Travel Retail Tobacco Global Market Opportunities and Strategies to 2034

This report describes and explains the travel retail tobacco market and covers 2019-2024, termed the historic period, and 2024-2029, 2034F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global travel retail tobacco market reached a value of nearly $8.04 billion in 2024, having grown at a compound annual growth rate (CAGR) of -0.98% since 2019. The market is expected to grow from $8.04 billion in 2024 to $13.46 billion in 2029 at a rate of 10.86%. The market is then expected to grow at a CAGR of 9.84% from 2029 and reach $21.53 billion in 2034.

Growth in the historic period resulted from the increased promotion and marketing efforts, increase in global air travel, expanding airport infrastructure and rising tourism industry. Factors that negatively affected growth in the historic period were marketing restrictions and rising health awareness.

Going forward, the expansion of duty-free zones, rise in business travel, price advantage from duty-free exemptions and rising popularity of cruise tourism will drive the growth. Factor that could hinder the growth of the travel retail tobacco market in the future include rigid government regulations, high tobacco taxes and duties and impact of trade war and tariffs.

Asia Pacific was the largest region in the travel retail tobacco market, accounting for 41.98% or $3.37 billion of the total in 2024. It was followed by Western Europe, North America and then the other regions. Going forward, the fastest-growing regions in the travel retail tobacco market will be Asia Pacific and North America where growth will be at CAGRs of 12.48% and 10.41% respectively. These will be followed by Western Europe and South America where the markets are expected to grow at CAGRs of 9.54% and 9.47% respectively.

The global travel retail tobacco market is highly concentrated, with large players operating in the market. The top ten competitors in the market made up to 66.52% of the total market in 2024. Avolta AG was the largest competitor with a 24.02% share of the market, followed by Lagardère Group with 23.59%, China Tourism Group Duty Free Corporation (CTG) with 9.77%, DFS Group Ltd with 1.62%, Lotte Duty Free with 1.40%, Dubai Duty Free with 1.35%, Gebr. Heinemann SE & Co. KG with 1.28%, King Power International Group with 1.21%, Qatar Duty Free Co with 1.16% and Aer Rianta International with 1.14%.

The travel retail tobacco market is segmented by product type into cigarettes, cigars and cigarillos, smokeless tobacco, next-generation products and other product types. The cigarettes market was the largest segment of the travel retail tobacco market segmented by product type, accounting for 49.73% or $3.99 billion of the total in 2024. Going forward, the next-generation products segment is expected to be the fastest growing segment in the travel retail tobacco market segmented by product type, at a CAGR of 14.22% during 2024-2029.

The travel retail tobacco market is segmented by distribution channel into airports, cruise ships, border shops, railway stations and other distribution channels. The airports market was the largest segment of the travel retail tobacco market segmented by distribution channel, accounting for 60.74% or $4.88 billion of the total in 2024. Going forward, the airports segment is expected to be the fastest growing segment in the travel retail tobacco market segmented by distribution channel, at a CAGR of 13.36% during 2024-2029.

The travel retail tobacco market is segmented by end user into young adults (18-30 years old), adults (31-59 years old) and seniors (60+ years old). The adults (31-59 years old) market was the largest segment of the travel retail tobacco market segmented by end user, accounting for 53.64% or $4.31 billion of the total in 2024. Going forward, the young adults (18-30 years old) segment is expected to be the fastest growing segment in the travel retail tobacco market segmented by end user, at a CAGR of 12.13% during 2024-2029.

The top opportunities in the travel retail tobacco market segmented by product type will arise in the cigarettes segment, which will gain $2.31 billion of global annual sales by 2029. The top opportunities in the travel retail tobacco market segmented by distribution channel will arise in the airports segment, which will gain $4.26 billion of global annual sales by 2029. The top opportunities in the travel retail tobacco market segmented by end user will arise in the adults (31-59 years old) segment, which will gain $3.1 billion of global annual sales by 2029. The travel retail tobacco market size will gain the most in China at $1.07 billion.

Market-trend-based strategies for the travel retail tobacco market include focus on first-of-its-kind heated tobacco launch for adult smokers in UAE travel retail, focus on next-generation travel retail strategy focuses on adult nicotine users, focus on major partnership drives expansion of duty-free retail at Kansai airport and focus on retail expansion marks major step for Seoul airport duty-free market.

Player-adopted strategies in the travel retail tobacco market include focus on expanding business capabilities through new launches.

To take advantage of the opportunities, the analyst recommends the travel retail tobacco market companies to focus on heated tobacco innovations in travel hubs, focus on personalized smoke-free offerings for adult travelers, focus on personalized smoke-free offerings for adult travelers, focus on next-generation products to drive long-term growth, expand in emerging markets, continue to focus on developed markets, focus on strengthening airport retail partnerships for broader distribution, focus on tiered pricing strategies across geographies, focus on channel-specific campaigns, focus on targeted traveler segmentation and focus on targeted engagement with young adult consumers.

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