CONCESSIONS
Indeed, Incheon Airport earns 64% of its non-aeronautical revenues from duty free operations, while retail and F&B activity in general accounts for 50% of its total income. And the total could be even higher if it wasn’t for the
airport’s competitive pricing policy, which is in line with the philosophy that a government-owned company should only earn a profit of between 5% and 10% of its turnover. The airport has also been particularly generous to its concessionaire tenants by volunteering to reduce their rent by 10% during the global economic crisis to lessen the impact of reduced sales due to the decline in passenger traffic. CW Lee explains: “The economic downturn means that the last few years have been difficult ones for our concessionaires. Recognising this, we volunteered to lower their rent by 10% to help them through these challenging times. “The decision has reduced our revenues by $150 million for the last two years, but it was the right decision to make and it has been appreciated by the operators of different shops and restaurants.
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“As someone once said, rule number one is don’t let your customers lose money and don’t make them cry. Rule two, is don’t forget rule number one!” Incheon Airport’s medium-term target for duty free sales – as opposed to earnings – is between $1.4 billion and $1.5 billion by 2013 and $1.8 billion for 2015. If achieved, this would represent an 85% increase compared with total sales of $970 million 2009. Today, Incheon boasts a total of 150 shops and restaurants in the main terminal and Concourse A, although the number is set to rise to nearly 160 by 2011 year-end due to the planned addition of three more F&B outlets and at least another couple of shops.
The total excludes a handful of new outlets that will also open in Transportation Centre, which already has 11 shops & F&B facilities that include Mario Crepes, Olive Young and Etude.
The planned new outlets in the Transportation Centre will also be joined by a 229-seat cinema and a 1,109sqm skating
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