As Covid-19 restrictions loosen and people begin to travel more, Imperial Brands said on Tuesday that sales of cigarettes in duty-free stores at airports and in key European holiday spots are beginning to rebound.
Early in the epidemic, when travel was restricted, tobacco, alcohol, and luxury goods manufacturers were affected severely, losing a significant portion of their sales.
Travel recovery remained “impossible to anticipate owing to varied COVID-19 limitations across Europe,” Imperial noted in its annual report for 2021. Months later, the producer of Winston cigarettes and Backwoods cigars said that the market had recovered.
“As cross-border travel begins, our worldwide duty-free business and travel retail sales in the vacation regions of Southern Europe have begun to rebound,” the firm said, adding that a similar recovery has occurred in the Middle East.
Prior to the epidemic, duty-free sales contributed for only 2% of global revenue, according to the report. It announced earlier on Tuesday that it was on course to fulfill its 2022 targets, thanks to robust ecigarette and heated tobacco sales in Europe, which sent its stock to a two-year high.
In April, Philip Morris International, a major tobacco industry rival, noted that increasing travel boosted volume growth in Spain and duty-free retailers throughout the world.
The revival of airport stores benefits other businesses as well.
Travel retail climbed by 50.2 percent this month, according to Campari, while beauty product producers L’Oreal and Estee Lauder also reported a robust resurgence in some areas.
“We are witnessing a really robust comeback, plus 18 percent, at the beginning of the year, with air traffic gradually restarting,” L’Oreal CEO Nicolas Hieronimus said on an annual general meeting call in April.
To be sure, with China’s restrictions still in place, Estee Lauder said that “a steep decrease in Chinese travel in March” slowed travel retail sales throughout Asia.