September 23, 2019 / 11:13 AM / 24 days ago

Airports of Thailand plans to auction duty-free pick-up counters

BANGKOK (Reuters) - Airports of Thailand Pcl (AOT) (AOT.BK) on Monday said it would operate and auction off duty free pick-up counters to increase its airport and tourism revenue.

The duty free and travel retail sectors are major beneficiaries of Thailand’s tourism industry. The government expecting 41.1 million tourists to spend 2.21 trillion baht (56.5 billion pounds) this year.

AOT, Thailand’s second biggest company by market value, reported a 4% increase in its concession revenue to 4.2 billion baht in April-June from the same period a year earlier.

Unlisted King Power Group, whose chairman died last year in a helicopter crash, this year won rights to duty free and retail at four major airports including Bangkok’s Suvarnabhumi.

Pick-up counters allow tourists to visit and buy goods at “downtown duty free malls” in the city, a lucrative part of travel retail, before picking up their products at the airport as they leave Thailand.

King Power’s duty-free complex in Bangkok, at one of country’s tallest buildings, competes with Lotte’s Show DC (004990.KS), which features a concert space to draw in tourist groups.

King Power currently operates the counters under its concession, which expires in 2020.

State-owned AOT said it will provide pick-up counters and also grant rights to companies to operate counters at Suvarnabhumi and the low-cost airport, Don Muang.

However, there are different views on how licenses should be granted.

“Pick-up counters should not be operated by a duty-free business,” said Worawoot Oonjai, president of the Thai Retail Association, adding that this arrangement could give companies access to their competitors’ information.

Separate auctions for duty free and retail concessions at Don Muang will be held in October.

Reporting by Chayut Setboonsarng; Editing by Richard Borsuk

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