welcome the moodie report 7 days september 2002 ... brand specialist to the key post of retail ......

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FAST, FACTUAL, FREE Page 1 ©The Moodie Report 7 Days is published by Moodie International. All rights reserved. Please send any comments or stories to [email protected] Atul Ahuja: A huge week for the Flemingo owner as his company landed a 50% share of the duty free concession at Colombo Bandaranaike International Airport, while in Poland the company’s recent acquisition, Baltona, went public today. Muriel Zingraff-Shariff: London Heathrow Airport this week named the vastly experienced retail and brand specialist to the key post of Retail Concessions Director. Her previous roles include senior positions at Harrods, Paco Rabanne (CEO), Jimmy Choo and La Quinta; and recently she has been working in the luxury sector with 3i and Oaktree Capital. “Shoppers have switched their purchasing to UK and European airports, where such restrictions have not been implemented, and this continues to cause a significant drop in sales and a loss to the Irish Exchequer, as customers buy tobacco products abroad.” Dublin Airport Authority CEO Declan Collier bemoans a steep decline in tobacco sales as a result of draconian new display restrictions at Irish airports. PERSONALITIES OF THE WEEK QUOTE OF THE WEEK WELCOME to The Moodie Report 7 Days, the 400th edition since our launch in September 2002, writes Martin Moodie. Anyone who has started up a company will appreciate the importance one bestows on every landmark along the way, and we’re delighted to have reached another. Thank you for being with us on a journey of discovery and enjoyment as our media ‘e-volution’ has flourished over the past decade. If anyone doubts the phenomenal impact of the Chinese on the world’s tourism and travel sector they need look no further than the latest edition of the United Nations World Tourism Organization (UNWTO) annual report on tourism (page 8) for dramatic confirmation.The report highlights China’s emergence as the world’s third- biggest tourism spender, a critical indicator for travel retail. The top ten ranking by international tourism spenders shows one “remarkable” change in 2010, UNWTO said, with China (US$55 billion) moving up into third position, overtaking the UK (US$49 billion). “China has shown by far the fastest growth with regard to expenditure on international tourism in the last decade, multiplying expenditure four times since 2000,” it said. The implications for travel retail barely require spelling out. “Ranking as the seventh-biggest source market in 2005, China has since overtaken, respectively, Italy, Japan, France and the UK,”UNTWO continued. China was also a big mover in tourism arrivals, advancing into third position ahead of Spain, having overtaken the UK and Italy during the past few years. In terms of receipts, China (+15%) also moved up the ranking to fourth position, overtaking Italy. Collectively, such statistics tell us that the Chinese dynamic within our industry is both long term and irresistible. Finally, I was deeply touched to be honoured with a special accolade by Latin American Duty Free Association ASUTIL last week during its annual conference in Cancún, Mexico. I received the award via Skype video link-up to London during what I thought was an opportunity for me to thank the ASUTIL board and delegates for their tremendous support to me during my illness last year. I did manage to convey that message, but I was shocked to also receive ASUTIL’s Lifetime Achievement in Duty Free award during the same call. I’m not sure I deserve that recognition (those who have been awarded it before have given much selfless service to the region’s industry) but I accept it with great honour, pleasure and pride. Last year when I was unwell the entire ASUTIL conference audience signed a get well card, which was delivered to me after a hospital session. At the time it felt like the best medicine possible; but this award tops it. It is precisely what the doctor ordered. A proud moment for The Moodie Report as ASUTIL President Francisco Heredia (left) and Secretary General José Luis Donagaray (right) presented the association’s Lifetime Achievement Award to the title’s Founder & Chairman Martin Moodie at the annual conference in Cancún, Mexico. The Moodie Report’s Special Correspondent Peter Dowling and Karen Lindsay accepted the award on behalf of Moodie, who joined the conference earlier by video link. Image of the Week FRIDAY SATURDAY SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY 30 JUNE 2011 Days The Week in Travel Retail Issue 400 EDITION

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FAST, FACTUAL, FREE

Page 1©The Moodie Report 7 Days is published by Moodie International. All rights reserved.Please send any comments or stories to [email protected]

Atul Ahuja: A huge week for theFlemingo owneras his companylanded a 50%share of the dutyfree concession at ColomboBandaranaikeInternationalAirport, while inPoland thecompany’s recent acquisition,Baltona, went public today.

Muriel Zingraff-Shariff:London Heathrow Airport thisweek named the vastlyexperienced retailand brandspecialist to thekey post of RetailConcessionsDirector. Herprevious rolesinclude seniorpositions atHarrods, PacoRabanne (CEO), Jimmy Chooand La Quinta; and recently she has been working in theluxury sector with 3i and Oaktree Capital.

