THAILAND. Airports of Thailand will tender the duty free concession at Bangkok Suvarnabhumi Airport in a separate contract from three other airports, according to a release from Airports of Thailand, first reported by Reuters. The tender process is scheduled to be completed in May.
As reported, Airports of Thailand had initially opted to retain a single duty free retailer model covering Bangkok Suvarnabhumi and three other airports, Chiang Mai, Hat Yai and Phuket. It has now amended the tender structure to revert to a single retailer model for Suvarnabhumi and a another single retailer concession covering Chiang Mai, Hat Yai and Phuket airports.
King Power International is the long-term incumbent at all four airports, with its contract at Suvarnabhumi set to expire in 2020. A licence for non-duty free commercial activity at Suvarnabhumi, including food & beverage, services and foreign exchange, expires at the same time and will also be up for auction in May.
King Power had no comment to make when approached by The Moodie Davitt Report.
As we revealed previously, the Bangkok Suvarnabhumi duty free concession will commence on 28 September 2020 and expire on 31 March 2031.
Under a revised timetable, bids for this concession must be submitted by 22 May, and Airports of Thailand will announce the results by 31 May.
An updated timetable for the Chiang Mai, Hat Yai and Phuket airports duty free tender has yet to be published.
As reported, King Power is likely to face tough local and international competition for the 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 is also 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.
In February, 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).
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