CXG, a global leader in luxury customer experience consulting and data-driven strategies for over 220 luxury brands, has released an illuminating new report revealing a significant value gap in the travel retail sector. Titled “Revolutionizing Travel Retail: A 2025 Industry Analysis and Outlook,” the report outlines the critical challenges and untapped potential within airport retail, calling for strategic transformation in the wake of pandemic recovery.
Industry Recovery Masks Deepening Revenue Challenges
While global air traffic is rebounding at pace, with ACI World forecasting 9.9 billion passengers in 2025 and nearly 19.5 billion by 2042, travel retail revenues tell a different story. The sector in 2023 totaled $72 billion, a 16% decrease from its $86 billion high in 2019. The average spend per traveller fell from $19 in 2019 to $16 in 2023, a15% decline that contributed to a $9 billion revenue shortfall.
CXG’s findings suggest this shortfall is not due to traffic volume, but rather to a customer experience deficit. Only 28% of travel retail boutiques were rated as delivering exceptional service, compared to 50% in domestic luxury retail – a 78% higher performance rate in domestic locations. This gap represents a significant missed opportunity to convert a time-rich, affluent and highly engaged airport audience.
Airports Becoming Experience Hubs
While passenger numbers surge, travel retail revenues still face mounting pressure, recognising the challenge, several of the leading international airports are redefining the travel retail, blending together luxury, innovation, wellness, and cultural immersion to create curated experience hubs.
- Singapore: A constant trailblazer, Changi Airport is embracing innovation with AI-powered retail and robot baristas. Immersive design elements, from rooftop gardens to indoor waterfalls, create refreshing environments for GST-absorbed shopping, gamified activations, and exclusive events such as Yves Saint Laurent Beauté’s onsite pre-launch of its Loveshine Candy Glow Tinted Butter Balm.
- Doha: Consistently challenging Changi for the annually awarded title of Skytrax World’s Best Airport, Hamad International Airport has transformed itself from a travel terminal into a designer shopping destination. It features over 200 retail and dining outlets,
anchored by the standout 800-square-meter Dior Luxury Beauty Retreat, a luxury spa sanctuary that elevates the airport wellness experience. This exclusive space offers travelers bespoke treatments crafted from Dior’s prestigious product lines, premium barber services, and an interior design inspired by Parisian elegance, setting a new benchmark for luxury and relaxation within the travel retail environment.
- London: One of the world’s busiest airports, Heathrow, has elevated passenger experience by replicating high-end retail initiatives, including a personal shopping concierge and an out-of-hours “millionaire’s door” service for ultra-high-net-worth individuals. Louis Vuitton’s new concept store at Heathrow Terminal 2, featuring its first UK café Le Café by Michelin-starred chef Cyril Lignac, blends luxury retail with a unique culinary experience. Housed in a striking flagship designed by Marc Fornes, this award-winning concept offers travelers an elevated and memorable journey, setting a new standard for airport retail.
In addition to these giants of international travel, pioneering developments are being incorporated into Seoul’s Incheon Airport, where Korean Cultural Street has boosted retail spend by 35% through dynamic data-driven consumer engagement, and Bangalore’s Kempegowda International Airport, where a garden terminal showcasing rare and ancient trees invites travelers into an immersive, stress-free environment. Adjustments and enterprises like these are helping to inspire travel retail spending by repositioning airports from simple transit points into curated experience hubs.
The Trilogy Approach: Aligning Stakeholders
Building on these airport innovations, CXG introduces a “Trilogy Approach” which is a comprehensive framework that aligns three critical stakeholders to elevate travel retail performance: Airport Authorities, Travel Retail Operators, and Brands.
- Airport Authorities: Focus on terminal experience, following the lead of the world’s best airports to develop positioning, maximize productivity, and manage key partners.
- Retail Operators: Close the gap on domestic luxury retail by enhancing operations, benchmarking performance against industry leaders, and optimizing conversion.
- Brands: Develop customer acquisition and maintain brand integrity across all locations, ensuring a consistent brand experience between high street and travel retail.
Building the Future of Travel Retail
Using proprietary evaluation systems, employee experience tools, and real-time audits, CXG guides brands in turning data-led insights into actionable strategies for customer acquisition and service-standard improvement, ensuring excellence is maintained through continuous monitoring and adjustment. In CXG’s “Trilogy Approach,” the value proposition varies by stakeholder but remains comprehensive throughout.
“Travel retail represents unique and exciting opportunities for luxury brands, but our report reveals many are failing to deliver the excellent customer experiences required for success,” said Christophe Caïs, Founder & CEO of CXG. “By applying our data-driven insights and holistic strategies, there is a possibility to not only drive improvements in individual businesses, but to revolutionize the entire sector.”
To future-proof the travel retail industry, stakeholders must work together to close the customer experience gap between travel and domestic retail. Staff performance must be enhanced and incentivized, inventory management systems must be improved to increase operational efficiencies, and shared KPIs must be established across airports, retail, and brand teams to ensure all parties are working in the same direction.
To download the full report, “Revolutionizing Travel Retail: A 2025 Industry Analysis and Outlook,” – Click here