“Shoppers have switched theirpurchasing to UK and Europeanairports, where such restrictionshave not been implemented, andthis continues tocause a significantdrop in sales anda loss to the IrishExchequer, ascustomers buytobacco productsabroad.” DublinAirport AuthorityCEO DeclanCollier bemoans a steep declinein tobacco sales as a result ofdraconian new displayrestrictions at Irish airports.

PERSONALITIES OF THE WEEK

QUOTE OF THE WEEK

WELCOME to The Moodie Report 7 Days, the 400th edition since our launch inSeptember 2002, writes Martin Moodie. Anyone who has started up a company willappreciate the importance one bestows on every landmark along the way, and we’redelighted to have reached another. Thank you for being with us on a journey ofdiscovery and enjoyment as our media ‘e-volution’ has flourished over the past decade.

If anyone doubts the phenomenal impact of the Chinese on the world’s tourism andtravel sector they need look no further than the latest edition of the United NationsWorld Tourism Organization (UNWTO) annual report on tourism (page 8) fordramatic confirmation. The report highlights China’s emergence as the world’s third-biggest tourism spender, a critical indicator for travel retail. The top ten ranking byinternational tourism spenders shows one “remarkable” change in 2010, UNWTO said,with China (US$55 billion) moving up into third position, overtaking the UK (US$49billion). “China has shown by far the fastest growth with regard to expenditure oninternational tourism in the last decade, multiplying expenditure four times since 2000,”it said. The implications for travel retail barely require spelling out.

“Ranking as the seventh-biggest source market in 2005, China has since overtaken,respectively, Italy, Japan, France and the UK,” UNTWO continued. China was also a bigmover in tourism arrivals, advancing into third position ahead of Spain, having overtakenthe UK and Italy during the past few years. In terms of receipts, China (+15%) alsomoved up the ranking to fourth position, overtaking Italy. Collectively, such statistics tellus that the Chinese dynamic within our industry is both long term and irresistible.

Finally, I was deeply touched to be honoured with a special accolade by Latin AmericanDuty Free Association ASUTIL last week during its annual conference in Cancún,Mexico. I received the award via Skype video link-up to London during what I thoughtwas an opportunity for me to thank the ASUTIL board and delegates for theirtremendous support to me during my illness last year. I did manage to convey thatmessage, but I was shocked to also receive ASUTIL’s Lifetime Achievement in DutyFree award during the same call.

I’m not sure I deserve that recognition (those who have been awarded it before have givenmuch selfless service to the region’s industry) but I accept it with great honour, pleasureand pride. Last year when I was unwell the entire ASUTIL conference audience signeda get well card, which was delivered to me after a hospital session. At the time it felt likethe best medicine possible; but this award tops it. It is precisely what the doctor ordered.

A proud moment for The MoodieReport as ASUTIL PresidentFrancisco Heredia (left) andSecretary General José LuisDonagaray (right) presented the association’s LifetimeAchievement Award to the title’sFounder & Chairman MartinMoodie at the annual conferencein Cancún, Mexico. The MoodieReport’s Special CorrespondentPeter Dowling and Karen Lindsayaccepted the award on behalf ofMoodie, who joined theconference earlier by video link.

Image of the Week

FRIDAYSATURDAYSUNDAYMONDAYTUESDAYWEDNESDAYTHURSDAY 30 JUNE 2011DaysThe Week in Travel Retail

Issue400

ED

I TI O

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Thursday 30 June 2011The Moodie Report 7 Days

Page 2©The Moodie Report 7 Days is published by Moodie International. All rights reserved.Please send any comments or stories to [email protected]

NEW ZEALAND. Auckland Airportcontinued its winning streak with the design teambehind the revamp of the international departuresarea being named the Supreme Winner at the RedRetail Design Awards.

Held at Auckland’s Maritime Museum on 25 June,the awards – which promote excellence in retaildesign – recognised Auckland Airport’sinternational airside Departures area as being thestandout entry in a year which saw the highestnumber of competitors in the history of the awards.This win follows the airport’s recent achievement of an Excellence Award in the Retail Propertycategory at the annual Property Council RiderLevett Bucknall Property Industry Awards 2011.

“Our international terminal area has seen a lot of positive design changes recently,” said Auckland Airport GeneralManager for Retail & Commercial Adrian Littlewood. “We have been working very hard to create a uniqueenvironment that offers our passengers a first-class travel experience and still subtly reflects New Zealand design.”

POLAND. Shares in travel retailer Baltona, majority-owned by Indian operator Flemingo, are to be listed onNew Connect, the alternative market of the Warsaw Stock Exchange, from today (Thursday).

