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The airport non-aeronautical revenue market is estimated to grow at a CAGR of 7.88% between 2022 and 2027. The size of the market is forecasted to increase by USD 35,045.11 million. The growth of the market depends on several factors, including evolving sophisticated airport terminals, the growing transit and transfer passenger traffic, and airport loyalty programs.
This airport non aeronautical revenue market report extensively covers market segmentation by service (concessionaries, parking and car rentals, land rentals, terminal rent by airlines, and other services), business segment (commercial development and advertising), and geography (APAC, North America, Europe, the Middle East and Africa, and South America)It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The evolving sophisticated airport terminals are notably driving the market growth, although factors such as the effect of airport privatization on concessionaries prices may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Airport Non-Aeronautical Revenue Market Driver
The evolving sophisticated airport terminals are notably driving the airport non-aeronautical revenue market growth. Airport operators are modifying terminal spaces into shopping malls, along with artistic and recreational venues to attract passengers and earn non-aeronautical revenues. They are also providing conference rooms to business passengers to reduce their travel time and eliminate their need to travel to cities. For instance, Hong Kong International Airport, which opened in 1998, consists of a 15,000 square feet full-service business center that supports workstations, wireless hotspots, printers, and meeting facilities, along with large-screen TVs and advanced video conferencing systems for around 400 users. The airport also features an all-day buffet along with personal amenities such as barber services, spa-type massages, and manicures provided at lounges. It has 1,171 rooms and is considered to be one of the largest hotels in Hong Kong.
Airport terminal areas are no longer restricted to food courts, magazine shops, and duty-free stores. They also include shopping galleries and streets featuring specialty retail, high-end boutiques, and upscale restaurants, along with entertainment, live music, arts, and cultural attractions. International brands are being complemented with locally-themed products and dining outlets. Trade facilities and custodian-staffed business lounges are emerging in airport terminals, which are propelling the growth of the global airport non-aeronautical revenue market. This, in turn, will fuel the growth of the Airport Non Aeronautical Revenue Market during the forecast period.
Key Airport Non-Aeronautical Revenue Market Trend
The progression of airport cities and aerotropolis concepts is a key trend influencing the airport non-aeronautical revenue market growth. The gradual adoption of airport city strategies and the evolution of aerotropolis (urban economic zones centered around airports) are being recognized worldwide. One of the major instruments supporting this growth attribute is the development of airports from mere air transport facilities to multi-functional, commercial business hubs within airport boundaries and beyond. The growth of these airport cities directly reflects the availability of land for the expansion of airport facilities, and the improvement of surface transportation facilities, making commutation more convenient locally.
Airport cities have developed to such an extent that most commercial functions of a modern metropolitan city, such as shopping malls and restaurants, are found on or near most major airports. The major contributors to this transition have been passenger terminal commercial activities, galleries, and retail outlets. This trend will further fuel the growth of the airport non-aeronautical revenue market during the forecast period.
Key Airport Non-Aeronautical Revenue Market Challenge
The effect of airport privatization on concessionaries prices may impede the airport's non-aeronautical revenue market growth. In the airport industry, airport operators, retailers, duty-free shop stakeholders, and other brand suppliers work together to create the ultimate airport experience that benefits aviation stakeholders. The growing trend toward privatization of airports, however, poses a challenge as the high financial returns to private shareholders results in high non-aeronautical charges, such as high shop rentals. This will not attract new concessionaires and other airport users and adversely affect the global airport non-aeronautical revenue market.
In many cases, private airport operators seek to obtain the maximum margin from their concessionaires without considering a long-term business relationship. This makes it difficult to retain those concessionaires after the contract terminates. For example, in some international airports, the commission rates range up to 45% of total duty-free sales, which creates pressure on the operating margins of duty-free retailers, resulting in high retail prices for passengers. In order to overcome these challenges, International Civil Aviation Organization (ICAO) and International Air Transport Association (IATA) have provided airport economics oversight according to which airport operators should follow single till, dual till, or hybrid till for the derivation of considerable charges. This would also maintain thorough transparency between stakeholders to avoid any unethical activities.
