30 October 2018
New retail mix will focus more on high-end fashion, F&B and duty-free shopping
By RAHIMI YUNUS / Pic By ISMAIL CHE RUS
Malaysia Airports Holdings Bhd (MAHB) is reformatting the layout of its airports in the country to increase the footprint of retail space with the aim to monetise it and improve the group’s revenue.
MAHB senior GM for commercial services Mohammad Nazli Abdul Aziz (picture) said the layout reset will be carried out in stages starting at the Langkawi International Airport, followed by the Kuala Lumpur International Airport (KLIA), klia2, Penang International Airport, Kota Kinabalu International Airport (KKIA) and Kuching International Airport.
“We are going to conduct a series of refurbishment to increase the retail profile of our five international gateways,” Mohammad Nazli said at a briefing in Kuala Lumpur yesterday.
He said the company is targeting to increase the average spending per pax (SPP) by four fold, from the current RM35 to about RM140 in five years.
Overall, the airport operator has also projected a boost from its non-aeronautical to aeronautical revenue with a 60:40 ratio, from the current equal 50% split.
Mohammad Nazli said the reformatting also involves a shift in retail mix with more focus on high-end fashion, food and beverage (F&B), and duty-free shopping, to bump up the SPP, resulting in a reduced percentage in the liquor and tobacco segments.
He added that the revamp works have largely completed in Langkawi, while tenders have been called for KLIA, and next month for Penang and Kuching. Additionally, work tenders for KKIA and KLIA satellite building will be called next year.
Mohammad Nazli said the layout reformatting would not incur major capital investment for the company, while the fit-out cost will be borne by retailers. He added that the reset will be further bolstered with an e-commerce strategy to converge the offline and online retail.
The global travel retail market is expected to reach US$125.1 billion (RM521.67 billion) by 2023 with a compounded annual growth rate of 8.9%, according to alliedmarketresearch.com. The Asia- Pacific region is forecast to exhibit the highest growth rate at 11% during 2017 to 2023, mainly supported by Chinese tourists influx.
KLIA and klia2 recorded retail sales of RM2.3 billion last year at a 13% growth of SPP.
Regional counterparts including Singapore’s Changi Airport, South Korea’s Incheon Airport and Hong Kong International Airport registered US$1.9 billion, US$2.1 billion and US$1.4 billion respectively in 2017.