Dubai Duty Free (DDF) is expected to make a full rebound in sales next year, as airport passenger traffic continues to climb on the back of recovery in travel demand, the company’s CEO and executive vice chairman Colm McLoughlin told Zawya.
The Middle East’s largest travel retailer saw its sales rise by 78% to AED 6.339 billion ($1.73 billion) in 2022 compared to 2021, but it was still around $270million short of the $2 billion record sales achieved in 2019.
Year-to-date sales, from 1 January to 26 February 2023, have so far reached $342 million, an increase of 59.49% over the previous year and 4% compared to pre-pandemic year (2019).
“Overall, the recovery is doing well, and based on the indication and forecast for the traffic growth at the airport, we expect a full rebound by 2024,” McLoughlin said.
Dubai International (DXB) recorded a 127% rise in annual passenger traffic to 66.1 million in 2022, exceeding its own forecast. This year, the world’s busiest airport expects to log 78 million travellers.
The growth in airport traffic will be driven by major events, including the COP28 climate conference and continued recovery in travel demand.
The COVID-19 pandemic has had a catastrophic impact on the travel sector, with airlines alone losing nearly $220 billion in revenues since the onset of COVID-19. As air traffic plummeted at the height of the health outbreak, travel retailers saw their turnover fall dramatically and they were forced to trim down their workforce.
Hiring plans, new strategies
With passenger traffic rising again, DDF has expanded its payroll to nearly 5,000 employees, which include 600 rehires and 500 new recruits since 2022.
Since September 2021, DDF has brought back a total of more than 2,000 employees.
“It feels good to see them all back and to welcome the new addition to the company. The recruitment at Dubai Duty Free will continue in line with the growth in our business,” McLoughlin said.
He said the main focus now is to stay ahead of the curve by engaging with passengers more effectively.
“These include working with brands through strong activations and travel exclusives and striving for improvements in sustainability and better digital marketing,” McLoughlin said.
“The operation will continue to improve its customer service in order to increase penetration and passenger spending.”
The airport retailer will also be implementing development projects, which include renovating a couple of shops in Concourse B West, including the liquor and tobacco sections, at Dubai International.
“We are also looking at refurbishing and renovating the second arrivals shop in Terminal 3, while we are keen to renovate the arrivals shop in Terminal 1,” McLoughlin said.
While keeping up the momentum in duty-free sales is a key priority, the company has also rolled out a series of initiatives to help combat climate change in its operations and support the UAE government’s net-zero agenda.
“We have launched an ecosystem restoration journey called ‘Plant a Tree, Plant a Legacy,’ which calls on the organisation to plant 10,000 trees in 10 years,” McLoughlin said.
“This project is expected to help sequester carbon and help decrease carbon dioxide (CO2) levels and other greenhouse gases in the atmosphere. Planting more trees efficiently will also support the goal of preserving forest, desert and mountain ecosystems.”
To cut down on emissions, DDF has adopted a carpooling system, which 55% of its employees take advantage of and helps reduce the use of individual vehicles.
DDF’s delivery vehicles and trucks also undergo regular maintenance to ensure efficiency and lower emissions.
“We also place importance on the reduction of energy consumption. Practices include turning off computers and lighting systems after office hours, maintaining proper thermostats on the A/C units, reducing the number of chillers used during the winter from six to two and purchasing only energy-efficient appliances and equipment.”
(Reporting by Cleofe Maceda; editing by Seban Scaria)