How are airports capitalising on the growth of the luxury retail market?

Louis Vuitton’s Le Café by Cyril Lignac at Heathrow Airport seeks to offer an “immersive experience” blending luxury, art de vivre and hospitality. Credit: LVMH 

As the aviation industry continues to celebrate strong post-covid growth in passenger numbers, it is no surprise that airport retailers would be seeing similar rises in their revenues, with the travel retail market valued at $66.3bn in 2023 and projected to soar to $145.6bn by 2032, according to Fortune Business Insight. 

The luxury retail sector in particular is seeing significant success in the airport industry, with high-end brands capitalising on their long-standing relationship with air travellers and a wider interest in luxury goods. 

This growth appears set to continue over the next decade as well with GlobalData forecasting the global luxury retail market to grow at a CAGR of more than 6% between 2023 and 2028, and numerous airports explicitly focussing on expanding their luxury retail offerings.

One such airport, Amsterdam’s Schiphol Airport, announced last year that the upgrade of its Lounge 2 terminal would include the arrival of new luxury brands to the airport, as it sought to bring its retail space in line with other global hubs and meet passenger demands. 

“When you look at the airports around us, the availability of luxury retail is significantly larger than at Schiphol,” an airport spokesperson tells Airport Industry Review. 

“In conversations with store staff on the sales floor, they repeatedly shared that they often got questions where the stores of other luxury brands where, which were not present yet at Schiphol. Combined with an extensive analysis of the efficiency of our retail space, this helped us to confirm luxury retail has significant growth potential.”

The investment into luxury brands saw two industry giants open new outlets at Lounge 2 in 2023, with Bulgari and Louis Vuitton joining existing stores from major brands including Gucci, Rolex, and Hermes. 

The opening of the Bulgari store also gave a glimpse into the perceived benefits for travellers of buying luxury goods at the airport, with Bulgari’s managing director of Northern Europe, Bart de Boever, stating that the new outlet would entice buyers by creating “a memorable experience for travellers”.

This sentiment is echoed by aviation historian Professor Dan Bubb, who says that airport outlets now provide people the increasingly rarer chance to get up close to goods before they spend large amounts on a purchase. 

“Having the chance to shop in high-end shops in airports (in a safe environment) brings back that familiar experience of shopping in brick and mortar stores,” He says. 

The airport sector’s ability to provide an experience no longer seen on high streets can also be seen when its success with luxury retail growth is compared to the decline of certain high-end department stores around the world. 

In the UK, the centuries old Debenhams closed all of its remaining 118 physical stores in 2021 and similar brands, such as Jelmoli in Switzerland, have faced the same fate elsewhere as consumers largely move their spending online. 

With many remaining department stores also seeing in a decline in their sales, it could soon be the case that airports become the most accessible place to explore multiple luxury brands at once for many passengers.

The uniqueness of an airport-based luxury outlet also often extends to the goods on offer, with many brands seeing the benefits of providing an “airport-exclusive” product.  

“Some goods might be available in airports that travellers are unable to purchase in a brick and mortar store, or even online,” Bubb says, “Airport shops are the perfect place to beta-test products to see which ones are popular, and which ones are not.” 

This avenue has already been recognised by airports themselves as well, with Heathrow Airport telling Airport Industry Review that it was using exclusivity to attract luxury buyers amid challenges to the travel retail sector. 

“While the removal of tax-free shopping has made it harder for retailers in the UK to compete on price alone, we can offer a retail experience that’s exclusively Heathrow,” the spokesperson says. 

“From our dedicated team of Personal Shoppers, to ‘only at Heathrow’ items, and the country’s first ever Louis Vuitton café, we’re working with our retail partners to maintain the magic of luxury airport shopping.”

Heathrow’s Louis Vuitton café particularly highlights the benefits of using exclusivity to drive the growth of luxury retail, with the fashion house describing the hybrid store-café as an “immersive” blend of fashion and “art de vivre” designed to enhance the travel experience for its visitors. 

Other European airports have also taken advantage of the chance to offer a unique experience with Rome’s Fiumicino airport featuring a Bulgari outlet offering services such as bottle engraving and custom gift wrapping to “enrich the transportive ambiance of the space”. 

Schiphol also says this growing desire from luxury brands to reach international passengers has supported its efforts to embrace high-end outlets.  

“When we were sharing our strategy and plans with the luxury industry, and showing the units we are creating, they responded all very positively,” an airport spokesperson says. 

“Luxury brands understand the importance of Schiphol as a key airport in the global network and also recognise the relevance of the passenger profiles travelling through Schiphol.”

The move to create a unique experience comes as the major European airports follow the lead of their Asian counterparts, such as Abu Dhabi’s Zayed International and Singapore’s Changi Airport, in positioning the airport as a luxury destination itself, with the Asia-Pacific region dominating the travel retail market at just under 50% of its global valuation 

Recently, the UAE capital’s airport used the opening of its Terminal A building in 2023 as an opportunity to attract a variety of big-name high-end brands, putting luxury outlets from Omega, Coach, and Hermès next to mid-range shops such as WH Smith and Bath and Body Works. 

Its efforts exemplify the attitude of the region towards the luxury travel sector with Middle Eastern and Asian airports making up half of those on a list of the 20 airports offering the best luxury experience released by AllClear Travel Insurance in 2024, which put Dubai International at the top, though only just beating out London Heathrow. 

As global airports continue to jostle for the attention of luxury-focussed travellers wanting to “fully immerse themselves in an experience”, Bubb suggests the winners will be those who are willing to adapt. 

“Some people are very loyal to specific brands, so they will take advantage of being able to shop and spend time in a lounge that was designed by a luxury retailer,” he says. 

“To achieve all of this, airports must keep up with travellers' tastes, among which includes affluent travellers who expect to see luxury retailers in airports.”