Airports ‘Far Behind’ In Commercial Digital Tech, Says ACI World

While airports have made considerable investments in digital transformation—particularly biometrics—to ensure more seamless journeys, they are “far behind in adopting commercial digital technologies compared with (domestic) retailing and hospitality.”

This is the view of global industry body Airports Council International (ACI) in a new report published this month. The Montreal-based body, which represents more than 2,000 airports, tries to plot a path for airports of all sizes wanting to increase their share of revenue from non-aeronautical sources such as retail, and food and beverage (F&B).

Without investment in commercial digital solutions airport stores risk losing their relevance to consumers, particularly digital natives like Gen Z who expect a continuity of experience from offline to online and vice-versa. “The inconvenient truth is that for most airports, a relatively small percentage of their passengers currently engage with their digital products and services,” states the 81-page report.

Written by a range of experts picked from ACI member gateways and partners, the paper examines nine existing digital frameworks, from platform models like eBay, Uber, and Airbnb; to full e-commerce as pioneered by Amazon and widely adopted across the world by consumer brands, for example Zara, and other marketplaces like Allegro in Poland, and niche disruptors like Duffle in the travel shopping sphere.

“Airports are no different to major brands but many do not yet offer the same level of digital journey consumers expect and experience in their day-to-day lives,” said the report. “The result is that only a relatively small percentage of passengers engage with airport digital offers. Most engagement is direct with the airline. This represents a huge opportunity for airports to drive incremental revenue.”

Aligning on the need for digital

ACI’s report chimes with the findings of a Kearney travel retail study released in October which also suggests the rapid adoption of technology as the top solution for achieving greater sales conversion in airport stores.

Addressing these issues is important. Yesterday, at Aviation-Event 2024 in Sofia, the capital of Bulgaria, ACI Europe’s deputy direct general, Morgan Foulkes, said that in a very unevenly rebounding European market, non-aeronautical revenue has been the key driver in maintaining financially stable gateways post-pandemic.

Foulkes told the audience of industry executives and aviation media: “We finished 2023 with only 43% of European airports having fully recovered their passenger numbers (versus pre-pandemic). Looking at the financials we have moved much closer to pre-Covid with a net positive result of €8 billion and this was mainly driven by non-aeronautical revenue.”

Between 2019 and 2023, non-aeronautical revenue, which includes retail and F&B, grew by 17% whereas the bigger income stream of aeronautical revenue has barely made any gains, growing at just 2% over the period. However, a very challenging operations environment, where inflation, staff shortages, and supply chain disruptions have pushed up costs by 12% in the same time frame.

This means that focusing on enhancing retail and F&B, preferable through a digital tech lens, has become even more important as a way of compensating for the aeronautical business while it returns to some sort of form.