The move has been a year in the planning, The Moodie Report understands, following Flemingo’s purchase of acontrolling share in Baltona from the Polish government in April 2010. A source close to Flemingo described it as “animportant milestone in the development and further growth of the company”, adding that the capital generated wouldsupport the retailer’s “aggressive expansion in Europe” via Baltona.

In a statement PHZ Baltona SA Chief Executive Magda Grzybowska said: “This [is an] opportunity to presentinvestors with the ‘new Baltona’, a company that is a leader in Polish duty free & travel retail and which aspires toachieve the same position in other countries in Central and Eastern Europe. I am convinced that thanks to theprofound changes in the company, and to our new developmentstrategy, we can achieve our goals and gain the confidence of investors.”

“The listing of Baltona’s shares will help achieve better visibility andawareness,” the source confirmed. “It will allow access to financing infuture, as a move to the main market is planned next year. It will alsohelp in discussions with local vendors, banks and so on, and will enhancethe perception of the company with regard to state-owned airports.”

The source added that the listing had generated “significant interestfrom the media associated with the listing [and] we foresee goodinterest from investors”.

Flemingo is being advised by Bastion Capital, its adviser during theBaltona acquisition process. Baltona is Poland’s biggest airport retailerwith a market share of about 45% and total revenue of PLN155 million(US$55.4 million) last year. The company has forecast total revenue togrow to PLN175 million (US$62.6 million) this year.

Baltona runs 21 stores in eight Polish airports, including all theinternational locations. Its operations include shops at Gdansk,Katowice, Kraków, Poznan, Rzeszów, Warsaw and Wroclaw airports; aduty paid border store on the German crossing; and a shipchandlingbusiness.

Moodie Interactive: Click for the advertiser’s website

THE MOODIE REPORT 7 DAYS BUSINESS NEWS

Thursday 30 June 2011The Moodie Report 7 Days

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SRI LANKA. Flemingo has signed its dutyfree contract at Colombo BandaranaikeInternational Airport (BIA). The contract wassigned by Flemingo Managing Director MahendraThakar and BIA Chairman PrasannaWickramasuriya.

As revealed by The Moodie Report, Flemingo hasbeen awarded a 50% share of the duty free spoils atthe airport, with the former exclusive incumbentOrient Lanka (Aldeasa) set to be awarded thebalance.

It is likely that Aldeasa and Flemingo will sharespace equally, each running 300sq m of space splitbetween Departures and Arrivals. The targetedstart-up date for the new concessions, which willrun for five years, is August.Flemingo and BIA executives sign the duty free contract in Colombo

THE MOODIE REPORT 7 DAYS TENDER & CONTRACT NEWS

SINGAPORE. Changi Airport Group has called on potential retailers to take part in a Direct Approach Exercisefor the key wine & cigar concession at Singapore Changi Airport Terminal 2.

“We are looking for established companies to operate the Wine and Cigar Concession and to retail a wide range ofwines, cigars, wine-related accessories and cigar-related accessories,” the airport company said. “We are looking for anexciting wine and cigar concept to inject buzz and differentiate the retail offerings at Changi Airport.”

The unit measures 98sq m and is located in T2’s Departure/Transit Lounge Central. The concession runs from 1December 2011 until 30 November 2012, with an option to renew for a further two years. The closing date for offers is18 July. DFS is the incumbent operator.

US. Los Angeles World Airports (LAWA), a Department of the City of Los Angeles, announced last Friday that itwill be issuing a Request for Proposals (RFP) from firms to operate the airport-wide duty free concession at LosAngeles International Airport (LAX). DFS is the incumbent retailer.

LAX ranks sixth in the world and third in the US in total passengers,and is the third-busiest airport in the US in terms of internationalpassengers. LAX handled 15.9 million international passengers in2010.

Moodie Interactive: Click for the advertiser’s website

THE MOODIE REPORT 7 DAYS GENERAL NEWS

Thursday 30 June 2011The Moodie Report 7 Days

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The LAX duty free concession will be the second-highest-grossing duty free contract in the US, LAWA said. Only theconcession at Honolulu International Airport (also run by DFS) produces higher annual sales volume.

LAWA said that in addition to the high annual sales volume, the LAX duty free concession presents a number ofopportunities for potential duty free concessionaires:n A presence at the dominant airport serving Los Angeles and Southern California and the leading gateway on the

West Coast of North America.n A highly visible international presence in a world-famous international tourism destination.n Access to a major international US gateway serving fast-growing US–China and other US–Asia markets, as well as

airlines serving Europe, Australia, the Pacific, the Middle East, Mexico, Central and South America, Canada andMexico.

n Entry to the US concession market at a top-three, high-profile airport.n An operating presence in all LAX terminals handling international departures, thereby mitigating the effect of future

airline relocations.n Excellent location in the new post-security retail area of the Tom Bradley International Terminal, now undergoing a

US$1.5 billion transformation into a world-class international terminal.

