US air passenger numbers are back to pre-9/11 levels and the Caribbean cruise business is bouncing back after last year's damaging hurricanes - all good news for travel retail. Joe Bates found duty-free suppliers and retailers in confident mood on their way to the International Association of Airport Duty Free Show in Fort Lauderdale this week.

Liquor suppliers and regional travel retailers heading to the annual International Association of Airport Duty Free Show in Fort Lauderdale this week are in bullish mood. Passenger numbers at US airports are back to pre-9/11 levels; the US dollar is weak, tempting overseas travellers to spend more, and the key Caribbean cruise ship business looks to be bouncing back strongly after last year's disastrous hurricane season.

"We are very pleased with the performance of all our brands in the Americas, especially with duty-free sales of Jack Daniel's in the US," says Brown-Forman vice-president global channels/developing brands Patrick Moran, whose upbeat comments are typical of many suppliers. "In the North American market we have noticed a strong return to growth among European travellers."

Maxxium Travel Retail Americas has experienced double-digit growth across its brand portfolio, which includes Rémy Martin, Absolut, The Famous Grouse and The Macallan, since commencing operations last July. Regional director Santiago Cash says the US is performing particularly well. "There is increased activity in every channel. Cruise lines are attracting a greater number of vacationers; international passenger numbers are increasing at airports, and border operators on the US/Mexico border are refurbishing their stores."

"The picture for our liquor business in the region is quite positive for the coming year," adds Jonathan Potash, group category manager spirits at Dufry Americas, which operates 150 stores throughout the region. "Our newly expanded retail operations at Mexico City airport, the addition of Santo Domingo and Puerta Plata airports in the Dominican Republic and the strong performance of our US airports, have all contributed to robust liquor growth. We have aggressive renovation plans for our Mexican operations in Cozumel and the Dominican Republic, which will further drive the category in 2006."

The only problem affecting the regional outlook is reported by duty-free store operators along the US/Canadian border. Traffic is suffering from new legislation requiring travellers to carry their passports when crossing between the two countries. The high value of the Canadian dollar is also deterring US consumers from spending. As a result of both these factors, Ontario-based Blue Water Bridge Duty Free vice-president of sales Tania Lee-Hartmann says its liquor business remains "flat" this year.

Many US travellers still believe duty-free shops offer poor value for money. This factor has led the Americas duty-free spirits market to lag behind Europe and Asia/Pacific in terms of its size. European, Latin American and to a lesser extent Japanese and South Korean travellers are the most enthusiastic liquor purchasers at US airport shops.

Nevertheless, the latest forecasts from duty-free industry analyst Generation support anecdotal evidence of a sustained regional upturn. Duty-free liquor and wine sales in the Americas region are predicted to reach US$1.13bn this year, rising to about $1.35bn by 2010, an overall increase of nearly 20%. During the same period, sales in the larger markets of Asia/Pacific and Europe are set to grow by 23% and 13.5% respectively.

The whisk(e)y category, easily the largest spirits sector in the Americas duty-free market, is likely to drive much of this forecast growth. For instance, Pernod Ricard Travel Retail North America president Christophe Lemarié says Chivas Regal and Jameson both enjoyed strong growth last year. He expects great things from the recent addition of ex-Allied Domecq brand Ballantine's to the company's portfolio.

Ballantine's aged references are to be promoted heavily in West Coast US airports such as San Francisco and Los Angeles which have a high percentage of South Korean travellers, who know the brand well, says Lemarié. Meanwhile, entry-level Ballantine's Finest is tipped to do well among tourists in the French-speaking parts of the Caribbean, where it benefits from its strong position in the French domestic market.

Ranked in second place after whisk(e)y, the liqueurs category is also growing in the Americas duty-free market, driven mainly by the booming Caribbean cruise ship business. According to the International Wine & Spirit Record, US duty-free sales of liqueurs reached around 400,000 cases in 2004, 6% up on the previous year.

Competition for onboard listings among suppliers is increasingly fierce and brands are looking to forge closer ties with cruise lines. For instance, last year Bacardi launched an annual Bartender and Chef Cruise Competition, which invited bartenders and chefs from 17 cruise lines and ferry operators worldwide to submit recipe ideas inspired by its brands.

Meanwhile, on a smaller scale Pernod-owned Malibu has linked up with Carnival Cruise Lines to offer sponsored cruises, featuring product tastings, cocktails, pool parties, prize giveaways, and karaoke nights. Onboard stores run promotional pricing on all Malibu flavours with brand ambassadors giving out free t-shirts and cocktail recipe cards.

Wine is the other duty-free drinks category likely to do well in the Americas in the coming years, reflecting a worldwide trend, which saw global sales rise by over 15% to reach $694m in 2004, according to Generation. In the last two years, wine stores promoting locally produced varieties have opened across the continent from Buenos Aires and Santiago airports in Argentina and Chile, to Dallas Fort Worth and Charlotte-Douglas airports in the US. Expect more wine shops to open at other regional airports in the near future.