HH Sheikh Ahmed Bin Saeed Al Maktoum, President of the Department of Civil Aviation, Dubai graced Dubai Duty Free’s 23rd Anniversary celebration held on 20th December 2006 at Dubai Duty Free Shopping Complex

Designed to reflect Dubai’s cultural heritage, the ‘Gifts from Dubai’ Shop is located in the central aisle at Sheikh Rashid Terminal and features soaring Arabian sails and natural wood fittings.

Dubai Duty Free is busy meeting existing demand and budgeting for future growth after recording sales of $724 million in 2006, up 20 per cent over 2005.

The organization, which celebrates 24 years of service in December, will mark the milestone by moving into new off-airport warehousing facilities to keep pace with sharp growth. It is now the third biggest duty free operation globally, after London’s Heathrow and Seoul, Korea.

“Last year’s sales account for 5 percent of total global duty free sales, which we are very happy about,” said Colm McLoughlin, managing director of Dubai Duty Free. “Within two years, we will be a $1 billion company.”
Sales have been spurred by the ongoing growth of Dubai International Airport, which last year handled 28.8 million passengers, and is on course to record 32 million in 2007.

“Our growth has been considerably bigger than the traffic growth, which is why we are one of the top operators in the world,” added McLoughlin. “When we started out we wanted to be a good operation but to be the biggest in size, it was only when we got to five and six we thought about becoming the biggest. We have grown considerably faster than the duty free industry, thanks to the growth of Dubai, our sponsorships and awards. Dubai has been a very busy place in the last 10 years and it’s going to get busier.”

At the end of this year Concourse 2 will open, where it will have an additional 10,000 square meters of retail space, and two years further on, Concourse 3 will come on stream, with another 7,000 square meters of shops.

“By the time that comes, Dubai World Central will also have started and initially we will have 4,000 square meters there too,” said McLoughlin. “So what is 8,000 square meters today will quickly become 25,000 square meters.”

Strong marketing and a series of innovative promotions have also helped drive business:
“Last December we gave 23 per cent off on select items for our 23rd anniversary, and had the biggest day of our lives, with sales of $8 million”
Perfumes, liquor and gold were the top-selling categories and total December sales were $80 million, 33 percent more than the previous record in December 2005.

Colm McLoughlin, Managing Director, Dubai Duty Free

An Taoiseach, Bertie Ahern, T.D., officially unveils the sculpture entitled, ‘The Session’ at The Irish Village during his official visit to the UAE.

More than 1,260 travelers from 68 countries have now won luxury cars in the Finest Surprise raffle draws, with vehicles shipped free to winners’ homes.

“We started the “Finest Surprise Car Draws” in 1989 to celebrate a small expansion of the duty free, but as customers liked it so much, we continued doing it. “The Millennium Millionaire Draw” was meant to be a one-off thing to mark 2000 but we’ve now created 70 new dollar millionaires, which is good for them but also good for us as it’s a good marketing tool,” said McLoughlin. “Now approaching its eighth year of operation, the Millennium Millionaire promotion continues to evolve. The online launch of the promotion in 2001 has served to open it to a global audience and we are seeing a steady increase in online ticket sales from all over the world.”

Dubai Duty Free maintains an aggressive profile through a range of sponsorships, which focus mainly on sporting events.

“We spend 4 percent of our sales on promotions, sponsorships, advertising and marketing, and that’s quite a big spend,” said McLoughlin. “We get asked every day to sponsor something. We think sports are good to be involved with; we sponsor one of the days of the powerboat racing, as well as horse racing, golf and basketball. We believe that sporting events are a tremendous way of reaching a global audience while highlighting the outstanding leisure facilities in Dubai.”

Its showcase Dubai Tennis Championships attracted 124,000 spectators during its back-to-back women and men’s events in 2007, and is now one of the biggest and most established sporting events in the city. “It’s grown up to be a very nice social event with the lakes, lawns and restaurants around,” said McLoughlin.

Two years ago, Dubai Duty Free made a bold move by deciding to award the women the same prize money as the men.

“It was our idea to do it, which is why we have the players – we had numbers two and three in the world this year and would have had the number one except for injury,” said McLoughlin. “In the future, the ladies is changing to give them more time off at the end of the year and we have applied to be one of the nine global tournaments in 2009.”

In the meantime, Dubai Duty Free is looking into expanding the seating of the Dubai Tennis Stadium. “We can hold 5,000 spectators and we are seeing how we can increase that by a couple of thousand. We are waiting on a report to see if it’s do-able before we think about building a new stadium,” said McLoughlin.

