The Year of the Dragon has started with a welcome roar for the Asia Pacific travel retail market, much to the relief of a wider travel retail business traditionally reliant on the region for much of its revenue. A flurry of positive retailer sales announcements, store openings, major spirit launches and high-profile promotional activations in the first month of the year augur well for a meaningful regional recovery during the rest of 2024.

It bears repeating that 2023 was a major disappointment for the Asia Pacific travel retail sector. In January last year, China finally reopened its borders for travel after three years of Covid-related restrictions and many analysts predicted an immediate surge in travel.

However, a lack of flights, sky-high ticket prices, China’s flagging economy and problems obtaining visas were all factors that contributed to a lacklustre year for outbound international travel.

By December 2023, China’s international seat capacity totalled just 62% of pre-pandemic levels, according to aviation analyst firm OAG. Yet things are moving in the right direction. For many international destinations, such as Dubai, Chinese arrivals are now close to 100% of pre-Covid levels. Travel firms are reporting a high interest among Chinese travellers in popular holiday spots such as Singapore, Thailand and Malaysia, several of which have waived or plan to waive visa requirements for Chinese arrivals.

This news should encourage the big drinks multinationals which continue to invest heavily in the Asia Pacific travel retail sector. For instance, in December last year, Moët Hennessy Travel Retail opened a new Les Caves de Champagne outlet at Taiwan Taoyuan International Airport in partnership with Taiwanese duty free retailer Ever Rich. The store showcases high-end cuvées from the likes of Armand de Brignac, Dom Pérignon, Veuve Clicquot and Moët & Chandon.

Travellers can take part in in-store tasting sessions for each of the cuvées on sale and there is also a personalised bottle-engraving service for customers purchasing bottles of Dom Pérignon. For Moët Hennessy Travel Retail to open such a high-end airport store in a relatively undeveloped Champagne market such as Taiwan is a big vote of faith by the French multinational in the wider Asian travel retail market.

Exclusive releases

Scotch whisky distillers have also been busy, unveiling a welter of travel retail-exclusive Year of the Dragon releases at the start of 2024. For instance, Beam Suntory launched Lunar New Year releases for both its Auchentoshan and Bowmore single malts. Priced at $159.50, the 18-Year-Old Bowmore Lunar New Year 2024 Edition is matured in oloroso and Pedro Ximénez sherry casks and features a packaging design by Chinese visual artist Kenn Lam.

The 2024 Lunar New Year release from the Glasgow-based Auchentoshan distillery is Auchentoshan Dark Oak, a triple-distilled 43% abv malt aged in bourbon, oloroso and Pedro Ximénez sherry casks. With a recommended price of $66, Auchentoshan Dark Oak features a brightly coloured presentation box designed by Aeropalmics, a Singaporean artist who has worked with Louis Vuitton, Nike and the trendy American burger chain Shake Shack. The pack design features images of clouds, wintersweet flowers, pine trees and fireworks, which are cleverly combined to create a single Auchentoshan dragon.

Auchentoshan Dark Oak Lunar New Year 2024 Edition has gone on sale exclusively with duty free retailers in Singapore, Taiwan, Thailand, Malaysia and South Korea, while the Bowmore Lunar New Year Edition is available in the Chinese, Malaysian, South Korean, Thai, Singaporean and Macau travel retail markets.

While outbound Chinese travel struggled to recover in 2023, domestic tourism in China rebounded sharply. Tourism revenue and the number of trips are forecast to have reached over 90% of pre-pandemic levels last year, according to Chinese Ministry of Culture & Tourism figures. This strong performance is reflected in the annual results of the state-owned China Tourism Group Duty Free Corporation, the world’s largest travel retailer with more than 200 stores in 30 Chinese provinces, as well as in other Southeast Asian countries. The company posted a 33.52% year-on-year increase in net profits for 2023 to CNY6.71bn ($944.8m).

Hainan, China’s island province and top domestic duty free shopping location, also finished 2023 in fine fashion. Overall annual sales jumped over 25% to CNY43.76bn ($6.13bn), according to statistics from the island’s Customs office. Thanks in part to new customer pick-up services and vigorous offline and online promotional activity by the island’s duty free retailers, 51.3 million items of duty free shopping were sold during 2023, an increase of nearly 4% on the previous year.

Rounding off the positive news from China, Adora Cruises launched China’s first large-scale cruise ship made in China, the Adora Magic City, last month. The 5,246- capacity cruise ship’s maiden voyage was a six-night cruise, departing from Shanghai and visiting Jeju Island in South Korea, and Fukuoka and Nagasaki in Japan.

The new ship features an impressive 1,200sq m Magic City Shopping Centre operated by China Duty Free Group.

Among the 30 product categories sold onboard are both domestic and international wines and spirits, including popular brands such as Rémy Martin cognac and Moutai baijiu.

The Americas and Europe have, of course, long dominated the cruise sector, but Asia’s nascent cruise business, temporarily drydocked by the Covid pandemic, looks set to grow strongly in 2024 and beyond.