Airports are busier than ever, but their shops are not keeping pace. For a jewellery, beauty, fragrance or accessories brand offered a place on the shelf, the question is whether a particular airport, partner and product will earn enough to justify the investment. The answer differs sharply between the United States, Europe, the Gulf and Asia.
Between 2023 and 2025, global airport passenger traffic grew by an average of 6.2% a year, while travel-retail sales grew by 2.7%, according to Oliver Wyman. More people are walking past the shops; each of them is spending less. The airports and the companies that run their shops are still growing, because there are more passengers to serve. A brand that supplies one of those shops does not grow with the crowd. It grows only when its own products sell and are reordered.
That is the decision this article is meant to help with. A shop inside an international terminal can introduce a fragrance or a bracelet to customers a brand would struggle to reach any other way. The same shop can tie up stock, require expensive launch support and produce a single opening order followed by silence. Which of the two it becomes depends on where the shop is, who walks past it, what the brand has agreed to fund, and whether anyone will tell the brand what actually sold.
Different markets, different retail businesses
Travel retail is several businesses under one name. In the United States, "duty-free" shops may sell tax-free goods only to passengers leaving the country, so the far larger domestic flow uses ordinary airport shops and restaurants. The effect shows in the industry's own survey. Airports Council International's North American arm, drawing on 79 US and Canadian airports covering about three-quarters of 2024 traffic, found that the median airport took $4.39 in retail sales for every departing passenger, and more than that in food and drink. Duty-free was 18% of those airports' retail sales; half of them had no duty-free shop at all.
These are airport-wide medians, not what any shopper spends, and they say nothing about a particular terminal. That is the point. For a European brand, the United States contains two quite different opportunities. A regional airport serving domestic routes is a convenience and gifting market in which a premium accessory can sell on recognition, but a duty-free beauty programme cannot exist.
An international gateway is different: at New York JFK, a $125 million redevelopment of Terminal 8 includes an 11-year duty-free contract for Avolta and a beauty hall planned around Dior, Lancôme, Estée Lauder, La Mer and Charlotte Tilbury, with boutiques for TAG Heuer and Breitling. Those are announced store plans, not proof that the stores sell, but they show the format a long-haul terminal can sustain.
Europe is where duty-free remains the core of the business, and where the shopper has held up best. Against Oliver Wyman's benchmark of what travellers spent per head in 2019, Europe sold $3.1 billion more in 2025 than its traffic implied, while Asia-Pacific sold $7.6 billion less as Chinese travellers moved their luxury shopping home and to Hainan. The world as a whole came in about $5 billion below that benchmark; the figure is a modelled comparison with 2019 spending rates, not a loss in any company's accounts.
Even in Europe the trend per head is soft: Paris's airports reported €31.7 of Extime sales per passenger in 2025, down 1.2%, a figure that includes restaurants and services and cannot be compared with the American retail-only median.
The Gulf hubs are where departing international travellers arrive intending to shop. Dubai Duty Free, operating across Dubai's two airports, made 18.45% of its 2025 sales in perfume and 10.33% in gold, and nine-tenths of its sales on departure. That is one operator's category mix rather than a rule for every Gulf terminal, and it describes a shopper with intent and money who is rare in a domestic pier anywhere. In each region, then, the questions a brand should ask are the same: what share of this terminal's passengers are departing internationally, from which countries, and does the operator sell duty-free, duty-paid or both?
Which products and buying occasions fit
Fragrance and beauty are the natural fit for airport retail, because the buying occasion suits them. A product can be tried at the counter, carried on board and given as a gift, and a travel size or discovery set gives the shopper a reason to buy now without undercutting the brand's price at home.
An ACI study of 36 airports in Asia-Pacific and the Middle East found about 70% of purchases were impulse-led and that product choice motivated more of them than price. It is a regional finding, but it describes the moment a fragrance brand is designing for, and it means recognition, sampling and trained staff matter more than the discount.
Jewellery and watches work under narrower conditions. Dubai's gold share illustrates them: a traveller who arrives intending to buy, knows what the piece should cost, trusts the seller and has time for advice. Where a terminal and its operator can supply those conditions, a considered purchase succeeds in an airport. Where they cannot, a fine-jewellery counter spends more on display and security than it earns.
Cruise ships are often proposed instead, and the cruise retailer Harding+ describes "a week with the customer rather than an hour in an airport departure lounge". That is an operator's observation, not conversion data; the guest profile changes with the itinerary, and a brand must still staff and stock a counter at sea. The ship is another buying occasion, to be assessed on the same terms as a terminal.
Accessories sit between the two. Small leather goods, scarves and sunglasses are portable and giftable, and they sell on recognition. A brand the traveller already knows can do well in a domestic terminal; one they have never heard of is competing on price in the time it takes to reach the gate.
Who pays for the shelf
The chain has three links, and the money sits in different places along it. The airport grants a concession, the contract that allows a retailer to run a shop in the terminal, and charges rent for it: Heathrow publishes its terms as the greater of a percentage of turnover or a guaranteed minimum, and the North American survey puts the median retail rent at 16.5% of sales. Those are the retailer's costs, paid to the landlord. A brand selling to the retailer at wholesale does not pay them, and should not accept them as a reason for its own terms.