LAWA is encouraging qualified duty free retailers to learn more about the concession opportunity and to participate inthe selection process. The RFP is scheduled to be issued in September of this year. The commencement date of theconcession is scheduled to be no later than 1 January 2013.

For more on the RFP at LAX, including a plan of the area and contact details, go to www.TheMoodieReport.com

US. San Francisco International Airport (SFO) has issued a Request for Proposal for the International TerminalAutomated Retail Lease.

A conference will be held for interested parties at the airport – SFO Business Center, 575 N. McDonnell Road, 2ndFloor Conference Room – on 14 July at 10am. Staff will outline the desired concept and minimum qualificationrequirements, address any questions relating to the lease and receive comments from participants.

Written comments and recommendations will be accepted until 12 noon on 19 July.

The lease comprises three locations in the International Terminal for automated retail units at SFO. The proposedminimum acceptable proposal amount is US$50,000, which will be the successful proposer’s minimum annual guaranteefor the first year of the lease, and a proposed term of five years with one option to extend the term for two years thereafter.

Bids are required by 10am on 14 September. For a hard copy of the RFP document or for additional information aboutthe concession, contact Ronald D. Gonzales, Principal Property Manager, Revenue Development and Management, ontel: +1 650 821 4500, fax: +1 650 821 4519 or e-mail [email protected]

PORTUGAL. ANA Aeroportos de Portugal is set to turn its Livening magazine into a multi-platform brand,with its own website and a strong presence on social media in addition to the print version.

The biannual publication for Portuguese airports www.livening.net is an integral part of ANA’s marketing strategy andaims to enhance the performance of commercial areas within ANA-managed airports. It is distributed to passengersfree of charge, and is available in Lisbon, Porto, Faro and Azores airports.

Livening’s new strategic positioning aims to strengthen its relationship with readers and to attract a wider readershipwith its increased and improved content.

As a result of greater editorial investment, the magazine’s content will be adapted to different media formats. The newcontent will include feature stories, profiles, fashion editorials, airport information and leisure suggestions written bywell-known guest writers, figures renowned within their area of expertise, opinion-makers and bloggers.

The magazine will be split into four parts: ‘Check In’, ‘Take Off ’, ‘Arrivals’ and ‘Exit’. The first three can be found inevery magazine; ‘Exit’ will be a supplement with tourist information related to the region of each ANA airport.

Thursday 30 June 2011The Moodie Report 7 Days

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HONG KONG. Airport Authority Hong Kong (AAHK) revenues from retail licences and advertising surged by+22.8% in the financial year to 31 March, hitting HK$3.58 billion (US$460 million). The retail & advertising divisionaccounted for 33.8% of group turnover in the year.

Total revenue rose +17.4% during the year to HK$10.58 billion (US$1.36 billion) with EBITDA up by +24.9% toHK$7 billion (US$900 million). Profit attributable to the equity shareholder (the Hong Kong SAR government) wasHK$4.03 billion (US$517 million) for fiscal year 2010/11, an increase of +41.9% from a year earlier.

Passenger traffic rose by +9.7% to 51.5 million in the year and flight movements climbed by +12.9% to 316,000.

“We achieved remarkable results in fiscal 2010/2011 and set records for all performance indicators,” said AAHK ChiefExecutive Stanley Hui Hon-chung. “This was largely buoyed by sustained economic growth in the Mainland and HongKong, a rebound in global trade and increased demand for aviation services. The surge in profit was mainly a result ofrecord revenue, effective cost management and productivity gains.

“In view of the sustained economic expansion of the Mainland and global economies, we believe air traffic will continueto grow, albeit at a slower pace. Earnings growth in the near term is also expected to be tempered by slower trafficgrowth and the higher base that was created in fiscal 2010/11.”

For further information on the results and details of developments at Hong Kong International Airport go towww.TheMoodieReport.com

IRELAND. Dublin Airport Authority (DAA), operator of Dublin, Shannon and Cork airports, has released itsAnnual Report and Financial Statements 2010. The results show that commercial revenue across the three airports,including direct and concessionaire sales, declined by -9% year-on-year to €221 million, amid a fall in traffic of -13% to22.6 million passengers in total. Traffic in Dublin Airport alone fell by -10% to 18.4 million.

