Airport Non-Aeronautical Revenue Market Analysis APAC, North America, Europe, Middle East and Africa, South America - US, Canada, China, Japan, India, Germany - Size and Forecast 2023-2027

Airport Non-Aeronautical Revenue Market Forecast 2023-2027

The airport non-aeronautical revenue market is estimated to grow by USD 35.04 billion at a CAGR (Compound Annual Growth Rate) of 7.88% between 2022 and 2027. 

The market's growth is contingent upon several factors, including the evolution of sophisticated terminals, the increasing transit and transfer passenger traffic, and the implementation of airport loyalty programs. As terminals continue to advance technologically, they enhance passenger experience and streamline operations, driving market expansion. Moreover, the rising volume of transit and transfer passengers contributes to increased demand for airport services and facilities. Additionally, loyalty programs incentivize frequent travelers, fostering customer retention and boosting airport revenues. Together, these factors shape the growth trajectory of the market, reflecting the ongoing evolution and innovation within the aviation industry.

What will the Size of the Market be During the Forecast Period?

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The aviation sector is witnessing a surge in demand for airport operations, driven by various factors such as air cargo services, non-aeronautical offerings, and car rental facilities. With stringent regulations enforced by authorities like the Transportation Security Agency (TSA), airports are enhancing their cargo handling, security, and ground support systems to ensure compliance and passenger safety. Advancements in technology are reshaping passenger experiences, with digitization, contactless payments, and personalized shopping becoming prevalent. Furthermore, the integration of advanced technologies and the provision of premium services, such as pre-ordering meals and luxury retail options, are redefining passenger engagement and satisfaction, shaping the future of aviation.

Market Dynamics and Customer Landscape

Non-aeronautical services play a crucial role in enhancing the overall airport experience for travelers. These services encompass a wide range of offerings, including food services, car rental facilities, banking services, and cargo handling systems. Airports also provide various amenities such as car parking facilities, baggage handling systems, and security measures to ensure passenger satisfaction and safety. With the rise in global air travel demand, airports worldwide are focusing on leisure activities, healthcare services, and virtual shopping experiences to cater to passenger needs. Leading players in the aviation industry are integrating technology and offering contactless payment solutions to provide convenient and memorable experiences for travelers. Additionally, airport retailers and e-commerce platforms offer a diverse range of products, including electronics, souvenirs, and luxury brands, contributing to the overall appeal of the airport environment. The evolving sophisticated airport terminals are notably driving the market growth, although factors such as the effect of airport privatization on concessionary 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 Market Driver 

The evolving sophisticated airport terminals are notably driving the market growth. 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. 

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 terminals, which are propelling the growth of the global market. This, in turn, will fuel the growth of the market during the forecast period. 

Major Market Trend

The progression of airport cities and aerotropolis concepts is a key trend influencing the 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 from mere air transport facilities to multi-functional, commercial business hubs within airport boundaries and beyond. The growth of these cities directly reflects the availability of land for the expansion of 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 market trends during the forecast period. 

Significant Market Challenge

The effect of airport privatization on concessionary prices may impede the market growth.  In the industry, operators, retailers, duty-free shop stakeholders, and other brand suppliers work together to create the ultimate experience that benefits aviation stakeholders. The growing trend toward privatization, however, poses a challenge as the high financial returns to private shareholders result in high non-aeronautical charges, such as high shop rentals. This will not attract new concessionaires users and adversely affect the market.

In many cases, private 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, the International Civil Aviation Organization (ICAO) and International Air Transport Association (IATA) have provided economic 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  Customer Landscape

The market research and growth 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 market research report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Customer Landscape

Who are the Major Airport Non-Aeronautical Revenue Market Companies?  

Companies 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 market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 15 market Companies, including:

• 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.
• Malaysia Airports Holdings Berhad
• Metropolitan Airports Commission
• Oman Airports
• Royal Schiphol Group
• The Port Authority of New York and New Jersey
• Vinci SA

Qualitative and quantitative analysis of Companies 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 Companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize Companies as dominant, leading, strong, tentative, and weak.

