Keep talking
Maintaining constant dialogue between retailers, suppliers and landlords is essential to the continued success of travel-retail in the Middle East, MEDFA president Anthony Chalhoub (pictured left) tells David Davies
Given the absolute centrality of MEDFA (Middle East Duty Free Association, a non-profitable organisation) to the modern travel-retail landscape, it is hard to believe that the organisation was formed as recently as May 2001. Established to encourage the further development of the industry across the Middle East, MEDFA has grown from a starting membership of 10 retailers to a current total of 28, with more expected to join in the near-future.
From day one, facilitating relationships between travel retail’s various stakeholders – retailers, landlords, suppliers, airlines, etc – has been at the heart of MEDFA’s ‘mission’. Through its annual conference, regular seminars and training events, it has underlined the need to keep all channels of communication open, at all times.
Eight years on from MEDFA’s creation, this remains one of the key priorities. “It is possible to bring another value to the industry and achieve so many things by discussing the issues with each other,” says Chalhoub Group joint CEO Anthony Chalhoub, who was recently re-elected to the role of MEDFA president for another two-year term. “Constant dialogue is so important; you have to keep talking.”
New challenges
Indeed, it may be more important now than at any time in the recent past that the lines of communication do remain open given the scale of the challenges facing the Middle Eastern travel-retail business. Sales in many locations are remaining buoyant, but it would be fair to say that passenger numbers (business and leisure), penetration levels and average spend are under pressure. Every journey and purchase along the way has to count, and this challenges stakeholders to readdress their strategies and make doubly sure that they are offering travellers an attractive retail mix.
“The main challenge now is to try to understand the profiles of customers and their new spending habits,” says Chalhoub, who as a leading player in the Chalhoub Group has many decades of experience in the retail, distribution and marketing of luxury goods. “Spending habits changed in 2008 and already, in mid-2009, they are changing again. We also need to continue to adapt to the new rules and restrictions affecting the industry.”
No one knows quite when the current economic downturn might lift, and Chalhoub certainly isn’t claiming any particular insights. “If I did know, I would go to the stock market and start buying a lot of things!” he laughs. However, he suspects that it might be possible to gain a clearer impression of the industry’s future prospects “after the summer”.
Supporting role
Whatever the short- to mid-term future, MEDFA will be there to encourage dialogue between retail members and their brand suppliers, and to support initiatives intended to further develop the regional business. “Be it business or tourism, we are there to support the whole industry,” confirms Chalhoub.
In many ways, the annual conference remains the cornerstone of the organisation’s activities, providing the opportunity for regional representatives to discuss pressing issues and gain insight from a roll-call of distinguished speakers. “We need to have high quality speakers,” says Chalhoub. “It would be out of the question to cut costs on speakers. People are worried and we need to give them some answers to the questions they are asking themselves.” MEDFA is also working to reduce accommodation expenses and provide more affordable packages in an effort to encourage more delegates to attend the conference, which attracted approximately 400 visitors in 2008.
At the time of writing in late May, the programme for the 2009 conference – scheduled to take place in Dubai on November 23/24 – has yet to be finalised, although Chalhoub says that details are likely to emerge in the wake of a board meeting on June 22.
Staying positive
Remaining engaged with members’ interests and concerns is essential to the continued relevance of any trade body. Accordingly, MEDFA renews its presidency and board every two years.
“MEDFA will evolve with the situation [in the industry], and the best way to do this is to be open to all kinds of ideas,” says Chalhoub, adding that there are currently no plans to add suppliers to MEDFA’s ranks.
As the head of an organisation that has done so much to encourage the further growth of the Middle Eastern travel-retail business, Chalhoub is well-placed to chart the current state of the market. And, while acknowledging the possibility of difficult days ahead, he clearly sees no cause for despondency. After all, as he says, “the situation is not as difficult as in the US or the UK. We have had busy airports in April, and people are still spending money. So, yes, there is plenty of reason to remain positive.”
MEDFA Fact File
Established: May 2001
Number of members at origination: 10
Number of members as of May 2009: 28
Newest member: Saudia Duty Free
President: Anthony Chalhoub (re-elected April 2009)
Current MEDFA board (elected April 2009): Tarek Hamila (Hamila Duty Free), John Sime (Emirates Airline), Olivier Charriaud (Tax Free World Association), Anthony Chalhoub (Chalhoub Group), Sean Staunton (Dubai Duty Free), John Sutcliffe (Aer Rianta International Middle East), Kamal Toulan (International Duty Free Trading & Agencies Ltd), Sherif Toulan (International Duty Free Trading & Agencies Ltd), Erik Van Der Veen (Dufry Sharjah), Pedro Badanelli (Aldeasa Jordan) and Dan Cappell (Abu Dhabi Airports Company).
Next MEDFA conference: November 23/24, 2009.
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