All eyes were recently on the Dubai World Cup, where Admire Moon won the $5 million Dubai Duty Free Group One Stakes in the penultimate race of the evening. American Horse of the Year, Invasor, winner of the Breeders Cup Classic, made it an illustrious double by winning the $6 million Dubai World Cup.

Dubai Duty Free also recently sponsored the fourth Dubai International Arabian Horse Championship 2007 at the Dubai International Convention and Exhibition Centre held April 2-4.
The horse racing involvement also extends overseas, with the company sponsoring meetings in Newbury, Ascot and the Curragh in Ireland.

As government owned, there are many festivals and events Dubai Duty Free is involved with, besides its broad sporting commitments, it is also one of the founder sponsors of the Dubai International Film Festival, the Dubai Shopping Festival and Dubai Summer Surprises.
Two years ago, it also started its own Dubai Duty Free Foundation.

Dubai Duty Free now employs 1,800 people on site, and an additional 300 at the Aviation Club and Irish Village. “Dubai Duty Free looks after its staff very well,” said McLoughlin. “If we employ 100 staff, we get 10,000 applicants. We have 38 different nationalities working for us, who speak about 40 different languages. We are getting staff worldwide and recently took 30 people from China.”
Another busy chapter in Dubai Duty Free’s history beckons, what with the new concourses, the opening of the new logistics warehouse and plans to build a 292-room hotel at the Aviation Club. “Work will start next year and it will take up to 27 months to build. It will be five star and nine stories high besides the existing club.”

New facility opening
Dubai Duty Free is moving out of Dubai International Airport into a $28 million logistics facility in December. The 50,000 square meter site, which will contain a 27,000 square meter warehouse and 28 trucking bays as well as office space, is shooting up near the airport close to Dubai Festival City, the new entertainment-meets-shopping complex.
The new facility, designed to handle 10,000 pallets in the first phase, will help the world’s third busiest duty free achieve faster turn-around times for goods at Terminals 1 and 2, and future operations coming up at Concourse 1, 2 and Terminal 3.
“The warehouse will be semi-automated with storage and retrieval for palletized merchandise,” said Ramesh Cidambi, director of information technology and logistics for Dubai Duty Free. “We will also have plastic totes for perfumes and other non-palletized goods and special handling areas for items like garments and cigars.”

Information technology business and services company, Enabler is designing the new warehouse management system based on a Oracle Retail Warehouse Management System.
Dubai Duty Free is talking to the Department of Civil Aviation and Dubai Police into having trucks scanned on arrival at the airport site, thereby preventing the time-consuming business of loading and unloading merchandise.

Logistics challenges have been mounting for Dubai Duty Free, which last year handled 16 million transactions, an average of 44,000 transactions a day. However, up to 85 percent of its total business is funneled into the main Terminal 1 departures area.

“At the moment it takes up to two days from receiving and picking the goods, to having them on sale, so hopefully the new warehouse will help reduce times considerably,” added Cidambi. Its existing warehouse storage area next to Terminal 1 departures will be handed back to the Department of Civil Aviation and used for baggage handling.

MD collects top honor
Colm McLoughlin received The Moodie Report’s inaugural award for ‘Outstanding Career Contribution to Airport Commercial Business’ in March.

The report’s founder and publisher, Martin Moodie, said: “Dubai Duty Free and Colm McLoughlin are more than just a success story. Colm has displayed vision, statesmanship and long before it was fashionable, corporate responsibility, down the years and the recognition is well-deserved.”

McLoughlin began his career in airport retail at Shannon Airport, Ireland, in 1969, and was part of the original team from Aer Rianta, the Irish airport authority, that developed the duty free operation at Dubai International Airport in 1983. Turnover in the first year totaled $20 million but has grown consistently every year under McLoughlin’s leadership. Dubai Duty Free also won ‘Marketing Achievement for Large Company’ at the 2007 Gulf Marketing Review Awards in Dubai. The award was presented at a ceremony in Dubai that attracted over 700 representatives from the marketing industry.

Last year, McLoughlin made it into the 2006 edition of ‘International Who’s Who of Professionals’ and the organization won ‘Middle East Travel Retailer of the Year’ at the Raven Fox Awards and ‘Best Airport for Duty Free Shopping’ at the Business Traveler Middle East Awards.

Dubai Duty Free retained its status as a ‘superbrand’ and the Dubai Duty Free Men’s Open won the ATP Tour Awards for ‘Tournament of the Year’ and ‘Best ATP Tournament – Operations’.