of own-grown coffees from India, together with an array of snacks and sandwiches to eat in or take away. SSP Germany Managing Director Cornelius Everke said: Frankfurt, as one of the top three airports in Europe, is clearly a high-profile location. We already have a substantial and commercially successful operation here, and we re extremely proud to be growing that business. Having worked with SSP for a number of years, we know that their German team can meet the high standards we expect for our customers, added Fraport Senior Food and Beverage Manager Mark Hallstein. Their new bars and restaurants have proven appeal to consumers in Frankfurt and will help us to achieve our objective of creating an airport of individual style and character. Moodie Interactive: Click for the advertiser s website Page 5

6 TENDER & CONTRACT NEWS QATAR. The New Doha International Airport (NDIA) Steering Committee has launched the latest development phase in its construction programme with the release of requests for contractor expressions of interest. The requested pre-qualifications are for 14,477sq m of terminal retail concessions and 8,700sq m of food & beverage concessions, plus fit-out enhancements and in-bond concessions storage. The state-of-the-art new airport is scheduled to open in 2012 and NDIA claims that the facility will set new standards in airport and airline efficiency, passenger convenience and service standards. The concessions development will be constructed in phases. It includes fitting out of five airside concourses, the main terminal building, the south node retail centre and the north node retail centre. The centrepiece of the retail concessions programme will be a walk-through duty free offer to be run by Qatar Duty Free. The majority of the retail outlets are positioned after security screening on the departures level. The retail offer will include a destination Kid s World Store, cigar and sunglasses kiosks, convenience stores, luxury fashion boutiques and branded retail shops. The food & beverage offer will include three multi-tenant food courts, two casual dining restaurants and several quick serve kiosks. Pre-qualification documents will be available for collection at NDIA Doha site offices from June 12 to June 23. GENERAL NEWS INTERNATIONAL. Airline ancillary revenues hit billion in 2010, almost double the 2008 figure, according to a new study just released. It reports that United, Continental, Delta, American and Qantas are the airline world s top ancillary revenue carriers for 2010, with their revenues buoyed in particular by baggage fees and co-branded credit cards. The Amadeus Review of Ancillary Revenue Results was undertaken by IdeaWorks, a leading airline ancillary revenues consultancy, and sponsored by Amadeus, a leading travel technology company in the global travel and tourism industry. The companies researched the financial filings made by airlines around the world to identify examples of ancillary revenue including unbundled and commission-based services such as hotel or car rental bookings, plus revenues from services such as cobranded credit cards, loyalty programme and onboard sales. In 2007 only 23 airlines worldwide disclosed ancillary revenue activity, with a modest result of 1.72 billion (US$2.45 billion). This year 47 carriers disclosed 2010 ancillary revenue activity of billion (US$21.46 billion). This represents ancillary revenue growth of +38% over 2009 and +96% since IdeaWorks said: Two trends are obvious from the review of the financial disclosures made by airlines for the 2010 Amadeus Review of Ancillary Revenue Results. First, airlines already engaged in ancillary revenue activities are bringing more products to market. This occurs through the introduction of new à la carte features and the inclusion of distribution methods beyond the carrier s website. Second, many of these airlines are becoming savvy retailers. Branding has been emphasised, pricing is more sophisticated, and an increasing number of features are presented during the booking process. For full details go to Page 6

7 RETAIL & COMMERCIAL SALES RESULTS CANADA. Airport duty free sales rose +17% year-on-year in April to C$17.3 million (US$17.48 million), according to the Frontier Duty Free Association (FDFA). Citing the Canadian Border Services Agency, FDFA said that land border duty free sales increased by +2% in April to C$9.7 million (US$9.97 million). Canadian duty free sales April 2011 vs April 2010 Airport sales Change Change Land border sales Change Change Product line April 2011 on year YTD April 2011 on year YTD Accessories (purses, wallets, sunglasses etc.) C$623, % +11.9% C$176, % +12.7% Alcohol (liquor, liqueur, wine, coolers) C$3,796, % +14.9% C$3,470, % 4.4% Beer (beer, malt based coolers) C$24, % +12.7% C$444, % 8.6% Clothing (including