Kearney presented its annual report on Travel Retail, one of the highlights of the TAX Free (TFWA) trade show in Cannes, which ends today. The main findings of this study, entitled “Travel retail in the face of geopolitical turmoil,” point to a structural decline in airport spending, despite an increase in air traffic. This decline in consumer appetite reflects the ongoing uncertainty in many parts of the world, particularly in the Middle East and Asia-Pacific, where 30-40% of passengers are traveling to areas exposed to conflict risks.
This is “no longer a simple post-pandemic market distortion.”
For the third consecutive year, traveler spending at airports has fallen, confirming a structural trend. This is a paradoxical phenomenon, given that there have never been so many passengers flying.
Kearney’s annual report highlights the post-COVID recovery in air traffic, which continued in 2024, with total passenger numbers reaching 9.5 billion, an increase of 8.5% compared to 2023 and 3% more than the peak recorded before the pandemic in 2019. Driven by emerging markets, and India in particular, this upward trend is expected to continue, potentially reaching $9.9 billion in 2025 and exceeding $11 billion in 2030.
This new annual study by Kearney was conducted in June 2025 among 3,000 passengers and 40 senior executives in the global travel retail sector.
One in four markets exposed to geopolitical instability
Kearney’s report identifies five global dynamics impacting the travel retail industry: the geopolitical reshaping of the global landscape, macroeconomic fragmentation, consumer polarization, technological disruptions, and the erratic evolution of climate issues. These are very tangible phenomena that have a direct impact on consumer behavior and the strategy of travel retail players.
The most pressing challenge at present is undoubtedly geopolitical instability.
Many destinations are likely to be affected, with 40% of passengers in the Middle East and 30% in the Asia-Pacific region transiting through countries at risk of conflict.
Overall, this means that one in four travel retail markets worldwide (representing more than $18 billion) is located in a geographically unstable area, both economically and politically.
The airspace restrictions linked to the war in Ukraine are a good example. Due to the diversion of air traffic between the east and west, nearly 17 million passengers—and just as many consumers—have been rerouted to alternative itineraries that have taken them away from the main European travel retail destinations, making it impossible to make up for the shortfall in revenue. For example, wealthy consumers from Russia now travel via Asia and the Middle East, resulting in a net loss of nearly $165 million in sales that would normally have been made.
Impact of customs barriers and the new world order
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Featured photo: The Shilla
