TOP 10 OPERATORS 8: KING POWER INTERNATIONAL
the time, a review of the bidding process was eventually ordered by Thai Prime Minister, Prayut Chan- o-cha. This resulted in the tender being delayed. King Power International has been
operating at BKK under a master concession model for many years. Its contract at the airport expires on 27 September 2020. The new contract will cover around
20,000sq m of space at BKK and include the new satellite terminal which is due to open in 2020 or 2021. The agreement will run from 28 September 2020 to 31 March 2031. Having held the concession since
the airport opened in 2006, King Power International – which was led with distinction by the late Vichai Srivaddhanaprabha until his passing last year in a tragic helicopter crash – overcame intense competition. Rival offers came from a Bangkok
Airways/Lotte Duty Free consortium and an alliance comprising Royal Orchid Sheraton Hotel Thailand, Dufry-owned World Duty Free Group and Empire Asia Group.
Competitive tender A total of five companies were believed to have expressed an initial interest. These included Minor International and Central Group. As reported by TRBusiness, Lotte
was confident it had selected the right partner (Bangkok Airways) to participate in the tender and felt it had every chance of success. A Lotte spokesperson commented
at the time: “We believe Bangkok Airways is an outstanding business partner with over 40 years of experience in airport-related business. “Thailand, one of the world’s most
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in Bangkok from Wichai Bunyoo, Senior Executive Vice President, Business Development and Marketing, Airports of Thailand on 31 May 2019, King Power International submitted a higher financial bid than AoT expected. In securing the duty free
concession for the regional Thai Airports, King Power overcame the same private companies which participated in the BKK tender. It was also revealed that 80% of the
regional Thai Airports bid focused on the technical and business plan. The remaining 20% revolved around the financial return to AoT. On the day the contract awards
were formally approved, AoT revealed the terms associated with each tender. For the BKK duty free concession,
King Power will pay AoT 20% of revenue in any given month, before the deduction of expenses (excluding VAT), or the first year’s minimum annual guarantee (MAG) of $15.4bn which was offered by the retailer. In the years that follow, AoT
will increase the MAG based on passenger growth and inflation from the previous calendar year. Following the capture of the
contract to manage commercial concessions at BKK, AoT will collect a 15% return on monthly revenue before the deduction of expenses (excluding VAT), or a MAG of THB5.8bn —$185.7m (excluding VAT), as offered
Official Partner
Spokesperson, Lotte Duty Free
“Thailand, one of the world’s most popular tourist destinations where about 35 million travellers visit every year, is such an attractive playground for travel retailers.”
by King Power. Regarding the duty free tender for the regional airports, AoT will once again collect a 20% monthly return (before the deduction of expenses and excluding VAT), or the first year’s MAG of THB2.3bn as offered by King Power. The contracts at all three airports will also run from 28 September 2021 to 31 March 2031.
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Successful partnerships With the three tenders approved, King Power International can look forward to the future and continue doing what it does best; working with brands to create the best possible passenger experience across its various locations. These include, BKK, the three
regional airports and Don Mueang International Airport. The current concessions at Don Mueang are due to expire in September 2022. Downtown stores are located in
Established 1998
Rangnam Road, Bangkok and cities such as Pattaya, Srivaree and Phuket. KPIG opened an impressive standalone beauty store earlier
popular tourist destinations where about 35 million travellers visit every year, is such an attractive playground for travel retailers. “If we win, we believe we can
contribute to the development of the Thai travel retail industry
through fair competitions.” Lotte may not have triumphed but
is continuing to contribute to the Thai travel retail industry through its Bangkok downtown duty free store which opened in 2017. According to an announcement
OCTOBER 2019
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The architecture in the terminal and strong local product offering at Bangkok Suvarnabhumi gives passengers a real flavour of Thailand.
TOP 10 OPERATORS 63
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