hats, fur, leather) C$529, % +2.5% C$142, % 22.4% Crafts/arts C$5, % 12.1% C$6, % 2.3% Electronics, cameras, binoculars etc. C$49, % +18.9% C$2, % 1.8% Food C$1,145, % +11.1% C$471, % +2.6% Glassware, crystal, china, figurines, porcelain C$16, % 30.6% C$48, % 10.3% Jewellery, watches, clocks C$999, % +27.3% C$357, % +25.2% Office and travel supplies C$558, % +27.5% C$38, % +7.3% Perfume, cosmetics, skincare C$5,479, % +14.4% C$1,457, % +5.0% Souvenirs (excluding clothing) C$298, % 48.6% C$82, % 26.1% Tobacco, cigars, loose tobacco C$3,846, % +8.6% C$3,039, % +3.7% Other C$26, % +7.3% Total C$17,371, % +11.2% C$9,764, % 0.0% Source: Canadian Border Services Agency For the first four months of 2011 airport sales gained +11.2% to C$71 million (US$73.0 million) and land border sales were flat at C$32.8 million (US$33.73 million). For a full breakdown of sales by region and by category go to GREECE. Folli Follie Group posted a +1% rise year-on-year gain in first quarter travel retail revenues to 39 million at its Hellenic Duty Free Shops operation. That was despite a near -9% fall in international passenger traffic at flagship location Athens International Airport to 1,688,751 in the three-month period. Group sales revenues at the retail-to-luxury group declined by -4.4% to million. Gross profit decreased by -8.6% to million. The relevant margin fell two points to 49%. The group described its results as a resilient performance in a continuing challenging environment. EBITDA fell sharply by -20% to 43.5 million with the respective margin settling at 20%, versus 23.7% last time. EBIT tumbled by -23% to 37.5 million. Folli Follie Group CEO George Koutsolioutsos commented: Our group succeeded to keep a solid performance under difficult market conditions in our local market, which represents 48% of our total revenues. We achieved an impressive top line performance on the back of high comparables and missing Eastern business. Jewellery, watches and accessories revenues fell by -1.2% to million Travel retail revenues increased by almost +1% to 39 million Department store revenues decreased by -7.5% to 33.7 million Retail/wholesale of footwear and apparel revenues decreased by -19.5% to 30.4 million Other sales increased by +141% to 1.6 million As reported, Folli Follie Group recently struck an agreement with Fosun International, a large China-based holding company, setting the ground for a strategic alliance between the two groups. Fosun Group is to acquire about 9.5% of the enlarged share capital of Folli Follie Group. Page 7

8 DATA ROOM PASSENGER TRAFFIC NEWS International air traffic development April 2011 & YTD 2011 Apr 2011 vs Apr 2010 YTD 2011 vs YTD 2010 Region RPK ASK Load RPK ASK Load growth growth factor growth growth factor Africa +1.2% +8.3% % +5.1% 64.1 Asia/Pacific +5.1% +7.9% % +7.0% 75.4 Europe +29.3% +27.1% % +13.6% 75.3 Latin America +25.9% +17.6% % +14.7% 77.4 Middle East +12.1% +12.2% % +10.8% 74.4 North America +11.9% +14.6% % +11.7% 76.2 Industry +16.5% +16.8% % +10.8% 75.0 Source: IATA INTERNATIONAL. International airline passenger traffic leapt by +16.5% yearon-year in April according to the International Air Transport Association (IATA). Though the growth figure was exaggerated by the comparison to April 2010 during which European airspace was closed due to the volcanic ash crisis, international markets in April had rebounded to +7% higher than the pre-recession peak of early The +16.5% increase in international passenger demand was matched by a +16.8% increase in capacity. Passenger load factors fell slightly from 76.8% in April 2010 to 76.7% in April this year. Combined international and domestic passenger traffic grew by +11.9%, slightly ahead of an +11.5% capacity expansion pushing the system-wide load factor to 77.4%. Demand improved significantly in April. Eliminating all distortions, we are growing at +3 to +4%. International traffic is now +7% above the early 2008 pre-recession levels, load factors are hovering around 77% and business confidence is high. Unfortunately two things are spoiling the party demand shocks and high jet fuel prices, said IATA Director General and CEO Giovanni Bisignani. Despite the enormous restructuring over the last decade, the industry is not shock-proof. Profits are being squeezed by the succession of crises and shocks that have marked the first four months of this year. Their impact on demand will continue to ease as we move into the second half. But maintaining the high load factors needed to support profitable growth will be difficult given the ongoing challenge of matching capacity to volatile demand, said Bisignani. African carriers saw a modest +1.2% growth in international markets compared to April This is significantly better than the -7.1% decrease recorded in March due to more stability returning to