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IAADFS Board to Meet in June in Orlando

The IAADFS Board of Directors, in conjunction with ASUTIL, will be meeting in June in Orlando in the new home for the 2019 Duty Free & Travel Retail Summit of the Americas, the Hyatt Regency Orlando. After evaluating the survey results from the 2018 Summit, IAADFS and ASUTIL are exploring ways to better collaborate on the 2019 Summit of the Americas and incorporate enhancements designed to drive increased buyer participation and result in a more cohesive exhibit area. Additional information about the 2019 Duty Free & Travel Retail Summit of the Americas is expected to be available in July.
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News from IAADFS
IAADFS Signs onto Letter Supporting Airport Infrastructure Investment
IAADFS Bids Farewell to Ana Montañez

Industry News
"BWI Airport Retail Program Expands and Becomes Permanent"
"Western Japan Touts Rural Charms to Lure Asian Tourists"
"Study Shows Fliers Still React to Advertisements They See in Airports"
"Study: Hurricanes Cost Caribbean $741M in Visitor Spending"
"Malaysia to Double Airport Capacity for 2 Billion Fliers in Asia"
"Gebr Heinemann Expects Double Digit Growth This Year After an Exciting 2017"
"China Widens Visa-Free Travel to Hainan"
"$230 Million Modernization Plan on Way for St Thomas Airport"
"GST Alert: Shopping at Delhi Airport's 'Duty Free' Shops? Now, Pay Goods and Services Tax"
"Fraport USA Sets Up Shop in JetBlue's Terminal 5 at New York-JFK"
"Lotte Group to Bid to Reopen Duty Free Shops at Incheon Airport"
"Homeland Security Facial Passenger Scans for U.S. Airports May Go Nationwide"

News from IAADFS

IAADFS Signs onto Letter Supporting Airport Infrastructure Investment

IAADFS joined with the Airports Council International - North America’s Beyond the Runway Coalition and joined 25 other organizations expressing support for an amendment to the Federal Aviation Administration (FAA) Reauthorization Act of 2018 that would encourage development of an investment plan to fund much-needed infrastructure improvements at airports in the United States. To read this letter and see the supporting organizations, click here.
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IAADFS Bids Farewell to Ana Montañez

Ana Montañez, who joined the IAADFS team in October 2016, has accepted another position in the Washington DC area in the field of government relations. Ana has been a valued member of the team, and we wish her luck in her new position. IAADFS is currently reviewing potential candidates and will announce the new team member once they have joined the staff.
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Industry News

BWI Airport Retail Program Expands and Becomes Permanent
Baltimore Sun (04/30/18) Mirabella, Lorraine

Baltimore/Washington International Thurgood Marshall Airport (BWI) will expand its LaunchPad pilot program and make it permanent for retail entrepreneurs, according to program operator Fraport USA. The program aimed to help local entrepreneurs jump-start businesses that could grow into permanent retailers at the airport. It started with four micro-businesses selling wares such as accessories, hair and beauty products, herbal teas, and women's fashions from kiosks in the airport's terminals. Several of the original retailers will start a second year at the airport. "This successful pilot opens the door for more local startups and small businesses at the airport," said Brett Kelly, vice president of Fraport Maryland. BWI seeks two or more new local small business owners to join the program, and after an application process, selected retailers will get 12-month leases for a kiosk along one of the concourses, receive training in sales and marketing support. Applications are due by May 11.
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Western Japan Touts Rural Charms to Lure Asian Tourists
Nikkei Asian Review (Japan) (04/29/18) Sugiura, Eri

According to the Mizuho Research Institute, several prefectures in western Japan have seen a dramatic increase in the annual number of overnight stays made by foreign tourists in the past few years. When comparing the figure averaged over 2013 to 2017 with the number for 2012, there was an 87 percent rise in Tokyo, but the rural western prefecture of Kagawa experienced an even larger increase of 485 percent, more than three times the national average. In Saga Prefecture on the island of Kyushu, 379,000 foreign visitors stayed one or more nights in 2017, nine times more than in 2012. Scheduled flights connecting the local airport to Seoul and Shanghai have contributed to the boom. Around 4,600 Thais visited the prefecture in 2015, compared with 380 in 2012. For years, the tourism industry in western Japan largely catered to Koreans and Chinese hopping over for a quick shopping spree in the department stores of Osaka and Fukuoka. But thanks to local government initiatives focusing on experience-based consumption like those made in Saga, many visitors are now heading to lesser-known areas. Kochi Prefecture on the island of Shikoku, which had one of the lowest numbers of foreign visitors in 2016, has seen a significant upturn. The main berth at the prefectural capital's port has been enlarged, meaning it could host 42 cruise ships in 2017, compared with just six in 2012. The number of stores offering duty-free goods to tourists in the prefecture increased from four in 2014 to 116 in 2017.
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Study Shows Fliers Still React to Advertisements They See in Airports
International Airport Review (04/23/18)

