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Thailand approves guidelines for opening airport retail space to competition

Thailand approves guidelines for opening airport retail space to competition

A souvenir shop of Leicester City Football Club is seen on October 29, 2018 inside Vichai Srivaddhanaprabha's duty-free business empire King Power in Bangkok. (Photo: AFP/LILLIAN SUWANRUMPHA)

BANGKOK: State-owned Airports of Thailand Pcl (AOT) approved guidelines on Wednesday (Feb 20) for concessions for duty-free and commercial activities at its airports, as it prepares to open up retail space to new players.

AOT operates the six biggest airports in Thailand and will soon announce the terms of an upcoming auction for duty-free and retail concessions at Bangkok's international Suvarnabhumi Airport.

Under the guidelines approved, it is set to offer three retail licences at the auction.

King Power, owner of Britain's Leicester City football club, currently holds the sole license for duty-free retail, commercial activity and pick-up counters at all of Thailand's major airports, but rivals including Central Group, the Mall Group and South Korea's Hotel Shilla are interested in bidding.

King Power's licence is set to expire in 2020.

Last month, retail groups petitioned Thai Prime Minister Prayuth Chan-ocha for multiple duty-free concessions, calling the current master concession monopolistic.

AOT said that there would be three contracts including duty-free retail, commercial activities such as restaurants and duty-free pick up counters.

The guidelines emphasize free competition, especially for duty-free pick up counters, which allow duty-free businesses downtown to deliver goods to passengers, AOT said in a statement.

AOT and the duty-free business is a major beneficiary of booming tourism in Thailand, which saw over 38 million passenger arrivals in 2018.

The airport operator said last week that its revenue from airport concessions rose 10.3 per cent in October-December from a year earlier to 4.3 billion baht (US$138 million) due to an increase in passenger arrivals.

Source: Reuters/nh


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