However revenue per passenger increased by +4%, a performance DAA attributed to improvements to the retailenvironment together with new product ranges and services. The company’s most significant development in 2010 wasthe opening of Dublin Airport’s new Terminal 2 in November, containing 9,000sq m of commercial space and featuringa number of retail brands, both familiar and new.

DAA’s total group turnover rose by +2% to €558 million, driven mostlyby increases in aeronautical charges and increased overseas sales. Thegroup’s international retail division, Aer Rianta International (ARI),made a profit of €18.8 million in financial year 2010, compared to aprofit (before exceptional items) of €13.4 million in the previous year.

THE MOODIE REPORT 7 DAYS RETAIL & COMMERCIAL SALES RESULTS

Display restrictions on tobacco, as seen here in Dublin Airport Terminal 2,have caused a steep fall in sales across Irish airports

Thursday 30 June 2011The Moodie Report 7 Days

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EBITDA increased by +17% to €147 million last year, while group profit reached €33 million following a loss of €13million in fiscal 2009. The improvement in financial performance was attributed to the implementation of DAA’s CostRecovery Programme, which resulted in a -10% decrease in payroll costs as average staff numbers were cut from 3,168to 2,971.

DAA’s year-end net debt was €765 million, compared with €638 million at the end of 2009. In his statement DAAChairman David Dilger said that Ireland’s economic decline – added to one-off crises prompted by the Icelandicvolcano and severe winter weather – had had a “sharply negative effect” on passenger traffic. Referring to the part-state-owned company’s €1.2 billion investment in Dublin’s new T2, Dilger made a firm defence of the need to upgrade theairport’s facilities, which he said was in the national interest.

For more on DAA’s 2010 performance, including comment from CEO Declan Collier and Chairman David Dilger, goto www.TheMoodieReport.com

UK. Gatwick Airport Limited has releasedthe London airport’s results for the financialyear ended 31 March. The figures show thatpassenger traffic at the UK capital’s secondlargest airport reached 31.6 million, a decline of-2.3% compared with the previous 12 months,amid disruption caused by the Icelandicvolcanic eruption and by staff strikes. Howeverthe operator pointed to a traffic increase of+1.1% over the second half of the financial yearas evidence of a return to growth.

Gatwick Airport Limited is controlled byGlobal Infrastructure Partners (GIP) followingthe investor’s acquisition of the airport fromBAA. GIP also has a 75% share in LondonCity Airport.

Total retail revenue at Gatwick reached £115.6 million, up by +0.5% on the previous year. Net retail income perpassenger increased by £0.09 to £3.62, despite a reduction in retail space caused by new security and other developmentsin the South Terminal.

Car parking revenue was up by +2.6% to £51.7 million, despite a slight fall in income per passenger. Aeronauticalrevenue was stable at £244.3 million.

Gatwick Airport Limited claimed to have invested £211.4 million in financial year 2010/11 and pledged a further £400million in investment over the next two years. Gatwick Airport CEO Stewart Wingate said: “We delivered strongperformance in our first full year of new ownership despite the challenging environment and extraordinary events thataffected major airports across Europe.

“Resilient passenger traffic combined with our relentless focus on cost efficiency helped us achieve solid financial results.We also successfully refinanced the business, enhancing our capital structure and establishing a strong liquidity position.”

Gatwick Airport retail revenue for year ended 31 March

Year ended Year ended31 March 2011 31 March 2010

£ million £ million

Retail incomeTax and duty free, and specialist shops 58.9 58.0Catering 17.1 17.7Other in-terminal retail 36.5 36.3Other off-terminal retail 3.1 3.0

115.6 115.0Less: retail expenditure –1.1 –0.5Net retail income 114.5 114.5Passengers (million) 31.6 32.4Net retail income per passenger £3.62 £3.53

Source: Gatwick Airport Limited

THE MOODIE REPORT 7 DAYS DATA ROOM – PASSENGER TRAFFIC NEWS

ASIA PACIFIC. Preliminary traffic figures for May released by the Association of Asia Pacific Airlines (AAPA)showed further modest growth in international traffic, with member carriers in the region handling 14.8 millioninternational passengers, up +3.4% year-on-year.

Those figures were underpinned by continued strength in both leisure and business travel markets, AAPA said.

International passenger traffic, measured in revenue passenger kilometre (RPK) terms, grew by +4.7% reflecting relativelystronger demand on long-haul routes. Combined with a +5.1% increase in available seat capacity, the average internationalpassenger load factor was 73.6%, marginally lower than the comparable figure for the same month last year.

