As the duty free industry heads to Singapore this month to attend the TFWA Asia Pacific Exhibition (May 10-14), the region appears relatively well placed to weather the shocks of the ongoing conflict in the Middle East. Asia is not immune to higher ticket prices due to soaring jet fuel costs, of course, and intercontinental traffic between Asia and Europe has dropped considerably due to the crisis. Yet Asian hubs have also benefited from additional traffic (and potential duty free shoppers) by partly taking over the roles of Dubai, Abu Dhabi and Doha as vital stopping points for Asia-Europe travellers.

Other regional metrics are also pointing in the right direction. For instance, the Pacific Asia Tourism Association (PATA) forecast that international visitor arrivals in the region are demonstrating a strong “growth momentum”, with numbers expected to grow to between 600-918 million by 2028 driven by economic recovery in many Asian countries, rising travel demand, more visa-free travel and a seamless travel experience due to the increasing role of digital technology such as biometrics and AI.

Similarly, Airports Council International (ACI) has forecast that Asia Paci c will post the strongest traffic growth this year, with annual passenger growth of 4.8% over the next three years, with most regional airport markets set to surpass pre-pandemic levels during 2026. In East Asia, international traffic will grow at a CAGR of 6.6%, led by China’s continued post-pandemic rebound, while India will drive Southern Asia’s growth, adding 100 million domestic passengers by 2028.

Challenging market

It’s not all good news, of course. Chinese traveller spend overseas has still not reached pre-Covid levels despite a rebound in traffic numbers. A more value-conscious wave of Chinese shoppers, discouraged by a relatively weaker currency and domestic economic uncertainty, has been a key factor in the challenging trading climate for duty free retailers in markets like South Korea and Thailand over the past year.

There are also challenges for European and American brands exporting goods to Asia. Due to the continued closure of the linchpin Strait of Hormuz, major shipping lines like Maersk and Hapag-Lloyd are having to reroute around the Cape of Good Hope, adding 14-20 days to standard transit times. The extra cost of this rerouted journey can be anything between $1m and $2m per large container vessel. If the Strait of Hormuz remains closed for a period of months, selective shortages and spotty availability of specific European drinks are highly likely.

In this scenario, supply chain bottlenecks could see Asian travel retailers increasingly turn to regional and national brands to fill their shelves, speeding a trend already underway in markets like India and China where premium domestic brands are starting to gain traction at airports long dominated by international brands. Certainly, the number of Asian brands exhibiting at the TFWA Asia Pacific Exhibition in recent years has been growing – this month, Bangalore-based Indian single-malt pioneer Amrut Distilleries and renowned premium baijiu producer Kweichow Maotaizhen will be among the crop of new exhibitors.

They will join the likes of Indian IMFL giant Tilaknagar Industries. In Singapore, Tilaknagar will showcase House of TI, a collection of premium Indian spirits.

The line-up includes Seven Islands Pure Malt whisky, a blend of Indian and Scottish malt whiskies; Monarch Legacy Edition, a 100% pure grape brandy made with aged Indian and French grape spirits; Samsara, a London Dry-style gin with eco-friendly packaging; Sitara, a small-batch blend of column and pot-distilled rums; and finally, Amara, a pink, fruit-flavoured premium vodka.

Nikka Whisky, one of Japan’s most historic and award-laden whisky producers, will also be at the exhibition, eager to build its regional travel retail footprint outside of its home market despite supply constraints. The company will exhibit its three key whisky brands, Taketsuru Pure Malt, Yoichi Single Malt and Miyagikyo Single Malt, as well as a revamped Grande Series – a range of higher-strength travel retail-exclusive versions of the three flagship brands.

The format of this year’s show is getting a makeover. The exhibition’s previously haphazard floorplan will now feature product category-focused Worlds, including a World of Wines & Spirits zone located in Basement 2. In theory, this will mean drinks buyers can navigate around supplier meetings much more efficiently. The show will also feature a new Taste of the World platform to reflect the growing importance of food and & beverage within the post-Covid airport commercial mix. A gastronomy hub will feature a kitchen theatre, signature bar concepts and live cooking demonstrations. Michelin-starred chef Akira Back and renowned pastry chef Janice Wong will headline the new space.

The TFWA Asia Pacific Conference theme this year is Forward Momentum: Powering the Next Travel Retail Experience, which TFWA explains will “address the collision of geopolitics and digital transformation”. Kishore Mahbubani, a former UN ambassador, will deliver a topical keynote on navigating global trade tensions, while Hyunjin Kim of the leading graduate school INSEAD will explore how AI and data-driven retail are raising the bar for customer engagement. As the industry gathers in Singapore, the Asia Pacific travel retail market undoubtedly faces considerable challenges, but rising living standards in many countries, allied to growing intra-regional tourism and business travel, should ensure that its long-term future is a bright one.