Key Airport Non-Aeronautical Revenue Market Customer Landscape
The report includes the adoption lifecycle of the market, from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Airport Non-Aeronautical Revenue Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product launches, to enhance their presence in the airport non aeronautical revenue.
Korea Airports Corporation: Since 2009, the Gimpo airport in Seoul has outlined an effective plan for enhancing airport functionality, which includes reducing overhead expenses. Operating costs have decreased by around 12% due to these cuts.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The airport non aeronautical revenue share growth by the concessionaire segment will be significant during the forecast period. Airport operators are commercializing airport terminal areas and surroundings with various concessionaires to leverage the increasing passenger traffic as an opportunity to influence passengers' buying ability. These concessionaires pay certain fees to operate their restaurants, bars, and catering services at facilities such as airports, hotels, lounges, duty-free shops, conference rooms, spas, and gyms, which constitute a major portion of the airport's non-aeronautical revenue.
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The concessionaries segment shows a gradual increase in the market share of USD 19,121.58 million in 2017 and continue to grow by 2021. The increasing digitalization of passenger retail activities and off-airport duty-free store sales will affect the shopping dynamics at a few airports, especially for passengers who make planned purchases. This will not only challenge the physical airport space requirements for shopping areas but also prevent airport operators from collecting revenue from the retail sales of concessionaires outside airports. However, airport operators can aim at first-time travelers, who will continue to be a key revenue-generating target for airport retailers. In various regions, airport shopping areas are developing concurrently with airport expansion projects and terminal hub-capacity expansions. Various airport operators view these new airport developments and expansion projects as an opportunity to establish themselves as regional or international hubs. This has led to intense competition among airports, which also boosts the development of non-aeronautical activities, especially in the retail sector in airports during the forecast period.
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APAC is projected to contribute 29% of the market's growth by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the airport non aeronautical revenue during the forecast period. Airport authorities, real estate agents, and other commercial organizations focus on the divergence of airport infrastructure and are trending toward establishing more commercial activities in airports. New airport projects, investments in expanding existing airports, and the development of airport cities are the key areas that are being focused on by public and private entities. The growing demand for air travel has increased the number of airports, which, in turn, will fuel non-aeronautical sources of revenue in the region during the forecast period. Currently, passengers traveling over EMEA are being diverted to APAC for stopovers. This makes APAC an emerging hub for many airlines, where Singapore, India, Hong Kong, China, and Japan are major economies driving the market.
This report forecasts the contribution of all the segments to the growth of the market. In addition, we have included the COVID-19 impact and the recovery strategies for each segment. In 2021, vaccines were introduced in the region, which led to an increase in travel activities; thus, the market resumed gradually. With the control of the spread of the virus, coupled with the removal of lockdown restrictions, the market in focus started to recover in 2021. Due to the pandemic, people's interest in travel increased in 2021 post the ease of restriction. Passengers across the region are now spending more on traveling, which is expected to impact market growth during the forecast period positively.
The airport non aeronautical revenue market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by service, business, and region.
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Airport Non-Aeronautical Revenue Market Scope |
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Report Coverage |
Details |
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Page number |
176 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 7.88% |
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Market growth 2023-2027 |
USD 35045.11 million |
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Market structure |
Fragmented |
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YoY growth (%) |
7.56 |
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Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 29% |
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Key countries |
US, Canada, China, Japan, India, and Germany |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Aena S.M.E. SA, Aeroports de Paris SA, Airport Authority Hong Kong, Airports Authority of India, Airports of Thailand Plc, Brazilian Airport Infrastructure Co., Changi Airport Group Singapore Pte. Ltd., Copenhagen Airports AS, Fraport Group, GMR Infrastructure Ltd., Guangzhou Baiyun International Airport, Heathrow SP Ltd., Japan Airport Terminal Co. Ltd., Korea Airports Corp., Malaysia Airports Holdings Berhad, Metropolitan Airports Commission, Oman Airports, Royal Schiphol Group, The Port Authority of New York and New Jersey, and Vinci SA |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Service
7 Market Segmentation by Business Segment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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