According to research from Verdict Retail, the U.S. will remain the largest duty free market in the Americas by 2020. This growth will be driven by rising international footfall, especially from China, as well as new laws which will allow U.S citizens to be exempt from duty up to USD $800.
Verdict Retail’s report, Duty Free Retailing in the Americas 2015-2020, notes that the US market was worth $3.9 billion in last year and is set to expand by $1.1 billion at a Compound Annual Growth Rate (CAGR) of 5% to reach $5 billion by 2020.
“Duty free retailing has been under-exploited by US airports until recently, but having seen the success of duty free retailing in other regions, US airports operators have realised the revenue benefits of having attractive retail facilities for travellers,” says Maureen Hinton, Global Research director at Verdict Retail. “Major airports such as La Guardia, Pittsburgh International, Dallas, Denver and Los Angeles are investing heavily in expanding and redeveloping their sites, including retail, while major duty free operators such as Dufry, Lagardère Travel Retail, and Gebr. Heinemann expand in the region.”
The report also says that out of the nine major duty-free markets—the US, Brazil, Canada, Mexico, Chile, Peru, Argentina, Colombia, and Venezuela—Canada will grow fastest at a CAGR of 7.6% during the forecast period, reaching USD $554 million by 2020.
“A weak Canadian dollar and government tourism campaigns will attract American visitors, driving duty free sales in the country,” adds Hinton. “Spending will receive a boost from a new law that has extended the duty free allowance for US travellers, which stands first in terms of foreign visitor arrivals.”
