SOUTH KOREA. Hanwha Galleria Timeworld is to close its duty free shop in Jeju International Airport on 31 August.
The store opened four years ago, but has been strongly impacted by the dramatic decrease in Chinese visitors to Korea (including the island of Jeju) as a result of the THAAD crisis.
As reported, there was a -64.1% year-on-year fall in visitors in May, according to Korea Tourism Organization statistics. The number of Chinese group tourists during the month collapsed by -71.9% to 172,527.
Hanwha said the sales suspension was expected to decrease revenue but have a positive impact on improving profitability.
The retailer told The Moodie Davitt Report: “With the long-term evaporation of Chinese travellers, Galleria is terminating the contract for duty free business at Jeju international Airport.
“Not only have the average monthly sales remained below the monthly fixed costs (rent fee) for operating the Jeju duty free shop, but also the duty free market has entered a serious phase of stagnation. So Galleria is no longer able to sustain the business.”
The closure follows discussions with airport operator Korea Airports Corporation. Hanwha’s duty free licence at Jeju International originally ran until April 2019.