Thursday 30 June 2011The Moodie Report 7 Days

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AAPA Director General AndrewHerdman said: “On the passengerside of the business, we were pleasedto see continued growth in traveldemand, with both leisure andbusiness travel markets showingpositive results.

“Japanese outbound leisure trafficshowed some welcome signs ofrecovery [since the earthquake andtsunami –Ed], as did business travel

to and from Japan. However, inbound leisure traffic flows to Japan remain weak; it will take more time to fully restorepublic confidence.

“Over the first five months of the year Asian airlines have seen +2.5% growth in the number of international passengers.”

NEW ZEALAND. Total numbers up strongly, Japanese and South Korean visitors way down. That was the storyof Auckland Airport’s May passenger statistics which showed a +9.2% increase in international passenger volumes to595,136. Excluding transits, international passenger movements rose +8.5% to 514,818.

Japanese arrivals, so important to travel retail, collapsed by -51.1% in the wake of that country’s recent earthquake andtsunami. Korean arrivals, also key to Auckland Airport’s commercial revenues, were affected by earthquakes both inneighbouring Japan and in the southern New Zealand city of Christchurch, slumping -29.4%.

Importantly though, Chinese arrivals gained +17.4%, maintaining a powerful upwards momentum that has generated a+26.2% year-on-year increase on a financial year-to-date basis.

Australian traffic to Auckland increased +8.5%, benefiting from additional capacity on Auckland-Cairns. Singaporetraffic increased by +53.9% with Jetstar Asia adding approximately 19,700 seats to the market. But the important UKmarket was soft, falling -9.1%.

At Cairns Airport in Australia (another Auckland Airport holding) international passenger numbers rose +5.5% to 55,861.

SPAIN. Aeropuertos Españoles y Navegación Aérea (AENA), the country’s airport and air traffic control authority,posted a +6.4% year-on-year increase in passenger traffic in May to17,883,637. Madrid Barajas Airport experienced a -1.7% decline to4,213,488, but Barcelona El Prat posted a +22.3% surge to 3,072,750.

All of AENA’s top 12 airports except Madrid posted year-on-year growth.Palma de Mallorca was up+6.8%, Málaga +9.8% andAlicante +7.3%. TenerifeSur was the fastest riser,up +22.1%.

Over the first five monthsof 2011 passengernumbers across theAENA network rose by+8.5% to 75,001,913.Madrid Barajas Airportexperienced a +1.3% gainto 19,516,202, whileBarcelona El Prat Airportposted a +20.0% increaseto 12,639,500. All top tenairports posted year-on-year growth for the period.

MEN NAN LA MEN POU AYITI

For Pledge Details see www.HandinHandforHaiti.com

or e-mail:[email protected]

Moodie Interactive: Click for more information

Leading Spanish airports May 2011

Airport Passengers Changein May on year

Madrid Barajas 4,213,488 –1.7%Barcelona 3,072,750 +22.3%Palma de Mallorca 2,340,974 +6.8%Málaga 1,240,106 +9.8%Alicante 945,845 +7.3%Gran Canaria 707,652 +4.1%Tenerife Sur 560,201 +22.1%Ibiza 489,254 +11.7%Sevilla 461,462 +22.0%Valencia 426,354 +0.5%Lanzarote 408,834 +12.9%Fuerteventura 355,695 +15.4%

Source: AENA

International scheduled services of Asia Pacific airlines May 2011

International May May Change �Jan–May Jan–May Changepassengers 2011 2010 on year 2011 2010 on year

Passengers (’000) 14,846 14,361 +3.4% 75,805 73,926 +2.5%RPK (million) 57,231 54,651 +4.7% 290,204 280,550 +3.4%ASK (million) 77,777 73,978 +5.1% 384,766 360,140 +6.8%Load factor 73.6% 73.9% –0.3pp 75.4% 77.9% –2.5pp

Note: Aggregated traffic data for 23 Asia Pacific based carriers. Previous year data adjusted for comparison purposes. All figures, including estimates for missing data, are provisional. Source: AAPA

Thursday 30 June 2011The Moodie Report 7 Days

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UAE. Abu Dhabi International Airport handled over 943,000 passengers in May, a robust rise of +14% over the samemonth last year, Abu Dhabi Airports Company (ADAC) has announced.

During May the route between Abu Dhabi and Manila experienced the highest growth rate, with a +17% increase overlast year. There was also strong growth on routes to and from London, Bangkok, Doha and Jeddah.

ADAC Senior Vice President of Airports Operations Ahmed Al Haddabi said: “The continuous increase of Abu DhabiInternational Airport’s passenger traffic goes in parallel with the increased frequencies, new destinations, and newairlines operating at our airport.

