NEWS ROUND-UP South Korea expects SME consolidation
had fallen by 25% year on year, while total March downtown and airport sales (including online purchases) were more than 60% lower year-on-year. SME operators have also been hit hard,
especially as many of them rely heavily on airport shop sales. An SME operator told TRBusiness that the company’s March sales were 90% down at Incheon International Airport. To reduce costs until normal business
South Korean travel retail stakeholders are expecting a consolidation of the country’s small and medium-sized enterprise (SME) operators, who were facing huge pressure before the outbreak of the coronavirus (Covid-19). In the first quarter of 2020, South Korea’s
leading duty free operators had to reduce their downtown and airport store opening hours due to a lack of customers. Already suffering from the disappearance
of high spending Chinese customers from stores, operators’ woes were compounded by a dramatic increase in domestic Covid-19 cases in February. One leading South Korean duty free operator told TRBusiness that Q1 revenue
recovers, duty free operators have asked Incheon International Airport Corporation (IIAC) and Korea Airports Corporation (KAC), which owns South Korea’s other airports, for concession fee reductions to help them through these troubled times. The South Korean duty free industry’s
current predicament is in total contrast to this same period last year, which ended with another year of record sales. The country’s total duty free sales rose
by 24.4% to KRW25 trillion/$21.44 billion in 2019, according to industry figures. Total monthly duty free sales averaged
an estimated KRW2.1tn in 2019, which at average 2019 exchanges rate is about $1.8bn per month.
Dubai Airports waives MAGs in Covid-19 relief
Dubai Airports is working closely with aviation and commercial partners and preparing for a gradual remobilisation. This will take place once travel restrictions
relating to the coronavirus (Covid-19) pandemic are lifted. Aviation partners, tenants and
concessionaires have received details of an assistance programme agreed by the company, under a business stabilisation framework. “Dubai Airports has responded decisively
to the Covid-19 crisis and is among the first airport operators to propose meaningful assistance to airline and commercial partners”, said the company. The assistance programme is applicable
for the impacted period 1 March 2020 to 31 May 2020. The programme includes waiving 100% of minimum guarantees or equivalent fees for partners, which have been required to cease trading due to the suspension of airport operations as a result of the pandemic.
Heinemann in cost- cutting measures
Leading global travel retailer Gebr. Heinemann has released a statement revealing the roll out of a ‘comprehensive set of measures’ to cut costs and preserve liquidity in the face of the coronavirus (Covid-19) pandemic. The Hamburg-headquartered travel
retailer last provided a formal trading update to TRBusiness in mid-February [when global Covid-19 cases numbered in the tens of thousands in stark contrast to today’s three million-plus - Ed], but approaches from this publication since then did not yield further comment. In a status update circulated in April,
Gebr. Heinemann acknowledged the significant financial challenges presented by Covid-19 owing to the collapse of global travel and the decimation caused to travel retailers, airlines, airports, cruises, hotels, tour operators. High turnover losses are being felt and
income to cover fixed costs has virtually dried up, says Heinemann.
Downtown duty free store sales reached $18.26bn, up 25% year-on-year and accounted for 85% of South Korea’s total airport and downtown duty free sales (not including inflight duty free). The South Korea report begins on p50.
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