North Africa. The number of flights operated to/from Egypt and Tunisia is down by about a quarter compared to last year, but about half of February s -18% loss in traffic in these two markets has been recovered. Libyan airspace remains closed. Asia Pacific carriers saw +5.1% growth in international markets, reversing the -0.6% drop in March. Strength in Chinese and Indian markets helped offset the weakness in routes associated with Japan. Japan s international traffic is down -20%, knocking a full -1% off of total international travel. North American carriers are seeing much stronger demand in international markets (+11.9%) than in domestic, for which the US carriers reported +1.2% growth. European carriers reported a +29.3% spike, due mostly to the comparison to April 2010 which was severely affected by the volcanic ash crisis. Latin American carriers saw a +25.9% increase in international demand in April, higher than the +22.7% recorded in March. The region s airlines are continuing to benefit from the strong demand for commodities, and the dynamic growth of trade within the region and along trade lanes with Asia, said IATA. Middle East carriers reported a +12.1% increase in international markets, more than double the +5.3% recorded for March, indicating a return of confidence to the region s long-haul operations. While political unrest in Bahrain, Yemen and Syria continued through the month, the impact was small as the three markets combined account for only 6% of Middle East traffic. NEW ZEALAND. Auckland Airport has reported a +6.8% increase in total international passenger volumes for the month of April. Singapore traffic increased by +40.1%, with Jetstar Asia completing its first full month of service. And China Southern commenced services to Guangzhou, operating three return flights per week. Page 8

9 Traffic from Japan declined significantly (-44.5%) after the 11 March earthquake, but arrivals from the UK (+20.4%) and Germany (+24.1%) recovered strongly in April compared with last year when traffic was affected by Icelandic volcanic ash. Arrivals from Korea fell by -40.5%, while Chinese arrivals grew slightly at +1.6%. Domestic passenger figures for April were flat compared with April Air New Zealand Group and Jetstar grew passenger numbers while seat capacity decreased by -2.3%. International passengers at Cairns Airport have grown +22.9% for this financial year to date. International traffic growth was modest in April (+2.4%) with Cairns Japan routes depressed by the Japanese earthquake. UAE. Abu Dhabi International Airport posted a passenger traffic surge of +15% year-on-year in April, with the total hitting 996,000, Abu Dhabi Airports Company (ADAC) has reported. The +15% increase in passenger traffic this month gives Abu Dhabi International Airport a strong solid outlook for the year ahead, said Harib Ghannam Al Hameli, ADAC Vice President Operations at Abu Dhabi international Airport. We expect this growth momentum to be maintained during the summer period, which will see over 900 flights depart Abu Dhabi each week. During April the highest growth market for passenger traffic was London, with passenger volumes climbing by +33% year-on-year. The strong increase was due to the comparison with the ash cloud-affected month of April The other destinations that posted the highest growth in April were Jeddah, Manila, Bangkok and Doha. In the first four months of 2011 passenger traffic at Abu Dhabi hit 3.8 million, an increase of +11% on the same period last year. TRAVEL & TOURISM NEWS SOUTH KOREA. Japanese visitor arrivals to South Korea dropped by -7.9% year-on-year in April to 220,142, according to Korea Tourism Organization. Most of those (213,645) were group tourists, the sector considered the most vulnerable to a downturn following Japan s recent earthquake, tsunami and nuclear crisis. Arrivals to South Korea by purpose and nationality April 2011 Nationality Tour Business Official Others Total Change % of on 2010 total Japan 213,645 1, , , % 29.2% China 86,397 8, , , % 20.4% US 45, ,686 10,095 58, % 7.7% Thailand 30, ,464 36, % 4.8% Taiwan 31, , % 4.2% Philippines 9, ,790 31, % 4.2% Hong Kong 25, , % 3.4% Malaysia 13, ,715 14, % 2.0% Russia 5, ,802 13, % 1.8% Australia 10, ,931 13, % 1.8% Vietnam 4, ,729 11, % 1.5% Canada 8, ,545 10, % 1.5% Japanese visitors are critical to South Korea s tourism and travel retail channels, representing 29.2% of all visitors in April, the largest group by nationality. Source: Korea Tourism Organization For the first four months of 2011 Japanese arrivals fell by -8.0% to 906,116. March, the month of the disasters, saw a fall of -12.3%. The story was more positive for Chinese visitors the great new hope for Korea s travel retail industry. Some 153,875 Chinese came to South Korea in April, up +4.2% and representing