Thai Retailers Association demands airport shakeup

business March 20, 2019 18:23

By The Nation

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Airports of Thailand PCL (AOT) will have to postpone the March 19 to April 1 window scheduled for the sale of terms of reference envelopes for bidding on commercial space at Suvarnabhumi and duty-free stores at Suvarnabhumi, Phuket, Chiang Mai and Had Yai airports.



AOT president Nitinai Sirismatthakarn responded to criticism of the AOT’s process of TOR development and launch for its duty-free stores at Suvarnabhumi, Phuket, Chiang Mai and Had Yai airports and commercial space at Suvarnabhumi. 

The organisation has selected a master concession model which is deemed as “monopolistic” and may be in conflict with the amended and Public-Private Partnership law.

AOT claims that the core issue prohibiting it from granting concessions by category at Suvarnabhumi airport as demanded by many parties is that the management of space at an airport is different from that at a department store. 

The body said there was uncertain and uneven dispersal of passengers around an airport. In some areas, they are clustered at the boarding gates and not spread out as in shopping malls. 

If space is divided by category, then category A products might be on the left side and category B products on the right. But there might be erratic footfall if smaller planes were using one side. 

AOT may have misunderstood that a concession by category is different from a concession by location.

Concessions by category are usually managed by major product categories, such as cosmetics or alcohol and tobacco and distributed at two or three locations in the airport. 

Although some exits have low passenger traffic at certain times, there are still shops with the same category at exits with high passenger traffic which would help to average out operating results. 

The result would be that on each side there would be both cosmetics or alcohol and tobacco according to space and passenger footfall. 

It would not mean that one category would only be on one side of the airport as previously explained by AOT. As for luxury fashion, there would be just one store per brand in the central area, where there is the highest traffic. 

AOT would only have to plan the allotment of space to locate stores by category to be balanced according to physical aspects of the terminal and the historical passenger flow. 

Suvarnabhumi is already divided by product category but there is just a single concession for all the stores. Concession by category is a model used widely by leading Asian airports such as Changi, Incheon and Hong Kong airports (see illustration).