“With the 900 weekly flights scheduled from the capital’s airport this summer season, this growth trend is expected tocontinue. At the same time the refurbished Terminal 1 will further improve the passenger experience at Abu DhabiInternational Airport.”

INTERNATIONAL. The latest edition of the United Nations World Tourism Organization (UNWTO) annualreport on tourism, published this week, is highlighted by China’s emergence as the world’s third-biggest tourism spender– a critical indicator for the travel retail channel. France maintained its position as the number one tourism destination.

UNWTO’s overview of international tourism in 2010 includes key trends, the ranking of the world’s top tourismdestinations and an overview of international tourist arrivals and tourism receipts for all world regions. It also coversoutbound tourism and lists the world’s biggest tourism spenders.

The overall export income generated by inbound tourism, including passenger transport, exceeded US$1 trillion in2010, or close to US$3 billion a day. Tourism exports account for as much as 30% of the world’s exports of commercialservices and 6% of overall exports of goods and services.

Globally, as an export category, tourism ranks fourth after fuels, chemicals and automotive products, UNWTO said.“For many developing countries it is one of the main sources of foreign exchange income and the number one exportcategory, creating much needed employment and opportunities for development.”

World tourism recovered more strongly than expected in 2010 from the shock it suffered in late 2008 and 2009 as aresult of the global financial crisis and economic recession, UNWTO said. Worldwide international tourist arrivalsreached 940 million in 2010, up +6.6% over the previous year.

The vast majority of destinations reported positive and often double-digit increases, sufficient to offset losses or bringthem close to this target. Recovery came at different speeds – much faster in most emerging economies (+8%) andslower in most advanced ones (+5%).

THE MOODIE REPORT 7 DAYS TRAVEL & TOURISM NEWS

International tourism’s top spenders 2010

International tourism Local currencies Market Population Expenditureexpenditure (US$ billion) change (%) share (%) 2010 per capita

Rank 2009 2010 2009/2008 2010/2009 2010 (million) (US$)

World 851 919 100% 6,879 1341 Germany 81.2 77.7 –5.9% +0.7% 8.5% 82 9522 United States 74.1 75.5 –7.9% +1.9% 8.2% 310 2443 China 43.7 54.9 *+20.9% *+25.6% 6.0% 1,341 414 United Kingdom 50.1 48.6 –13.6% –2.4% 5.3% 62 7805 France 38.5 39.4 –1.9% +7.6% 4.3% 63 6256 Canada 24.2 29.5 –4.8% +10.0% 3.2% 34 8667 Japan 25.1 27.9 –18.4% +4.0% 3.0% 127 2198 Italy 27.9 27.1 –4.3% +2.0% 2.9% 60 4499 Russian Federation 20.9 26.5 *–12.1% *+26.8% 2.9% 140 18910 Australia 17.6 22.5 2.5% +9.0% 2.5% 22 1,014

* Percentage derived from series in US$ instead of local currency Source: UNWTO. Data collected June 2011

Thursday 30 June 2011The Moodie Report 7 Days

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Asia and the Pacific (+13%)was the first region to recoverand among the strongestgrowing regions in 2010.Africa maintained growth(+7%) and the Middle Eastreturned to double digitgrowth (+14%). While theAmericas rebounded (+6%)from the decline in 2009,Europe’s (+3%) recovery wasslower than in other regions.

For full coverage of theUNWTO annual report ontourism go towww.TheMoodieReport.com

JAPAN. Package tour reservations for the summer holiday season are improving over a month ago, according to anew report from Travel Journal International (TJI) Online.

“Depending on tour brands, activities are happening, reflecting a turnaround of consumer sentiment after postponedtravel plans following the massive disasters in March,” TJI said.

According to Travel Journal’s monthly booking survey polling eight major tour wholesalers during the June 9–16 period,booking activities for June and July departure tours at two companies and August departure tours at three posted year-on-year gains. This indicates signs of recovery in demand for both family and corporate travel, TJI commented.

Mach/Best Tour said full-scale tour orders are coming in belatedly, with booking levels in the last couple of weeks up by+10–20% year-on-year. Other wholesalers that summer-bonus and last-minute demand will spur bookings.

By destination, demand for long-haul locations such as North America, Europe and Australia has been sluggish. Butshort haul is a different story and booking activities at four wholesalers for July departure tours and at three for Augusttours showed year-on-year gains.

With the growing popularity for Thailand, Holiday/Clicky saidbooking activities for Phuket are active, while other brands saidconsumers are rushing to beach destinations rather than cities.

Of six wholesalers dealing with Hawaii, booking activities at fivewholesalers for July departure tours and three for August exceeded thelevels of a year ago. Many brands said they expect more last-minutedemand for Micronesia, including Guam and the Marianas.