Market Segmentation

These services encompass a wide range of offerings, including food services, car rental facilities, electronic stores, souvenir shops, and cafes. Airports also provide advertising spaces for marketing campaigns and promotions to attract passengers and advertisers. Car parking facilities are available to accommodate the increasing passenger footfall, reflecting the demand for airport operations. With the support of organizations like the International Air Transport Association (IATA), airports manage passenger traffic efficiently while handling air cargo operations. The passenger experience is further enriched through amenities such as duty-free shops, luxury goods, dining options, and high-quality entertainment. Leveraging digital advertising technologies, airports create engaging experiences for travelers and advertisers alike. With continuous investments in airport infrastructure, airports evolve into dynamic airport cities, fostering various commercial activities to meet the needs of modern travelers.

By Services

The airport non-aeronautical revenue share growth by the concessionaries 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 non-aeronautical revenue.

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The concessionaries segment shows a gradual increase in the market share of USD 19.12 billion in 2017 and continued to grow by 2021. The increasing digitalization of passenger retail activities and off-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 space requirements for shopping areas but also prevent operators from collecting revenue from the retail sales of concessionaires outside airports. However, operators can aim at first-time travelers, who will continue to be a key revenue-generating target for retailers. In various regions, shopping areas are developing concurrently with airport expansion projects and terminal hub-capacity expansions. Various operators view these new 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 during the forecast period.

Regional Analysis

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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 nonaeronautical 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 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.

Market Analyst Overview

The market is undergoing significant shifts, driven by changing consumer behaviors and evolving preferences. Despite challenges posed by the COVID-19 pandemic and economic downturns, airports are adapting with technology integration and enhanced passenger experiences to stimulate market demand. Pre-pandemic levels are sought through high-quality amenities, entertainment options, and digital advertising technologies that attract advertisers. From luxury goods to dining experiences, airports aim for seamless journeys and personalized experiences, leveraging mobile apps and online shopping platforms. Diversification of revenue sources, including dining sales and advertising revenue, ensures stability in uncertain times marked by geopolitical uncertainty and economic recessions. As tourism rebounds, airports prioritize consumer spending and cost efficiency, ensuring sustained growth and resilience amidst currency fluctuations and geopolitical shifts.

Aviation operations encompass various activities crucial for the smooth functioning of airports and airlines, contributing to aviation-related income derived from passenger numbers and rental services. With the increasing adoption of contactless payment methods and stringent health and safety measures, airports ensure passenger safety and satisfaction, optimizing passenger flow and enhancing the layout of commercial spaces. Passenger involvement is encouraged through personalized dining recommendations and retail experiences provided by retail operators and platforms like the Automotive Service Delivery Platform (SDP). Premium lounges and the integration of technology offer travelers enjoyable and convenient experiences, facilitating the sale of non-aeronautical products and high-quality retail items. However, global uncertainties and geopolitical tensions may impact consumer behavior and discretionary spending, affecting the market share amid a diverse population.

Segment Overview

The market growth analysis 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.

• Service Outlook
  • Concessionaries
  • Parking and car rentals
  • Land rentals
  • Terminal rent by airlines
  • Other services

• Business Outlook
  • Commercial development
  • Advertising

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Argentina
    • Brazil

Market Scope
Report Coverage	Details
Page number	176
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 7.88%
Market growth 2023-2027	USD 35.04 billion
Market structure	Fragmented
YoY growth (%)	7.56
Regional analysis	APAC, North America, Europe, Middle East and Africa, and South America
Performing market contribution	APAC at 29%
Key countries	US, Canada, China, Japan, India, and Germany
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Aena S.M.E. SA, Aeroports de Paris SA, Authority Hong Kong, Authority of India, Airports of Thailand Plc, Brazilian Airport Infrastructure Co., Changi Airport Group Singapore Pte. Ltd., Copenhagen AS, Fraport Group, GMR Infrastructure Ltd., Guangzhou Baiyun International Airport, Heathrow SP Ltd., Japan Airport Terminal Co. Ltd., Korea Corp., Malaysia Holdings Berhad, Metropolitan Airports Commission, Oman, Royal Schiphol Group, The Port Authority of New York and New Jersey, and Vinci SA
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.
Customization purview	If our market forecasting 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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What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period.
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the size of the market and its contribution to the parent market.
• Accurate predictions about upcoming trends and changes in consumer behavior.
• Growth of the market across APAC, North America, Europe, the Middle East and Africa, and South America.
• A thorough analysis of the market’s competitive landscape and detailed information about companies.
• Comprehensive analysis of factors that will challenge the growth of market companies.

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