What the brand does pay is the package it negotiates with the retailer or its distributor: the wholesale price and any rebates, the testers and fixtures, the promotions and promoter days it funds, the credit period before it is paid, and the fate of unsold stock. Each is negotiable before the first order and expensive to reopen afterwards. In this route the retailer sets the shelf price; a wholesale supplier cannot normally dictate it, though a brand that runs its own concession, as some larger houses do, controls price and presentation and carries the rent and staff instead.
One example, worked through
Here is a simple illustration of how the arithmetic behaves. Every figure is chosen for clarity, and none is an industry benchmark. A brand commits £12,000 to fixtures, testers and launch activity across four shops. Each unit sold contributes £12 after the product's cost and the agreed deductions, before that one-off spend. To recover the £12,000, 1,000 units must sell. If each shop sells ten units a week, 40 in all, that takes 25 weeks.
| Scenario (illustrative) | Units to recover £12,000 | Weeks, rounded up |
|---|---|---|
| Base case: £12 a unit, 10 units a week per shop | 1,000 | 25 |
| Brand funds a £3-a-unit promotion, so £9 a unit | 1,334 | 34 |
| Sales run at 6 units a week per shop, at £12 | 1,000 | 42 |
| Both at once | 1,334 | 56 |
Two cautions. This is a sell-through recovery model, showing how many products travellers must buy before the launch has paid for itself; it is not a cash-flow forecast, and it does not describe any operator's contract. A brand that invoices on delivery is paid according to its payment terms and the retailer's credit, whatever travellers have bought. What sell-through, meaning the products consumers actually buy as opposed to the stock the retailer orders, does tell the brand is whether the listing will generate reorders or leave it holding returns and rebate claims at the end of the season.
What a brand needs before it says yes
Four conditions decide whether a listing is worth taking. The shopper must match the product: the terminal's share of departing international passengers, their nationalities and the time they have before the gate should fit who buys the brand at home. The proposition must be credible in that setting: a product the staff can demonstrate, a travel format where it helps, and recognition or a story that an adviser can convey in a sentence.
The terms must be survivable: brand-funded costs that are capped and approved in advance, stock risk and payment terms the balance sheet can carry, and a pilot small enough that failure costs a budget rather than the year. And the brand must be able to see what sold, by shop and by product, at an agreed cadence, because without that the opening order is the only fact it will ever have.
A brand may still enter with a lower expected return if the listing is doing marketing work, as a reference account that opens other doors or as visibility to a nationality it is courting. That is a reasonable decision when it is budgeted as marketing, with a named objective and a review date; it is an expensive habit when it is not.
The pilot's purpose is to produce a decision, which is why operators' rotating formats such as ARI's Hot Shop at Larnaca, opened in May 2026 for emerging fragrance and beauty brands, are useful: the operator says openly that it controls the pace and changes brands in and out, so the brand should write down beforehand what result at the review date means expand, renegotiate or stop.
The COSTABILE perspective
Travel retail can accelerate a brand's international reach faster than any other channel we know, and it deserves investment where demand, economics and an operating partner align. Our judgement is that those alignments are specific, and that most proposals a brand receives are built on the terminal's traffic rather than on any of them.
For a beauty or fragrance business we would prioritise the main departure flow of a terminal whose international passengers match the brand's customer, with a trained adviser at the counter and a travel size that protects the home price. In the United States that means a qualified international gateway such as a long-haul terminal at JFK rather than a domestic hub.
For a jewellery or accessories business we would start where the shopper arrives intending to buy and has time to be advised: a Gulf hub, a specialist boutique in a transit terminal, or, for a recognised accessories name, a domestic American terminal where the product sells on sight. A cruise programme deserves its own examination for watches and fine jewellery, on the same evidence a terminal would be asked for, and should not be assumed superior because the customer stays longer.
We would negotiate three things before any first order: sell-out data by shop and product at an agreed cadence, a cap on brand-funded promotions with each one approved and measured, and a written position on unsold stock and payment. We would refuse multi-airport exclusivity before a single shop has reordered, and any proposal whose case is the passenger count. And we would size the first pilot so that its review date arrives before the second decision is due, because the second shop should be chosen with the first shop's numbers.
The brands that do well in this channel are rarely the ones with the most airports. They are the ones that can say, shop by shop, which listings are making them money, and have the discipline to close the ones that are not.
Selected references
- Oliver Wyman — Boosting travel retail: the airport opportunity, September 2026, and press release, 30 September 2026
- Airports Council International – North America — 2025 Concessions Benchmarking Survey, CY2024 data, June 2025
- Avolta — JFK Terminal 8 duty-free contract, 29 October 2025; The Moodie Davitt Report — brand line-up for Terminal 8, October 2025
- Groupe ADP — 2025 full-year results, 18 February 2026
- Government of Dubai Media Office — Dubai Duty Free 2025 annual sales, 1 January 2026
- Airports Council International Asia-Pacific & Middle East — Travel Retail Study in the Post-Pandemic Era, 5 February 2026
- Harding+ — Category Focus: Watches, 27 April 2026
- Heathrow Airport — Commercial concessions
- ARI — Hot Shop at Cyprus Duty Free, 9 June 2026
This Perspective uses publicly reported information available as of 2 November 2026. Company figures, survey medians and announced store plans are attributed to their sources and have not been independently audited; the worked example is illustrative arithmetic, not an industry benchmark. Contract terms vary by airport, operator and market and should be verified for each proposed agreement.
COSTABILE
International commercial growth. From opportunity to agreement.