THAILAND. Airports of Thailand (AOT) has set a 30 April deadline for submissions for the duty free concession at Suvarnabhumi Airport in Bangkok plus Hat Yai, Chiang Mai and Phuket airports. The new contract will run from 28 September 2020 to 31 March 2031, we can reveal.
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, with its licence set to expire next year.
As reported, AOT is to restructure its forthcoming tender for commercial operations, with a single partner to be chosen for duty free, plus separate concessions for other retail (including food & beverage, services and foreign exchange) and (importantly from a downtown retail perspective) duty free pick-up counters.
For the duty free concession, the timeline (according to documents from AOT viewed by The Moodie Davitt Report) is as follows:
*19 March to 1 April: Applicants may purchase the documents for Bt2.5 million (US$79,000)
*2 April: Hearing for additional details at AOT head office
*5 April: Site inspection at Suvarnabhumi Airport
*9 April: Site inspection at Phuket Airport
*10 April: Site inspection at Chiang Mai Airport
*11 April: Site inspection at Hat Yai Airport
*30 April: Submission deadline
*2-3 May: Presentation of technical details of bids
*10 May: Decision on winning bidder announced by AOT.
In its statement, AOT confirmed that it will “select one single vendor with the right knowledge and know-how in the business” for the duty free contract.
That decision was made despite pressure from local retail groups to revert to a multiple duty free concession model. That is good news for long-term incumbent King Power International, though it will certainly face intense competition for the business (see below).
Qualified bidders must either be Thai, or can be a consortium or joint venture that is led by a Thai company. In the case of the latter, all submissions must be under the name of the joint venture or consortium only.
Potential partners must not have any contract terminations, outstanding payments, outstanding debts or lawsuits with AOT, the documents stated.
All tenderers must have experience in managing department stores in Thailand covering a minimum of 5,000sq m for at least five years in a row, or have a minimum of five years running duty free shops in Thailand or overseas.
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.
As noted above, competition will likely be intense for the duty free contract in particular. 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. However, King Power took out the major spoils, after being awarded the ten-year duty free concession.
We’ll bring you more news on the bidding for duty free and other concessions at Thailand’s major airports soon.
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