A consumer insights study carried out by Nielsen on behalf of Clear Channel Outdoor, an American advertising company, reveals that 52 percent of frequent fliers take action in response to advertisements they have seen in an airport, and 19 percent buy items based on advertisements. Of the 80 percent of frequent fliers who noticed advertisements while in the airport, 42 percent took action that included visiting a website, going to a store, or learning more about a brand, product, or service. The study found that airport campaigns are a significant driver of foot traffic, with 84 percent of frequent fliers likely to visit a restaurant, 50 percent likely to visit a clothing, accessories, or jewelry store, and 41 percent likely to visit a consumer electronics store. The research also indicated that active dwell time increases advertising exposure with 74 percent of frequent fliers arriving at the airport over an hour before boarding. Seventy-nine percent of frequent fliers shopped for food/beverages, 67 percent dined at a restaurant, 51 percent shopped for travel accessories/technology products/entertainment, and 29 percent shopped duty-free. "This study confirms that airport advertising creates significant brand awareness and sales by helping advertisers reach highly coveted audiences such as the affluent frequent flier and the key business decision makers around the world," said Morten Gotterup, president of Clear Channel Airports.
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Study: Hurricanes Cost Caribbean $741M in Visitor Spending
Travel Weekly (04/18/18) Myers, Gay Nagle

According to the "Resilience and Recovery" report by the World Travel & Tourism Council, the Caribbean had 826,100 fewer visitors than forecast because of the 2017 hurricanes. "These visitors would have generated $741 million in revenues and supported 11,005 jobs. Research suggests that recovery to previous levels could take up to four years, resulting in an approximate loss of $3 billion," the report said, warning that climate change means natural disasters will continue to affect the region. "It is critical that governments and destination management organizations develop strategies to minimize the long-term impact of natural disasters and encourage visitor spending to return to pre-hurricane levels of growth."
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Malaysia to Double Airport Capacity for 2 Billion Fliers in Asia
Bloomberg (04/25/18) Chew, Elffie; Park, Kyunghee

Over the next 10 years to 20 years, Malaysia Airports Holdings Bhd. plans to double the capacity of Kuala Lumpur International Airport from 75 million to 150 million, according to CFO Raja Azmi Raja Nazuddin. He indicated that the main terminal could reach full capacity in the next two years, noting that "we have started studies on the optimization and expansion. The outcome will determine the configuration that we will have to take within a year or two." An additional 2.1 billion passengers are expected in Asia Pacific in the next two decades, and Kuala Lumpur joins Bangkok and Singapore in looking to expand airport capacity as a result. Malaysia's tourism board is targeting foreign visitor arrivals of 36 million by 2020, up 39 percent from last year. This year, Malaysia Airports expects passenger traffic across the airports it manages to jump 6.3 percent due to easier visa approvals for visitors from China and India.
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Gebr Heinemann Expects Double Digit Growth This Year After an Exciting 2017
Airport World (04/18/2018)

Gebr Heinemann landed new contracts and had a strong performance from its existing businesses in 2017, earning 4.1 billion euros, an increase of 6.6 percent. The firm has a strong presence in Eastern European countries such as Russia, Ukraine, Georgia, and Romania. In Asia, the firm continued to expand its business in Malaysia. The new contracts it landed were for Hong Kong International Airport and in partnership with James Richardson at Ben Gurion Airport in Tel Aviv for the first time. In Australia, the company won a new location at Gold Coast Airport. Additionally, the Heinemann Americas and Heinemann Asia Pacific subsidiaries were successful in their joint bid to supply and operate the shops on four Carnival Cruise Line ships. Even though global political developments have influenced some markets, Co-Owner Claus Heinemann says, "Despite the challenges, I think 2017 was a respectable year for us with healthy and robust developments, so we were generally satisfied with the results." He predicts double-digit sales growth for 2018 and adds that "we want to achieve even stronger growth in Asia and America this year, and haven't forgotten Europe, but believe that the growth potential in these regions is even greater."
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China Widens Visa-Free Travel to Hainan
Travel Weekly (04/22/18) King, Danny

