Co-CEOs Max Heinemann and Raoul Spanger reflect on the highs and lows of the past year, outlining how the Heinemann Group has positioned itself to become even more resilient and explaining what it takes to excite a new generation of travelers.
Under what headline would you briefly summarize 2024 for the Heinemann Group?
Max Heinemann: “A year of successes and challenges in a complex environment” sums it up. Indeed, 2024 was like a whirlwind. From a sales perspective, we are satisfied that we managed to grow by 21 percent across our group.
What positive developments has Gebr. Heinemann seen?
Raoul Spanger: We celebrated several successes that highlight the multifaceted nature of our global business. These include our new and expanded partnerships, such as winning contracts at Noida Airport in India and Keflavik Airport in Iceland, both new markets for our retail business. In addition, we have gained many new customers in distribution, expanded our activities, for example in Africa, and secured contract renewals, such as with eurotrade at Munich Airport and Color Line on ferries. These achievements make us extremely proud as they underscore our company's strong reputation and the trust placed in our group. We have been and continue to be able to demonstrate that we are the right partner, bolstered by our stable background as a family business. Unfortunately, we did not win the tender for Schiphol Airport in Amsterdam. Every business we conduct must be on a sound financial business plan and on a necessary profitability.
Max Heinemann: We have seen many highlights in our operations as well. The Middle East Africa region has been a sales driver, particularly due to our strong presence in Turkey with our joint venture partners Unifree Duty Free and ATU Duty Free. Turkey is a real growth engine, which has been further strengthened by winning Antalya through ATU Duty Free. We also entered a new market, Saudi Arabia, with the opening of the first shops at Jeddah Airport and starting sales on the region's first cruise ship, the AROYA. As this region is such a growth market, we have also decided to establish another regional headquarters there with Heinemann Middle East Africa in Dubai.
In cruise retail, Gebr. Heinemann achieved two superlatives in 2024: the opening of the world's largest retail space on the AROYA and shop operations on the world's largest cruise ship, the Icon of the Seas. What significance does the cruise business have for the group?
Raoul Spanger: The cruise business as a whole has a fantastic momentum in terms of passenger bookings, experiences, and investments, and we are pleased to expand partnerships that continue to flourish. For example, with Royal Caribbean, besides the Icon of the Seas, we also started operations aboard the Utopia of the Seas in 2024. We owe this success to our fantastic team at Heinemann Americas, with whom we celebrated our ten-year anniversary on the back of a very positive business development.
Earlier, you mentioned 2024 was like a whirlwind, what were the challenges?
Max Heinemann: Travel retail has always been affected by political and geopolitical influences. We see humanitarian issues throughout the world, including our two sales regions, Ukraine and Israel, and are concerned about the impact on our employees. Their safety is our number-one priority as a family business. Addressing any potential business impact is secondary.
Raoul Spanger: Furthermore, several countries are facing economic challenges, including high inflation or currency devaluation. In this context, we are also seeing new travel and shopping behaviors around the globe.
How have these behaviors changed? And how are you dealing with it?
Max Heinemann: In some ways, the world is very different today. The new normal seems to be instability and imbalance in the world and that naturally leads to uncertainty. Global travel is on the rise. We see a great desire to travel worldwide. But customer expectations have changed. Facts and feelings play an interconnected role. What do I get for what and, above all, how? Attracting attention and turning travel time into valuable time is therefore of ultimate relevance.
Raoul Spanger: Due to political decisions and developments in the aftermath of Covid-19, there has been a significant change in the shopping behavior of Chinese travelers in particular, who used to be a high-spending group. We do not expect this customer group to return with their former purchasing power. As a result, our industry as a whole is experiencing a significant and sustained decline in sales in the Asia Pacific region, not only now, but for the foreseeable future.
Consequently, you have set a new course in Asia Pacific.
Max Heinemann: We needed to realign our business activities as quickly and thoughtfully as possible to ensure we can operate efficiently in a significantly reduced market. At the same time, we had to secure the expertise and resources to support the ramp-up of our new location at Noida Airport, together with our Indian consortium partner BBM Group and in cooperation with Zurich Airport. India is the only country in the region that is not following the current negative trend. Asia has to reset and recalibrate itself as a region now.
What gives you reason to be positive about the future?
Raoul Spanger: Travel has made a strong comeback, and people cherish the freedom it brings. This positive development is the foundation for travel retail, and we are fully committed to it. To secure our business for the long term, we are continuing our strategic path of diversifying our portfolio across channels and regions. This includes, of course, further investments, such as our 50 percent stake in the NOBILIS GROUP, where we continued our efforts last year to establish it as a European leader in beauty distribution – as demonstrated by the acquisition of a majority stake in the Scandinavian distributor TMC Nordic. We also encourage our suppliers to support this strategic direction.
Max Heinemann: In our family business of more than 145 years, we have consistently shown that we know how to handle difficult times. I am proud to see everyone within the Heinemann Group rising to the challenge and doing their utmost. This is an amazing feeling, and I would like to sincerely thank all our employees for their efforts. We think in generations, not quarters, and they, as well as our partners, can count on that. I am even more pleased that my cousin, Clara Heinemann, is now the second member of the fifth generation to be actively involved in the company.
Where do you see the potential and prospects for 2025 and beyond?
Raoul Spanger: Standing on two legs, retail and distribution, and across sales channels, offers us various opportunities to grow – in new as well as in existing partnerships and markets. To give just one example, we see further potential in the Middle East Africa region and are working hard to make our market entries in Saudi Arabia and India a great success. To be close to the market and our customers in the region, we opened a regional headquarters with Heinemann Middle East Africa in Dubai in 2024 and will further strengthen our team there. We are also continuing to invest in our promising border shop channel. Additionally, we are collaborating with suppliers and customers to further internationalize the flow of goods in our supply chain, aiming to significantly reduce emissions and achieve our sustainability goals.
Max Heinemann: We have grown into a global group of companies, diverse with a variety of extraordinary skills and strengths, and probably the most innovative partner in our industry. The courage to take new paths is part of our recipe for success, and we see great potential in our innovative capabilities, led by our vision hub, GHARAGE and beyond. Innovation is driven by embracing decentralized ideas, by provocation, by creating different views, and by envisioning the future of our industry as a whole to unlock underlying potential for the next generation. That's family business. That's taking the long view. That's how we think and act.