HONG KONG, CHINA. The Asia Pacific Travel Retail Association (APTRA) yesterday hosted a packed and highly stimulating North Asia Forum, in a compelling combination of afternoon forum and evening networking programme.
The event, held at the Hopewell Hotel in Wan Chai, saw airports, retailers, brands and research specialists examine changing consumer behaviour across North Asia and the implications for travel retail.
A series of standalone presentations and panel discussions focused on category mix, traveller engagement and the role of airport space in encouraging discovery and spending.
Arguably the event highlight was a superbly engaging and forward-thinking presentation from Airport Authority Hong Kong (AAHK) General Manager, Retail & Advertising Esther Lui headlined ‘Gateway to Growth: Retail at Hong Kong International Airport and the new Terminal 2’. We will bring you a further report on the APTRA North Asia Forum but here we focus on the top-class AAHK presentation.
As reported on location by The Moodie Davitt Report, the spectacularly revamped T2 opened in May to facilitate check-in for several airlines.
Once checked-in, passengers currently clear immigration and security in T2 before taking the internal Automated People Mover to T1 for their flights. That will all change in 2027, when T2’s gates open for flight departures.
Lui began by outlining the hugely ambitious Trunk-Branch Connectivity, Whole-Network Linkage facilitated transit service which officially launched at Hong Kong International Airport (HKIA) on 3 November.
This is part of a national aviation programme to deeply integrate Hong Kong into China’s overall aviation architecture, transforming the city from a ‘super-connector’ into a crucial dual-circulation hub, she explained.
The services offers seamless one-stop transit: passengers transferring between different airlines enjoy a unified itinerary, including a single ticket, one-time check-in and through-checked baggage to the final destination. Importantly, there is no need to reclaim and recheck luggage at HKIA.
A two-way international network means Mainland passengers can fly out to global destinations via Hong Kong, while overseas travellers can use reciprocal arrangements to connect to Mainland cities.
The initial phase sees over 100 cross-airline combinations, rolling out in phases. The Hangzhou connection under the ‘Hangzhou-Hong Kong Global Link’ scheme streamlines travel from eastern China.
Similarly, the Wuhan connection (‘Wuhan-Hong Kong Global Link’) scheme links central China’s high-speed rail and aviation networks directly with Hong Kong’s international routes.
Transit passengers have recovered to pre-COVID levels and account for around 30% of all HKIA passengers, Lui said.
That is why Airport Authority Hong Kong is currently planning (and has tendered) a transit hotel in Terminal 2. The launch of Trunk-Branch Connectivity, Whole-Network Linkage is expected to further boost transit passengers. Up to 70% of transit passengers have a dwell time within seven hours at the airport.
“HKIA is not lacking customers, but lacking customers who spend,” Lui said. “We are on the right track to recover total passengers to pre-COVID levels: we had 72 million passengers pre-COVID, 65 million passengers annually now.”
AAHK is driving a travel retail transformation: from brick-and-mortar to experiential shops. “Our goal at the core is to maximise licensees’ business.”
That goal will be achieved through a combination of initiatives, she explained. These include:
1) A duty free ‘breakthrough’ involving new duty-free retailers (as reported, the T1 anchor concessions of liquor & tobacco and perfumes & cosmetics are currently out to tender).
2) New retail formats: e.g. virtual retail, mobile carts.
3) Free delivery service 2.0: Involving a lower minimum spend for free local and worldwide shipping.
4) Retail shops not limited to the lease boundary: e.g. spill-out areas and creative 3D shop fronts will be allowed.
5) 5) O2O: e.g. e-shop in the HKIA app.
“I would like to share our ambition to transform HKIA and especially the new Terminal 2 from a place passengers travel through, into a destination they actually want to experience,” Lui continued. “Because we believe the airport of tomorrow should be much more than an efficient transport hub.
“It should be a place to discover. A place to shop. A place to eat. A place to play. And perhaps most importantly, a place where the holiday experience begins.”
“I would like to share our ambition to transform HKIA and especially the new Terminal 2 from a place passengers travel through, into a destination they actually want to experience,” Lui continued. “Because we believe the airport of tomorrow should be much more than an efficient transport hub.
The airport, she noted, should be a place to discover. A place to shop. A place to eat. A place to play. And perhaps most importantly, a place where the holiday experience begins.
Lui said there is a “misperception” that HKIA goods are pricey. Within three years since the COVID crisis ended, she pointed out that AAHK has broadened the choices for toys, food, coffee and souvenirs (each column on the image below compares past shops with today’s equivalents.
