PAYING DIVIDENDS

Dubai 2018 | TOURISM | INTERVIEW

TBY talks to Colm McLoughlin, Executive Vice Chairman & CEO of Dubai Duty Free (DDF), on recent accomplishments, sports sponsorship, and the impact of e-commerce.

Colm McLoughlin
BIOGRAPHY
Colm McLoughlin began his retailing career in the 1960s, working at Woolworths, before moving back to Ireland to work for Shannon Duty Free. In 1983, he was invited by the government of Dubai to set up DDF. Following the successful opening of DDF in 1983, he was asked to remain as General Manager. He later became the Managing Director of DDF. In July 2011, he was named Executive Vice Chairman & CEO of DDF and its subsidiary businesses, which include The Irish Village, The Century Village and the Dubai Duty Free Tennis Stadium, home to the Dubai Duty Free Tennis Championships.

What have been the main accomplishments and milestones for DDF in the past year?

2017 was the highest-selling year in our history, with sales amounting to USD1.93 billion. We sold 73 million pieces of merchandise, with 27 million transactions on our registers. Our penetration rate is the highest in the world, and our sales per capita is near the top of global rankings as well. In 2016, we opened Concourse D, which handles all the airlines that go through Dubai International Airport other than Emirates Airlines. Concourse D accounts for about 20% of our business; it is an attractive area, enticing passengers to come there. We are budgeting higher than 2017 for 2018; our first quarter sales reached over USD523 million, representing an 11% increase over the same period last year. Concourse C is being refurbished at the moment, and we will open new outlets there, with half already completed and the remainder to be done throughout 2018. At Al Maktoum International Airport, we have increased our retail space from 2,500sqm to 4,500sqm. Some new airlines, including Azur Air from Russia, fly there, and we are optimistic about the coming year.

How do you assess the importance of your marketing campaigns and sports sponsorships?

Our campaigns are unique and give us exposure in different ways. We do not just organize tennis just for tennis fans but as a promotion for DDF, and we assess the value of it. Our tennis tournaments in 2017 were valued at USD920 million in media coverage to Dubai. We spend 2.5% of our top line on advertising, marketing, and promoting DDF, which is considerably more than what any other duty free spends, and it pays dividends. Several years ago Dubai Airport won an award, and the customers who voted for Dubai were surveyed on why they voted for Dubai Airport. 90% responded that it was because of DDF. It is important to market our services and sponsor events locally. For every event that is held in Dubai, people fly in and fly out and they pass by DDF, so we are a big supporter of many events in Dubai. In addition to tennis tournaments, we have been a partner and sponsor of the Omega Dubai Desert Classic Golf since it started 26 years ago; we support the Dubai Duty Free Irish Derby in Ireland and have been sponsoring horse racing in Newbury in the UK for the past 22 years. We also sponsor the DDF Shergar Cup in Ascot every year; this is all about tapping into different markets. Three years ago we took on the title sponsorship of the Dubai Duty Free Irish Open Golf. This event is huge in Ireland, and the value that the European Tour gave us in 2017 was USD161 million in media coverage.

How do you see the impact of e-commerce on the retail sector, and what opportunities and challenges does it entail for DDF?

E-commerce is necessary, though it does not significantly affect travel. It is a special treat for many passengers to go through a retail area at the airport and buy at great value. Still, we have to be aware of e-commerce, and we set up a click-and-collect operation in DDF two years ago. In 2017, our sales were USD19 million, and it is uncertain if these sales are on top of regular sales or merely a replacement. It is a service that we provide that will always be small in comparison to our total business. The main feature will remain people shopping personally at the airport buying gifts at great value.