SOUTH KOREA. Tomorrow, 1 March, sees the beginning of a new retail era at Incheon International Airport as four travel retailers commence their duty free contracts.
In one of the most intensely fought duty free tenders of 2007, Lotte Duty Free, AK Duty Free, The Shilla Duty Free (Shilla Hotel) split the major contracts. State-owned tourism body Duty Free Korea (Korea Tourism Organization) was awarded the rights to a number of fashion and accessories (plus miscellaneous items) stores without having to bid.
Shilla replaces DFS Group, which ends its Incheon tenure today.
Besides the departure of the only truly international retailer, the most notable factor about tomorrow’s changes is the switching of categories among Lotte and AK Duty Free.
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Incheon’s new retail quartet (clockwise from top left): AK Duty Free, Lotte Duty Free, Shilla Duty Free, Duty Free Korea | |
Despite running the world’s most successful duty free perfumes & cosmetics operation at Incheon, Lotte – to its bitter disappointment – missed out on that contract which was awarded to Shilla and AK Duty Free, respectively. The two concessions cover a) the existing Passenger Terminal Building West side as well as the new Concourse A due to open in August 2008 and b) Passenger Terminal Building East. The two contracts span 2,294sq m (seven outlets) – to be run by Shilla Hotel – and 1,076sq m (three outlets) – to be run by AK Duty Free.
Instead Lotte takes up exclusive tenure of the liquor & tobacco operation (previously split between Duty Free Korea and AK Duty Free). Lotte’s concession covers 1,923sq m of space (12 outlets) in the Passenger Terminal Building and Concourse A.
Lotte and Shilla Hotel will split the fashion and miscellaneous (including destination merchandise and foodstuffs) categories. Of the two concessions, one (Lotte) covers 2,281sq m in Passenger Terminal East (12 outlets), while space of 4,635sq m (20 outlets) across the central area of the main Passenger Terminal Building and Concourse A will be run by Shilla Hotel.
Incheon International Airport Corporation (IIAC) posted duty free sales of KRW950 billion (just over US$1 billion) in 2007, a +5.1% increase year-on-year. The break-down of sales was as follows:
* Fashion, leathergoods etc: 47%
* Perfumes and cosmetics (including make-up and skincare): 35%
* Liquor: 10%
* Tobacco: 8%
As reported earlier this week, Incheon International Airport was named the world’s top performing airport in Airport Council International’s latest Airport Service Quality (ASQ) survey – ahead of Kuala Lumpur International Singapore Changi airports. The award will be given to IIAC at the Gala Dinner during the ASQ conference and Trinity Forum in Shanghai on 1 April.
Incheon International Airport Corporation President and CEO Jae-Hee Lee will give a major speech at The ACI Airport Business & Trinity Forum on 2 April.
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