Incheon Airport 면 this Week's Owner Found...? Tomorrow Marks the 3rd Bid Deadline for Business Rights

Industry: "Conditions Same as Second Round but Situation Worse, Likely to Fail"

On the 18th, the arrival hall of Terminal 1 at Incheon International Airport is deserted due to the impact of the novel coronavirus (COVID-19). Photo by Moon Honam munonam@

[Asia Economy Reporter Lim Hye-sun] As the third bidding for the duty-free shop concession at Incheon International Airport Terminal 1 closes on the 13th, attention is focused on whether a winner can be found this time. The duty-free industry’s response leans toward a high possibility of another failed bid. Due to the uncertain duration of the impact of the novel coronavirus disease (COVID-19), the value of airport duty-free shops is no longer high enough to justify accepting rent based on a 'minimum guarantee amount' system.

According to the duty-free industry on the 12th, Incheon International Airport Corporation received bid participation applications for six Terminal 1 duty-free shop concessions on that day, and on the 13th, it will receive business proposals and price bids to select the final winning companies. The concessions include DF2 (perfume and cosmetics), DF3 (liquor and tobacco), DF4 (liquor and tobacco), and DF6 (fashion), operated by large corporations, as well as DF8 (all items) and DF9 (all items), which are designated for small and medium-sized enterprises. The bidding contract conditions remain the same as in the previous bids.

The duty-free industry expects that the third bidding will likely fail across all zones again. This is because the bidding conditions are identical to those of the second bid, but the industry’s circumstances have worsened. A duty-free industry official said, "The bidding conditions are unclear, so it is practically difficult to step forward," adding, "Entering just because of the symbolic value of an airport duty-free shop carries significant risks." In fact, sales at duty-free shops located in Incheon International Airport have plummeted by nearly 90%. In June this year, sales at Incheon International Airport duty-free shops were 23.7 billion KRW, down 89.3% (197.1 billion KRW) from June last year (220.8 billion KRW). The sales, which used to average around 200 billion KRW per month, have continued to decline, with 116.5 billion KRW in February, 54.4 billion KRW in April, and 23.7 billion KRW in June this year.

A duty-free industry official explained, "There are many variables, so companies seem to be deliberating until the last moment before deciding whether to participate in the bidding," but also noted, "The corporation is reportedly considering private contracts as well." After the second bidding failed, the corporation indicated to companies that if only one company bids for a zone in the third bidding, it could proceed with a private contract. Therefore, some companies considering private contracts are expected to participate in the bidding. However, if all zones fail again and the bidding proceeds to a fourth round, there is a high possibility that the rent payment method will change, raising doubts about whether large duty-free companies will take the risk to participate. A duty-free industry official said, "Without easing the bidding conditions, it is difficult to jump into the concession under the same terms."

This content was produced with the assistance of AI translation services.