Lotte Duty Free to remain at Guam Airport until December while Speciality Retail tender proceeds

MARIANA ISLANDS. Lotte Duty Free is to continue its speciality retail (including duty free) concession at A.B. Won Pat International Airport in Guam until 20 December this year while a tender process continues for the business.

That is the outcome of a protracted series of discussions between lawmakers, Guam International Airport Authority (GIAA) and Lotte Duty Free.

In mid-May, Governor Lou Leon Guerrero called the 38th Guam Legislature into special session to hear a bill to authorise the extension of the Korean travel retailer’s concession, which is due to expire on 20 July.

GIAA Chairman of the Board of Directors Brian Bamba told The Moodie Davitt Report today that following the bill’s passing and signing into law, the Board has the right to extend the Lotte agreement for up to three years.

A resultant negotiation with Lotte Duty free saw the retailer agree to remain in place until 20 December, a resolution approved by the Board on 18 June.

That extension allows GIAA to proceed with its tender for the specialty retail master concession, which is currently going through the selection process, Bamba said.

“I’m hopeful the GIAA folks can conclude the process, award the most qualified proposer, and negotiate a new contract before the Lotte expiration,” he added. “I’m hopeful this can be done in ample time for a smooth transition.”

The possibility of a contract extension arose after former A.B. Won Pat International Airport concessionaire DFS agreed to waive a provision in a settlement agreement between DFS, GIAA and Lotte that ended a long-running and bitter dispute tracing back to the controversial 2014 tender.

Lotte Duty Free was awarded a ten-year concession in that bid, ousting long-time incumbent DFS. Lotte’s contract was subsequently extended until July 2026 by the Guam Legislature to compensate the Korean travel retailer for hefty losses from the global pandemic and Typhoon Mawar. ✈

Key RFP details of the Speciality Retail Master Concession

Term

Base term is ten years. This may be extended for one additional period of five years at the discretion of GIAA, upon the same terms and conditions as provided in the draft concession agreement, except for rent and mid-term improvements which will be negotiated at that time. Ultimate duration not to exceed 15 years.

Categories: (1) Exclusive Merchandise

➢Luggage, handbags and leather carry goods
➢ Hard and soft cover luggage; briefcases
➢ Wardrobe carriers, Luggage carriers
➢ Tote bags, Backpacks
➢ Purses, Wallets, Handbags
➢ Personal Accessories
➢ Home décor
➢ Jewelry (fine and costume)
➢ Bath & Body
➢ Cosmetics, Skincare
➢ Fragrances
➢ Optical
➢ High quality men’s, women’s and children’s apparel
➢ Liquor
➢ Cigarettes, Cigars, Tobacco

(2) Non-exclusive Merchandise

➢ Souvenirs and Gifts
➢ Toys and Games
➢ Giftware
➢ Packaged food
➢ Newsstand/Books
➢ Magazine
➢ Sundries
➢ Travel Accessories

Space

±22,038sq ft approximate retail space
±2,352sq ft approximate Gucci retail space
±12,962sq ft approximate Optional Warehouse/Loading Dock/Trash Bin Area/Storage/Employee Lounge/Offices/Exclusive-use elevator