Budapest’s improved category mix and marketing support delivering retail growth

Patrick Bohl, Head of Retail and Advertising, Budapest Airport and President, ACI EUROPE Commercial Forum, participated in this year’s ACI EUROPE Airport Commercial & Retail Conference. He spoke to Ross Falconer ahead of his address.

Patrick Bohl, Head of Retail and Advertising, Budapest Airport and President, ACI EUROPE Commercial Forum: “This is the time for the industry to come together, and become better at sharing best practice, connecting airports and business partners, and make sure we continue to innovate together to return to the growth path.”

The theme of this year’s ACI EUROPE Airport Commercial & Retail Conference is ‘Sales Solve Everything: The average spend per passenger at Europe’s airports is just €10.38* – surely we can do much better!’ Indeed, in conversation with Airport Business, Patrick Bohl, Head of Retail and Advertising, Budapest Airport and President, ACI EUROPE Commercial Forum, highlights an even more alarming figure: While passenger traffic in Europe showed average growth of 5% in 2016, sales per passenger declined by 5% according to the European Travel Retail Confederation (ETRC) Index.

“This is the time for the industry to come together, and become better at sharing best practice, connecting airports and business partners, and make sure we continue to innovate together to return to the growth path,” says Bohl. “Secondly, I believe that the importance of non-aeronautical revenues is often underrated, both in boardrooms and in national and European parliaments. ACI EUROPE’s strength lies in promoting our interests with policymakers, media and industry bodies, and we need to make sure this is being used to the benefit of travel retail. Just think of it – duty free may be the only industry to benefit from Brexit. We need to make sure we grasp this opportunity.”

Budapest Airport is constantly looking for new revenue opportunities, and commercial revenues have grown steadily in recent years. “By the end of this year, our commercial concessionaires will have made 37% more sales than three years ago, within the existing footprint. An improved category mix, marketing support, airport atmosphere and high passenger satisfaction have all played their part,” Bohl explains.

The Trinity promotions have been notably successful. “Planning ahead requires alignment of airport, retailer, brands and advertising concessionaire, so in our case it’s actually four, not three partners,” says Bohl. “We have recently appointed IAAC Ltd as our new master airport advertiser, and using their exciting new digital media we have kicked off this year’s Trinities together with Gebr. Heinemann and Beam Suntory, involving several tasting stages and gifts with purchase. We are working on another 13 promotions of individual brands, in addition to our thematic retail activities focusing on specific categories and events.”

The airport is investing €160 million into its infrastructure over the next three years as part of the bud:2020 development plan, including construction of a 145-room airport hotel, new cargo facilities, a new pier in the non-Schengen area, and a multi-storey car park. “Currently, we are upgrading passenger facilities in Terminal 2B, which has given us the opportunity to make our non-Schengen duty free store ‘walk-through’ and fully refurbish several outlets in the souvenir, jewellery, watches, press & books, and foreign exchange segments,” Bohl comments.

Double-digit growth saw passenger numbers reach 11.4 million in 2016 and that trend has continued into 2017, with monthly passenger traffic growth in the period to end-February almost 15%. Bohl notes that, if the airport maintains this performance, it will need to consider an additional terminal in 2020, including new commercial areas.

Transferring innovative ideas

Alongside his role with Budapest Airport, Bohl is President of the ACI EUROPE Commercial Forum, which is focused on exchanging know-how among its members, identifying new revenue opportunities, and making sure the voice of the travel retail industry is heard where it matters.

“Currently, we have task forces on airport cities and real estate development, policy matters, and there are joint meetings with other committees planned, for example to make sure commercial aspects are not forgotten when discussing aviation security. I am aiming to engage more airport members into our work steams and to enable faster transfer of innovative ideas and opinions using a digital members-only platform,” Bohl concludes.

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