“Demand for Chinese destinations continues to be lacklustre duemainly to the rebound effect from a year ago when tour productsfeaturing the 2010 Shanghai Expo China sold well,” TJI said.

Editor’s note: The Moodie Report works closely with TJI Online, thelargest English-language travel trade news source in Japan. Week in,week out, it provides timely and sharp analysis of the all-importantJapanese travel market – international and domestic. To subscribeplease visit https://tji.tjnet.co.jp. It comes with our highestrecommendation.

SOUTH KOREA. Japanese arrivals to South Korea, so criticalto the latter’s tourism and travel retail sectors, held up well in Maydespite the impact of the March earthquake and tsunami andsubsequent nuclear crisis.

International tourism arrivals by region (millions) 2010

Base Average annualyear Forecasts growth rate (%) Share (%)1995 2010 2020 1995–2020 1995 2020

Total 565 1,006 1,561 +4.1% 100% 100%Africa 20 47 77 +5.5% 3.6% 5.0%Americas 109 190 282 +3.9% 19.3% 18.1%East Asia/Pacific 81 195 397 +6.5% 14.4% 25.4%Europe 338 527 717 +3.0% 59.8% 45.9%Middle East 12 36 69 +7.1% 2.2% 4.4%South Asia 4 11 19 +6.2% 0.7% 1.2%Intraregional1 464 791 1,183 +3.8% 82.1% 75.8%Long-haul2 101 216 378 +5.4% 17.9% 24.2%

1 Intraregional includes arrivals where country of origin is not specifíed.2 Long-haul is defined as everything except intraregional travel. Source: UNWTO

THE MOODIE REPORT 7 DAYS PEOPLE NEWS, JOBS, EVENTS & NOTICES

Thursday 30 June 2011The Moodie Report 7 Days

AMERICAS. Diageo GTME has named Sandra Vaucher, previously Regional Marketing Director for GTMEAmericas, as Customer Team Director. In her new role (which began on 1 June) Vaucher is responsible for the cruiseand inflight channels and will continue to be pivotal to Diageo GTME’s growth in the region.

UK. London Heathrow Airport has announced the appointment of Muriel Zingraff-Shariff as its new RetailConcessions Director. Taking up her new post in July, she will be responsible for developing Heathrow’s retail businessand will oversee the retail concessions team.

Zingraff ’s previous roles include senior positions at Harrods, where she was the Board Director responsible for women’sfashion, shoes, accessories and cosmetics; Paco Rabanne, where she was CEO; and also Jimmy Choo and La Quinta.Most recently she has been working in the luxury goods sector with 3i and Oaktree Capital.

BAA Commercial Director John Holland Kaye said: “Retail revenues are hugely important to Heathrow and help keeplanding charges down. We are delighted to have Muriel onboard. Her retail experience both here in the UK and abroadwill not only strengthen the retail team but will also ensure our offering has direct relevance and appeal to the 68million passengers that pass through Heathrow each year.”

Thank you for your readership and support of The Moodie Report.

Martin Moodie, Founder and Chairman

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The latest Korea Tourism Organization figures show that 234,626 Japanese arrived in South Korea in May, down just -2.9% year-on-year. In April the drop was -7.9%, and in the disaster month of March it was -12.3%.

Japanese visitors accounted for 31.6% of Korean arrivals in May, and 32.3% over the first five months, a period in whichJapanese arrivals fell -7.0% to 1,140,742. As any South Korean travel retailer will confirm, though, an equally importantstory is the rising importance of Mainland China visitors. They are now the second-biggest visitor group to SouthKorea, representing 21% of the total in May, compared to just 16% in May 2007.

Chinese arrivals fell by -1.1% year-on-year in May to 152,347, but for the first five months of 2011 they increased by +9.7%. The number of departing Koreans fell by -0.9% to 1,014,409 in May. For the first five months departingnumbers were up by +3.5% to 5,110,225.

Arrivals to Korea by purpose and nationality May 2011 – top five countries

Nationality Tour Business Official �Others Total SPPY* Growth Share

Japan 229,017 1,614 58 3,663 234,626 241,695 –2.9% 31.6%China 85,668 9,336 312 53,038 152,347 154,066 –1.1% 20.5%Taiwan 27,611 93 1 852 28,601 33,326 –14.2% 3.8%Thailand 20,690 50 9 5,326 26,093 20,783 +25.5% 3.5%Hong Kong 18,603 52 0 722 19,389 16,384 +18.3% 2.6%

*Same period previous year Source: Korea Tourism Organization