The global travel retail landscape is undergoing a profound transformation, moving fast from a transactional model based on price advantage to an experiential model driven by consumer demand.
The global travel retail landscape is undergoing a profound transformation, moving fast from a transactional model based on price advantage to an experiential model driven by consumer demand.
Beste Ermaner, who leads Global Travel Retail for Philip Morris International (PMI), asserts that the Middle East is not just participating in this shift, it is leading the global agenda.
PMI’s own business model is undergoing one of the most ambitious corporate transformations in the industry and Global Travel Retail (GTR) is a pivotal driver. The company's ambition is clear: it aims to become substantially smoke-free by 2030, targeting over two-thirds of total global net revenues from smoke-free products.
Ermaner highlights that the Middle East is PMI GTR’s most critical region, driven by an unprecedented convergence of national investment and evolving legal-age nicotine users behaviour.
The Middle East is the originating region of experience-driven consumer behaviour. Ermaner notes that airports across Dubai, Doha and Abu Dhabi are continuously trend setting places, where brands across all categories must deliver engaging moments just to be present. Competing on price alone is no longer enough; in the Middle East, delivering experience is the minimum requirement for the entire Travel Retail industry.
The region is a strategic hotspot defined by massive investment. Qatar’s Hamad International Airport saw passenger traffic jump 51 per cent (from 35 million in 2022 to 53 million in 2024). Dubai’s Al Maktoum International Airport is set to become the world’s largest with a 260 million passenger capacity and Riyadh’s King Salman International Airport is a cornerstone of Vision 2030.Saudi Arabia's introduction of arrivals sales has added a new dimension to the travel retail landscape, accelerating growth.
PMI GTR’s role is unique: it operates across 166 markets and seven trade channels - including airports, borders, ship chandling, ferries & cruises, airlines, military, and diplomatic - supporting legal-age nicotine users who seek better alternatives to cigarettes and are more open to new experiences and choices while traveling.
The transformation of the entire travel retail ecosystem – across all categories – is driven by two key demographic shifts. By 2028, next-generation consumers are expected to drive two-thirds of all duty-free purchases. This trend is especially pronounced in the Middle East, which has the highest proportion of next-generation travellers globally. They demand agility, inspiration and connection, not the traditional retail model.
PMI asserts it is now an innovative technology company, leveraging $14 billion in innovations since 2008 to develop its smoke-free portfolio. AI is not viewed as a mere tool but as a strategic imperative.
AI is set to rapidly reshape the travel retail landscape: new technologies can be applied to enable data-driven decisions, optimize retail efficiency, and, together with retail partners, create a more personalised shopping experience. PMI believes its transformation journey will unlock AI’s full potential to generate sustainable value, not just for PMI, but also for trade partners.
AI is critical for airports themselves. As biometric security and AI-powered border control systems streamline procedural tasks, travellers spend less time in queues and more time engaging with experiential retail environments.
PMI has already successfully transitioned its retail footprint into multi-category smoke-free product destinations across all major airports in the region. With strong growth projected, the Middle East is set to define the next chapter of innovation in global travel retail.