THAILAND. The Asia Pacific Travel Retail Association (APTRA) has expressed its disappointment about the recent scrapping of arrivals duty-free shopping across the country’s airports.
As reported, the stores were forced to close from 1 August in line with a recent edict from the Ministry of Finance to eliminate the channel and revoke travel retailers’ associated licences.
The move is designed to encourage local market spending by visitors. Arrivals duty-free shops exist at eight international airports – Suvarnabhumi and Don Mueang in Bangkok, Chiang Mai, Phuket, Hat Yai, U-tapao, Samui and Krabi.
APTRA said: “The closure of arrivals stores at Thai airports is a disappointing blow for the travel retail industry, a sector that does not compete with local markets, given its access is only to travellers.
“According to Thai Customs, the sales from arrivals duty free stores at Thai airports in 2023 was reported at US$82 million (THB3.02 billion). However there is no guarantee this amount will directly transfer to the domestic market as shopper motivations in Arrivals stores are very different to those in domestic markets.
“Retail revenue is a vital source of non-aeronautical income for airports and is a significant contributor to investment in national infrastructure and employment. APTRA therefore welcomes the fact that Airports of Thailand has prepared projects to increase revenue from other commercial strategies to compensate for the revenue drop.”
The arrivals shop duty-free allowance was one litre of alcohol, 200 cigarettes and up to 250 grams each of cigars or tobacco.The closures will mean an approximate -20% drop in airport duty-free sales for larger spirits houses, The Moodie Davitt Report can confirm.
The news does not affect land border shops, Jaidee Duty Free Founder Lukas Coates confirmed.
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.
As a result of the closures, Airports of Thailand (AOT) expects a decline of approximately THB1.70 million (US$47,240) per month in revenue from office and state property rent at Suvarnabhumi, Phuket, Chiang Mai and Hat Yai airports.
More significantly, the authority projects a decrease in monthly minimum guarantees of approximately THB126.25 million (US$3.51 million) during the contract period 2024-2025 at Suvarnabhumi; approximately THB8.41 million (US$234,000) at Phuket, Chiang Mai and Hat Yai; and around THB6.96 million (US$193,000) at Don Mueang.
“To further make up for such revenue decline, AOT has already prepared projects to increase revenue from other commercial activities,” the company said. ✈