New offers include:
Food: Jollibee, Tam Jai, Milk Café, McDonald’s x3, Lin Heung.
Coffee: Fine Print, Urban, Blue Bottle, % Arabica, Starbucks.
Souvenirs: Kee Wah, Hang Heung.
“What if passengers looked forward to coming to the airport early?” asked Lui as she moved on to changing consumer behaviour and expectations of the airport experience.
“What excites me most is who these passengers are, and what they expect from us,” she said.
“More than 60% of future Terminal 2 passengers are expected to be under 40. This has fundamentally influenced the way we are approaching our commercial planning. These passengers are looking for more than convenience.
“They want experiences. They want something authentic, something social, something shareable, and something memorable.
“So when we started curating Terminal 2, we asked ourselves a very simple question: What if passengers no longer regarded their time at the airport simply as waiting time?
“What if instead, they looked forward to coming earlier because there were things they genuinely wanted to experience?
“That thinking has shaped our vision for Terminal 2.”
Lui then outlined how AAHK’s ambition is to turn dwell time into experience time.
“Terminal 2 is being curated around a much broader mix of shopping, dining, entertainment and lifestyle experiences,” she explained.
“Across Terminal 2, we are planning approximately 150 retail and dining outlets, offering passengers a broad range of choices.
“But for us, success is not simply about the number of shops. It is about the quality, relevance and diversity of the experience.”
In retail, alongside the key travel retail categories such as beauty, liquor and tobacco, AAHK sees opportunities for fashion, athleisure, toys, technology and gadgets, wellness and other lifestyle concepts.
“Our own T2 planning materials deliberately position these categories alongside art and entertainment, rather than treating retail as a standalone activity,” she observed.
AAHK is creating an array of exciting spaces that allow brands to think differently, Lui said.
At the Terminal 2 Concourse, for example, 12 shops will feature duplex façades, offering brands a much stronger architectural presence.
“Stores will benefit from visibility, generous spatial flexibility and opportunities to create something more immersive than a conventional airport shop. For the brands in the audience today, I think this point is important,” she emphasised.
“We don’t simply want you to bring your existing airport concept to Terminal 2. We want Terminal 2 to become a platform where you can show travellers the next generation of your brand experience.
“Something new. Something experiential. Something that perhaps has never been tried in an airport before.”
The same philosophy, Lui commented, applies to food & beverage.
“Increasingly, passengers do not separate dining from the overall travel experience. Dining can itself become a highlight of the journey,” she said.
“So our ambition goes beyond simply providing places to eat.
“We want a portfolio ranging from convenient grab-and-go offers to global flavours, speciality restaurants and more experiential ‘eatainment’ concepts.”
AAHK’s T2 planning includes ideas around food hubs, speciality restaurants, curated marketplaces, global flavours and distinctive F&B concepts around the main atrium.
Perhaps the biggest shift, however, is entertainment, Lui noted.
“Traditionally, airport commercial planning has centred on two activities: shopping and dining.
“At Terminal 2, we are adding a third pillar: Play.
“Entertainment has been incorporated into our planning from an early stage. Our concepts include dedicated entertainment spaces and boutique theatre spaces that can showcase local and cultural film content, creating another dimension to the passenger journey.
“At the Terminal 2 Concourse atrium, we also have a major event space of approximately 3,000 square metres with ceiling heights reaching 15 metres, creating opportunities for events and large-scale experiences.”
Terminal 2 should not be viewed in isolation, Lui pointed out as it sits within a much bigger transformation of Hong Kong International Airport.
Terminal 2 connects with Terminal 1, SKYTOPIA and neighbouring developments through an extensive transport network.
SKYTOPIA itself is envisioned as a destination bringing together shopping, dining, hospitality, business, art, sport, recreation, water activities and entertainment.
Lui concluded with a series of direct message to the industry stakeholders in the room and around the world.
“To our brand partners: Bring us ideas that you have never tried in an airport.
“To our duty-free and retail partners: Help us rethink what travel retail can become, beyond simply transactions.
“To our F&B partners: Create dining experiences that passengers will remember as part of their visit to Hong Kong.
“And to my fellow airport operators: I believe we have a collective opportunity to redefine passenger expectations of airports around the world.”
“This is our ambition for Terminal 2 – not simply a terminal passengers pass through,” she added.
“It will be a destination they look forward to. A place where shopping, dining, entertainment and hospitality come together. A place where waiting becomes discovering. And a place where the journey begins before the aircraft even leaves the ground.” ✈ 
