THAILAND. Airport duty-free arrivals shops are to be closed in an effort to stimulate domestic market spending by tourists.
The news, confirmed by a senior King Power Duty Free executive to The Moodie Davitt Report today, will mean an approximate -20% drop in airport duty-free sales for larger spirits houses according to reliable sources.
The current arrivals shop duty-free allowance is one litre of alcohol, 200 cigarettes and up to 250 grams each of cigars or tobacco.
Second consecutive blow to the business
The news follows hot on the heels of an announcement that Airports of Thailand (AOT) is to reclaim some 1,400sq m of space at Suvarnabhumi Airport in Bangkok and 491sq m at Phuket International from King Power and three government agencies (Immigration Bureau, Thai Customs Department and Revenue Department) to enhance basic operational facilities. King Power’s rental terms are being adjusted accordingly.
That decision was driven by a dual AOT and government goal to upgrade Suvarnabhumi Airport to rank among the world’s top 50 airports by 2025 and the top 20 within the next five years.
The AOT Airport Service Quality Strategy Committee recommended that AOT alleviate congestion by undertaking key improvements within the terminal for airport operations and offering additional passenger facilities.
“The reclamation of those areas might cause a decrease of approximately THB1,015,000 (US$27,559) per month in office and state property rent and a decrease of approximately THB74 million (US$2,009,231) and THB19 million (US$515,883) per month in minimum guarantee for the 2024-2025 contract years at Suvarnabhumi Airport and Phuket International Airport, respectively,” AOT said.
“To further make up for such a revenue drop, AOT has prepared projects to increase revenue from other commercial activities.”
Land border shops unaffected
The arrivals shopping news is in line with widespread reports in late 2023 of such a move.
Arrivals duty-free shops are currently in place at eight international airports across the country – Suvarnabhumi and Don Mueang in Bangkok, Chiang Mai, Phuket, Hat Yai, U-tapao, Samui and Krabi – according to Bangkok Post.
Citing Thai Customs statistics, the title reported that airport arrivals duty-free sales reached THB3.02 billion (US$82 million) in 2023.
The news does not affect land border shops, Jaidee Duty Free Founder Lukas Coates confirmed to The Moodie Davitt Report.
As reported, Jaidee Duty Free runs a trio of land border duty-free stores in traditionally high international passenger traffic locations along the Mekong River region – on Thailand’s borders with Cambodia, Laos and Myanmar. ✈
