SOUTH KOREA. Incheon International Airport Corporation (IIAC) will in future factor in the impact of the 2018 opening of the new Terminal 2 to the duty free contracts currently out to tender for the existing terminal, The Moodie Report can confirm.
As revealed by The Moodie Report, IIAC last Friday released its long-awaited duty free tender, offering a series of five-year contracts from the date of opening in 2015.
The tender excludes T2, which opens in 2018. Potential bidders are concerned about the impact that will have on traffic at the existing terminal, especially if leading national carrier Korean Air moves to the new facility.
However, when T2 opens IIAC will evaluate the effect of passenger relocation and re-calculate the minimum annual guarantees (MAGs) in place, we understand reliably.
As reported, the tender has been structured into two major groups, open to major Korean and national retailers on the one hand and small & medium Korean enterprises (SMEs) on the other. Proposals will be judged 60% on the business proposals, 40% on financial criteria.
The seven major licences, currently held by Lotte Duty Free, The Shilla Duty Free and Korea Tourism Organization (KTO), are being extended to 12. Four additional licences (DF9 to DF12, see map) are being offered exclusively to SMEs, with no company being able to win more than one. All agreements will run for five years from the starting date once finalised.
IIAC has also clarified its stipulation in the tender that no “consortium or joint contract” is allowed. That counts out joint ventures for the major concessions but for the SME opportunities partnerships will be allowed between a Korean SME and another entity (provided the entity was in place at the time of the tender being issued).
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Bidders have until the end of January to formulate and finalise their offers in one of the most intriguing tenders in travel retail history |
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Cross reference the map locations with the table above to see where the major and SME retailers respectively will be operating. Click on the above to view the enlarged image (then hover over graphs with your cursor and click for full detail) |
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Selected arrivals to South Korea by purpose and nationality in October 2014 underline the continued extraordinary surge in Chinese visitor numbers; Source: KTO |
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Accumulative figures of selected arrivals to South Korea by purpose and nationality for the ten months to October 2014. Note the relative performance of Japanese to Chinese; Source: KTO |
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Departures by Koreans for the first ten months of 2014 by gender (above) and by age (below) |  |
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The world’s biggest duty free tender has been split up to offer multiple opportunities to the industry giants and small & medium enterprises |
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