The Latin Promise
The Zeinal family has a proud record in the travel retail industry. How do you respect the traditions of the family while operating in today’s market?
We are very proud to have received for two consecutive years the Raven Fox Travel Retail Excellence awards for ferry boats in the Americas. Last year my father was presented with the lifetime achievement award at the Asutil conference in Santiago. My sister and I, who are the main directors of the business now, feel proud to be well-regarded by the industry, and to be continuing a strong tradition.
How did Zeinal Hermanos perform in 2006 and how are conditions so far this year?
We’ve had a steady February, which is difficult to have normally. The pattern is usually for December and January to be the high season, so the trend for this year is very encouraging. We had a great consolidation year in 2006. I would sum it up in three expressions – hard work, a good job, and 30% up on 2005. We’ve had top quality passengers coming on the ferries, and a lot of passengers as well.
I imagine Argentina’s economic revival will be helping boost numbers… and spending?
Argentineans are certainly in the majority, ahead of Uruguayans, but that profile changes from season to season. Here in Uruguay we are also going through excellent conditions. Overall there were 2 million
passengers on the River Plate crossings between Buenos Aires and Montevideo; on the ships to
Colonia we had 8,000 passengers daily. About 30% of passengers are not of either Uruguayan or Argentinean nationalities, and of that 30% you’d be surprised how many Europeans are coming. In February it’s as if you don’t get to speak Spanish on the ships, particularly on the Buenos Aires to Colonia ferries, where there are a lot of tourists taking their bikes for eco-historic tourism. They come from all over Europe, and also from the Middle East.
How are you competing with air links between Uruguay and Argentina?
We feel we have a different type of passenger than the ones who take planes, and we offer a good comfortable option to business passengers. It’s a question of the quality of travelling – going from one port to the other is more convenient than having to travel by cab or car from the city to the airport.
Which categories are performing best on the ferries and how are you targeting these?
In fact our target is broadly the general public, although we do create specific target-oriented commercial opportunities. Cosmetics remain as the preferred category, followed by fragrances.
Do you see a market for cruise ship supplies or stores, considering that cruise ship business is growing fast and serving ports in Mercosur?
Yes indeed, we expect Buquebus [the River Plate ferry company] to get approval for operating a cruise ship terminal in either the port of Montevideo or in Punta del Este. We had more than 180 cruise ships coming into port during the season.
There is opportunity. Cruise ship passengers form a very interesting consumer group, one that could be better served than they are at present. Currently the port doesn’t have the infrastructure to serve the numbers coming from the cruise ships, and measures to improve need to be taken.
What are the major objectives and forecasts for Zeinal Hermanos in 2007?
We will continue to improve and to provide better service to our clients. In the course of the year we will enlarge, refurbish or make changes to the layout of all of our stores.
Turning to your role as president of Asutil [Asociación Sudamericana de Tiendas Libres], how do you view conditions for South America’s travel retail market in the past year, and how is 2007 going
so far?
The industry is going great in South America, and we’re expecting 20% annual growth in the region. South America has a lot to offer – a safe destination, limited exposure to natural disasters, for example – although there is a different situation in the different countries. Brazil represents a major opportunity; it is going to grow massively in the next five years. Compared to rates of
return in other areas, there is a lot to offer here.
Changes in security since the terrorist threat using liquids last August have brought major changes to our industry. How will Asutil seek to manage controls on liquids across its member nations?
Although Zeinal Hermanos itself is not confronted with this problem, I feel personally committed and fully engaged in the battle to clear the controls on liquids in the EU in any place. Asutil is working closely with the governments to address this problem. Uruguay was the first one to contact the Brussels authorities to make them aware of our situation, and to encourage them to clear the transfer of merchandise sold in South America to airline passengers transferring in EU airports.
Another important measure is for responsible operators to instill confidence in the system. Bringing in scanner machines and controls on packaging to clear the transit of those merchandises will help. But we must recognize that there is also a lobby from other areas, like local market retailers, who benefit from the EU regulations, so it will be a hard job and a long job to make change.
What other activities and initiatives is Asutil undertaking this year – and what are plans for the 2007 conference?
The biggest challenge is still to create a safe environment for sale of liquids and gels, which means making the airport authorities in the EU or any other place that might impose a restraint realise that we can sell liquids without infringement to EU or US laws.
We’re looking to Peru to be the next Asutil conference location. We are still reviewing the infrastructure for the conference in Lima, and preparing the trips and extra-curricular activities to interesting local destinations.
Finally, as president of Asutil, how confident are you for the future of travel retail in South America?
I think there is great potential. A lot of new business opportunities exist for operators, and plenty of places are looking to develop know-how and infrastructure in travel retail infrastructure. A country like Colombia offers a lot of scope for development. Our future is bright.
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