Beginning May 1, the Chinese government will allow residents of 59 countries — including those in North America, Southeast Asia, Western Europe, and South America — to travel to the island of Hainan for up to 30 days without a visa. Previously, visa-free travel was permitted from 26 countries, but the Chinese government has since added numerous countries from Europe and South America. However, countries in Africa and many in the Middle East are not on the list of visa-free countries.
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$230 Million Modernization Plan on Way for St Thomas Airport
Caribbean Journal (04/22/2018)

The Cyril E. King Airport on St. Thomas will soon undergo a major transformation. U.S. Virgin Islands Gov. Kenneth Mapp will soon unveil plans for a $230 million modernization of the airport. He said, "We have a very bright future ahead. But it will require hard work, real tough decisions, and creating, establishing and maintaining very strong, vibrant, and positive relationships with our private partners." The public will soon be invited to discuss the planned improvements at meetings with the Virgin Islands Port Authority.
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GST Alert: Shopping at Delhi Airport's 'Duty Free' Shops? Now, Pay Goods and Services Tax
Financial Express (04/22/18)

International passengers buying goods at duty-free shops at the Delhi International Airport in India will have to pay under the Goods and Services Tax regime thanks to an Authority for Advance Ruling (AAR). The previous regime of excise and service tax exempted duty-free shops from central sales tax and value added tax as sale from such shops were considered as exports and supplies were taking place beyond the "customs frontiers" of India. The New Delhi bench of the AAR ruled that because the duty-free shops are within the territories of India, they are subject to the tax. EY Partner Abhishek Jain said the AAR has interpreted the scope of "export" in quite a constrictive manner for outbound supplies made by duty-free shops.
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Fraport USA Sets Up Shop in JetBlue's Terminal 5 at New York-JFK
Airport World (04/20/2018) Bates, Joe

Fraport USA has taken over the day-to-day management operations of the retail/F&B concession at JetBlue's Terminal 5 at New York's John F. Kennedy International Airport (JFK). Fraport will work closely with JetBlue on further enhancing the range of shops and restaurants, including a diverse lineup of unique and local New York-inspired offerings. Fraport USA President and CEO Ben Zandi says, "Fraport USA will be working closely with JetBlue to take the passenger experience at JFK to the next level. Our master plan will provide a best-in-class airport experience reflective of New York's vibrant culture and JetBlue's position as one of the most respected and innovative airlines in the industry." Renowned for its innovative approach, Fraport USA (formerly Airmall) claims to have been the first to launch street pricing and branded retail programs at U.S. airports.
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Lotte Group to Bid to Reopen Duty Free Shops at Incheon Airport
Pulse (04/19/2018) Lee, Yoo-jin; Lee, Ha-yeon

Lotte Group, South Korea's fifth-largest conglomerate, is rebidding for the license to operate duty-free shops at Incheon International Airport. In February, Lotte returned three of its four business licenses due to a dramatic decrease in sales after a nearly 50 percent drop in Chinese tourists following Beijing's ban on group tours to Korea in retaliation for Seoul's installation of a U.S. missile shield system. The company retained the license for its liquor and cigarette business. Lotte CEO Jang Seon-wook said on April 18 that "we are seriously considering to re-bid, given the significance of the airport presence."
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Homeland Security Facial Passenger Scans for U.S. Airports May Go Nationwide
Skift.com (04/18/18) Peltier, Dan

The U.S. Department of Homeland Security has processed travelers with facial recognition scans at many U.S. airport as part of a series of pilot programs in the last year, and the agency now believes the program is ready to be expanded nationwide. Various airlines and airports have undertaken trials of facial recognition in recent years, says Isabel Hill, director of the National Travel & Tourism Office, part of the U.S. Department of Commerce. "We're developing a process where you'll go from reservation to destination without ever showing a boarding pass. We're implementing this across a number of U.S. airports," she adds. Pilot programs have processed 400 passengers in 22 minutes at some airports. "For the government, the most important part is that this enhances the security. We're very excited about the possibility of transforming the travel experience," says Hill. Some critics have raised concerns about privacy, but Hill says, "In the United States, your face is your token. We don't need further development of blockchain technology for this to happen." However, the private sector also has to get on board if the U.S. government wants nationwide facial scans to become reality. "We, the government, will end up layering this on to an existing system rather than creating a system with the private sector that works for both sides if the private sector doesn't get involved," she says.
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May 3, 2018


The International Association of Airport Duty Free Stores (IAADFS) is an international trade association with approximately 400 company members. The purpose of the IAADFS is to promote the airport duty free industry as an important segment of the international business community; provide activities whereby operators of airport duty free stores and their suppliers can exchange information on products and their duty free market potential; and serve as a collective voice in representing the airport duty free industry on common issues affecting the membership.

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