THAILAND. Airports of Thailand is to restructure its forthcoming tender for commercial operations at Suvarnabhumi Airport in Bangkok plus Hat Yai, Chiang Mai and Phuket airports.
In a statement obtained by The Moodie Davitt Report (see below), the Airports of Thailand board today (20 February) approved a resolution to agree on the issuing of three contracts. These will be separated as follows:
- Duty free
- ‘Retail’ (food & beverage, services and foreign exchange)
- Duty free pick-up counters
The biggest talking point is that Airports of Thailand will retain a single duty free retailer model for the airports, despite pressure from local retail groups to revert to a multiple duty free concession model. That is good news for powerful long-term incumbent King Power International, though it will certainly face intense competition for the key contract (see below). King Power had no comment to make when approached by The Moodie Davitt Report.
The offering of a separate contract for the on-airports pick-up counter represents a move to encourage downtown competition.
King Power International currently holds the sole licence for duty free retail, commercial activity and pick-up counters at all of Thailand’s major airports. Its licence is set to expire in 2020.
There is likely to be tough local and international competition for all three concessions.
Korean giants The Shilla Duty Free and Lotte Duty Free already have businesses in Thailand and other players such as Lagardère Travel Retail, Dufry and DFS will likely be among the mix. Given the importance of Chinese tourism in Thailand, China Duty Free Group could also be a contender.
Powerful local retailer The Mall Group is being touted by local media as a candidate, while as reported, Thai retailer Central Department Store Company (Central Group) bid with DFS Group (through DFS Venture Singapore) to win the ten-year duty paid retail and services (mainly F&B) concession at the new U-Tapao Rayong-Pattaya International Airport. The Central Group/DFS partnership will also be responsible for the airport duty free pick-up counters when operations begin this month. However, King Power took out the major spoils, after being awarded the ten-year duty free concession.
As we reported in March last year, Airports of Thailand weighed up a range of concession models for the duty free contract. The selection process, said the airports company, would focus on transparency, fairness and verification. The authority stipulated the concession model must be one that is used in airports around the world, but also be appropriate for AOT’s airports.
Earlier this month, Airports of Thailand reported a 10.31% increase in concession revenues for the first quarter ended 31 December 2018, to THB4,336.29 million (US$138 million).
NOTE TO AIRPORT OPERATORS: The Moodie Davitt Report is the industry’s most popular channel for launching commercial proposals and for publishing the results.
If you wish to promote an Expression of Interest, Request for Proposals or full tender process for any sector of airport revenues, simply e-mail Martin Moodie at Martin@MoodieDavittReport.com.
We have a variety of options that will ensure you reach the widest, most high-quality concessionaire/retailer/operator base in the industry – globally and immediately.
Similarly The Moodie Davitt Report is the only international business intelligence service and industry media to cover all airport consumer services, revenue generating and otherwise.
We embrace all airport non-aeronautical revenues, including property, passenger lounges, car parking, hotels, hospital and other medical facilities, the internet, advertising and related revenue streams.
Please send relevant material, including images, to Martin Moodie at Martin@MoodieDavittReport.com for instant, quality global coverage.
