The process to choose a new operator to run Incheon Airport's duty-free stores has begun in earnest.
On Dec. 11, Incheon International Airport Corp. issued a bid notice to select new operators to run the perfume and cosmetics (DF1) and liquor and tobacco (DF2) stores located in the departure area on the third floor of the passenger terminal at Incheon Airport.
DF1 and DF2 are the core concessions that account for the largest share of total sales at Incheon Airport duty-free stores. Without major changes to the concession makeup, the plan reflects adjustments to exclude some inefficient stores and changes stemming from improvements to processing facilities.
The contract period is about seven years, from the business start date through June 30, 2033. The business start date is the day after the previous operator's contract ends for each concession. Under relevant law, the operator may request to renew the contract within a maximum of 10 years.
Earlier, Shilla and Shinsegae Duty Free returned their DF1 and DF2 concessions in September and October, respectively. The two duty-free operators had been asking Incheon International Airport Corp. to lower rent due to operating losses, but their request was not accepted.
In this bid, Incheon International Airport Corp. lowered the rent for DF1 (15 stores, 4,094㎡) by 5.9%, from 5,346 won to 5,031 won (including VAT), and for DF2 (14 stores, 4,571㎡) by 11.1%, from 5,617 won to 4,994 won.
With the rent lowered, there is speculation that Shilla and Shinsegae Duty Free, which returned the concessions, may bid again, or that Lotte Duty Free or Hyundai Duty Free may participate. There is also talk that overseas operators such as China Duty Free Group (CDFG) and Thailand's King Power could enter the fray.
The bidding will proceed with participant registration and proposal submission by Jan. 20 next year, followed by evaluations and patent reviews by the Korea Customs Service. If Incheon International Airport Corp. selects multiple qualified operators for each concession and notifies the Korea Customs Service, the Korea Customs Service will select the successful bidder through a patent review.