a 20.4% share of total arrivals. For the first four months of the year Chinese arrivals rose by +12.9% to 588,082. The South Korean travel retail market was profiled in the latest issue of The Moodie Report Print Edition available online at US (HAWAII). Japanese visitor arrivals to Hawaii fell by -23.5% year-on-year in April to 63,667 following the 11 March earthquake and tsunami and subsequent nuclear crisis, according to Hawaii Tourism Authority. The sharp drop resulted in a -13.3% fall in total Japanese visitor spending to US$105.4 million, less than anticipated. Those who came during the month spent an average of US$272 per person per day, up from US$258 per person in April A stronger Yen, which boosted shopping and food and beverage spending, contributed to the increase in daily spending, the authority said. Page 9

10 Spending at DFS, Hawaii s leading travel retailer, is understood to have held up strongly through April and May, buoyed both by the strong Yen and a fast-rising Chinese clientele base. Japanese group tour visitors declined sharply in both March and April (March: -35.6% to 24,088 visitors; April: -48.7% to 14,610) compared to the same months last year. Total spending by Japanese visitors for the first four months of 2011 was US$603.7 million, an increase of +9.6% compared to the same period last year. Japanese arrivals declined -4.0% over the four months. However, average daily spending was higher at US$281 per person compared to US$255 per person in the first four months of Across all nationalities total visitor spending rose +20.2% year-on-year to US$920.7 million. Total arrivals grew +5.3% to 581,324. The average daily spending by all visitors in April 2011 was US$176, up from US$159 per person in April A comparison of that number with the average Japanese daily spend for April (US$272) underlines the importance of this nationality to Hawaii s tourism and travel retail sectors. PEOPLE NEWS, JOBS, EVENTS & NOTICES ASIA PACIFIC. L Oréal has announced some important leadership changes at L Oréal Luxury Products Division (LPD), Scental Travel Retail Asia Pacific. After two years as General Manager of Scental, Olivier Dubos is shortly to take on the responsibility of General Manager LPD Korea. Under Dubos leadership Scental led the expansion of the Kiehl s brand and grew Lancôme s market share, said the company. From 1 July Eva Yu will take over the responsibilities of Scental Managing Director. She joined L Oréal LPD Hong Kong in 2000 in a marketing role and grew the Biotherm, Kiehl s and Shu Uemura brands. For the past seven years Yu has been LPD General Manager. INTERNATIONAL. With the integration of its Cadbury acquisition drawing to an end, Kraft Foods World Travel Retail has announced that Cadbury International Travel Retail Acting General Manager Joanne Willey will not be joining the combined World Travel Retail organisation. Jo has been a member of the integration team, a fantastic support to the Cadbury International Travel Retail team during 2010 and her understanding of the Cadbury portfolio has been invaluable in planning the transition to the new combined business, said Kraft Foods World Travel Retail Managing Director Andreas Fehr. IRELAND. Danny Galvin, the hugely popular and respected General Manager of CTC-ARI Airports, was laid to rest in his native County Cork on Wednesday, after a funeral attended by family, friends and many Aer Rianta International (ARI) colleagues past and present. Danny was tragically killed in a car crash in Cyprus on Wednesday 25 May. His death prompted a flood of tributes, which continue to come in via The Moodie Forum at His family paid thanks to all those who had contributed their comments and memories to date, and plan to add their own tribute to the Forum in coming days. The funeral mass at St Columba s Church, Douglas, Cork, celebrated Danny s life, with tributes coming from his brother Richard, and long-time ARI colleague John Kilmartin. Richard noted how the first 22 years of Danny s life were devoted to life at home, to playing Gaelic football and to his beloved club Nemo Rangers. The next 22 years, added Richard, when Danny travelled and lived abroad, were dedicated to the globalisation of the Galvin name. Richard noted how Danny was a natural leader, and how the family took pride in the many tributes from colleagues his second family. He added: He was also of course a loving husband, a devoted son and a caring father. Danny really made a difference, and we will miss him. John Kilmartin recalled meeting Danny in Moscow in 1994, and the beginning of a great friendship, saying he enriched all our lives, as mentor, guide and friend. He added: Let s remember and celebrate that life. Thank you for your readership and support of The Moodie Report. Martin Moodie, Founder and Chairman Page 10