GUAM. Lotte Duty Free has reacted calmly to Guam International Airport Authority’s (GIAA) rejection of the company’s application for rent relief on its speciality retail concession at A.B. Won Pat International Airport
As reported, Lotte had asked for “a temporary adjustment and deferment of its financial obligations” under its US$15.4 million minimum annual guarantee for the contract, which it commenced in 2014.
A Lotte Duty Free spokesperson told The Moodie Report: “It is no secret that the recent devaluations of the Russian Ruble and Japanese Yen against the US Dollar have significantly diminished the number of Japanese and Russian tourists travelling to Guam, which has also resulted in a sharp decrease in Japanese and Russian spending for luxury retail items.
“This has negatively impacted all Guam retailers, especially those dependent upon Guam’s tourism industry.
“Lotte has expended a significant amount, which is greatly exceeding the budget, in providing improvements to the Guam International Airport, including among others, a revamped food court, children’s playground, smoking area, departure area, restrooms and other common areas. These Lotte improvements provide tremendous value and benefit to the travelling public, the airport and the people of Guam.”
Lotte continued: “For these reasons, it is not extraordinary for Lotte to request a temporary adjustment and deferment of its rent under its Specialty Retail Concession agreement with the airport. Such requests are common in the context of any landlord-tenant relationship such as this.”
Lotte pointed out that its request was not unprecedented in Guam, long-time incumbent DFS Group having filed a similar claim for relief during an earlier Gulf War-related triding crisis.
Noting the rejection, Lotte said: “The airport’s denial illustrates that it is strictly complying with its responsibilities under the Concession Agreement, and has not extended any special favours or consideration to Lotte. This reflects that Lotte was awarded the Guam airport concession bid fairly and on its merit, and did not receive any special treatment or consideration by the GIAA.”
