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But despite experiencing some difficulties from time to time, nothing really seems to stand in DDF’s, or McLoughlin’s way. Not only has the firm experienced year-on-year growth, but it has also won 250 awards during its lifetime and recorded extremely high profits when compared with other airports around the world. According to McLoughlin, where large hubs such as Heathrow, Amsterdam and Singapore sell to just 16 or 17 percent of their passengers, DDF sells to almost 50 percent. Revenues per customer have also continued to soar - the average $5.5 spent in 1984 having shot up to $47 last year. McLoughlin says the healthy growth is a reflection of the business model, as well as the growth of Dubai.
“Dubai has changed tremendously,” he reflects. “[When we started] the population was about 200,000 people, it’s now close to 2m. The airport was one building and people in Europe didn’t really know where Dubai was. Today I am chased around by European suppliers who want to do business with Dubai, and the aerospace industry alone accounts for 28 percent of the city’s GDP.” He adds however, that the relationship his company and the emirate is not one way, and whilst Dubai has most certainly contributed to DDF’s growth, DDF has also played a part in supporting the city. “At the beginning DDF was one of the few doing advertising for Dubai. We built the Irish Village, we built Century Village, and now we’re about to build our first hotel, so all the time we have been involved in our own small way in promoting Dubai and that has been an important contributor. I remember several years ago Dubai airport won an award, and 90 percent of respondents said it was because of DDF.”
Other efforts include building the tennis stadium, sponsoring horse racing in Europe, and backing initiatives such as Dubai Summer Surprises and the Dubai Tennis Championships – now part of the international sports calendar. In addition, DDF was one of the founding sponsors of the World Cup at Meydan; yet another attraction which McLoughlin says helps bring traffic to the city. The firm is currently in the process of building Jumeirah Creekside hotel, to accommodate passengers staying close to the airport. Looking ahead, DDF’s biggest challenge is to successfully expand its offerings in line with airport growth. By the end of next year, the retail giant is to employ approximately 1000 new recruits to staff outlets at Dubai Airport’s third concourse, which will house Emirates’ A380 superjumbo fleet and include some 8000 square metres of retail space. The department, which will sell everything from perfumes and cosmetics, to jewellery, confectionary and electronics, will take DDF’s staff numbers to nearly 5000. “We are going on a big recruitment drive towards the end of this year for concourse three,” says McLoughlin. “That’s expected to open at the end of 2013 and [we’ll need] about 1000 extra staff.” In line with existing sales figures, the plan is to expand the retailer’s cosmetics offering within the new concourse, catering for surging demand among travellers. “Our single biggest category at the moment is perfume, and yes, it is bigger than gold. So we are talking there about duplicating our perfume and cosmetics [section].”
Three years later, he says, concourse four will open. The new section, being developed in partnership with Dubai Airports and costing AED28bn to construct, will have 8000-9000 square metres of retail space, which DDF has also been asked to oversee. By that time, McLoughlin expects sales of around AED10bn, and a headcount of 8000 staff. Looking even further ahead, DDF will also be responsible for the duty free segment of the Al Maktoum International Airport. Speaking about the venture, McLoughlin says it will be a big job, with 63,000 square metres of retail space needed, and thousands of product offerings, but that it is “very exciting” for DDF. The other focus in the coming years will be to accommodate a flood of Chinese tourists to the region. McLoughlin says Chinese business is becoming very important, with tourists from China among the biggest groups holidaying to the UAE currently. “There is a lot of Chinese travelling, Chinese purchases are increasing all the time, and a lot of them are buying luxury products. If we look every day at the top 10 or 12 individual sales, invariably two or three of them are to Chinese passengers.” To make the most of Chinese spending, DDF is hiring more Chinese staff, with 200 new recruits starting at DDF in January, not to mention introducing Chinese signage and encouraging its non-Chinese workers to learn basic phrases. McLoughlin says this has always been the business model for DDF. “I remember ten or fifteen years ago we had a lot of Russian people coming here, and we made sure we had phrase books in the duty free in Russian language, we made sure we had some Russian equipment, we did some surveys to see what products the Russians were looking for and we made sure to have them in stock,” he says. “We’re doing the same with Chinese. If other airlines come with other groups of people we will do the same thing.”
But what about European customers? Many Dubai retailers, fearing a slump in European travel next year due to the ongoing eurozone sovereign debt crisis, have already pledged to drop prices to account for ailing numbers of European shoppers. McLoughlin says he is not worried. “We have found over the years that European tourism has continued to grow, so I’m not worried. Also Emirates is starting direct flights to Ireland this month. There is a lot of Irish tourism coming here and that’s bound to increase. The more direct flights and the more services that [the airlines launch] the better we will do.”
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FEATURED COMMENT
Thanks to the previous influx of Russian tourists, and now the Chinese tourists ("toursits" read between the lines), DDF