TOKYO -- Hosting tens of thousands of visitors per day, international airports offer a unique setting for retail and entertainment. Asian airports are eager to take advantage as an expanding middle class and the growth of budget carriers add fuel to fire, with the facilities morphing from mere waystations to shopping and leisure destinations in their own right.
In Singapore, Changi Airport's new Jewel commercial complex is a 1.7 billion Singapore dollar ($1.24 billion), 135,700-sq.-meter facility that offers much more than a typical duty-free area. It features, among other things, the world's tallest indoor waterfall and the country's largest maze.
The International Air Transport Association, a trade group, forecasts global air passengers to double to 8.2 billion by 2037. Asia is expected to lead the growth, encouraging airport operators to devote more effort to ancillary businesses.
Asian airports are trying to become more like department stores, focusing on maximizing sales and rental income. Changi Airport Group is leading the way. In the fiscal year ended March, it earned 60% of its revenue from rent and retail operations.
Jewel has 280 tenants and attracts about 300,000 visitors a day. The airport operator hopes keeping the shops and attractions open late will pull in transit passengers. "In Singapore, Changi Airport is a tourist attraction in itself, and Jewel has enhanced that reputation and appeal," Prime Minister Lee Hsien Loong said at the official opening on Oct. 18.
South Korea's Incheon International Airport -- one of the world's most popular, thanks in part to its huge duty-free shopping area and a movie theater -- announced its Vision 2030 project in September. By 2024, the airport plans to add runways and passenger terminals, and it hopes to use artificial intelligence and other advanced technologies to become more efficient.
According to local media reports, Incheon aims to increase its annual passenger volume to more than 100 million per year and double its sales to 5 trillion won ($4.19 billion) by 2030. Incheon wants to become the world's No. 1 facility by airport throughput unit, an index that measures an airport's ability to handle both passengers and freight. Encouraging those passengers that traffic will mean taking steps such as bringing in more popular restaurants and boutiques.
In China, Beijing Daxing International Airport opened in September and started handling international flights in late October. The 80 billion yuan ($11.3 billion) facility has set an annual passenger target of 45 million by 2021. Eventually it wants to raise that number to 100 million. While Beijing Capital International Airport is mostly used by domestic passengers, Daxing Airport plans to focus on international flights.
Hong Kong International Airport plans to open SkyCity, a large complex nearby, in 2021. The airport hopes to become a commercial center, as yearly passenger numbers are expected to hit 100 million by 2030.
Japanese airports are also increasing their nonaviation revenues. Sales from tenants at Japan's Narita Airport hit a record 143.2 billion yen ($1.32 billion) in the fiscal year ended in March. That was a 70% jump from five years earlier and comparable to sales at Isetan Mitsukoshi Holdings' flagship Mitsukoshi Nihombashi department store, one of the oldest in Japan. The airport operator's retail unit now accounts for 42% of total revenue. That is comparable to its aviation business.
Next spring Haneda Airport will open a complex that is directly connected to the international terminal. It will feature a hotel, restaurants, stores and a spa.
Becoming a hub airport in fast-growing Asia can deliver a big economic shot in the arm by developing a neighborhood's infrastructure and attracting international events. Haneda Airport estimates that an increase in departure and arrival slots next year will lift its earnings by 650 billion yen a year.
But there will be occasional turbulence. Political tensions or epidemics could scare off travelers. "Stable profits at nonaviation units will lead to sustainable growth," said analyst Kotaro Toriumi. It offers operators a way to smooth out the bumps.
