Lotte Duty Free is set to hand over its duty free shop space at Jeju International Airport on April 20 to new operator, Hanwha.

Lotte’s five-year sole concessionaire license expires on this date, after it recorded duty free sales worth W.61bn ($56m) in Jeju Airport’s 410sq m international duty free last year.

Jeju Airport records the largest duty free sales amongst all of the Korean Airports Coporation’s airports, thanks to long-established government regulations permitting South Korean residents to buy duty free items up to the value of $400. This special allowance was originally granted as part of efforts to boost Jeju’s domestic tourism industry.

In addition to Lotte’s sales last year, Jeju Development Corporation (JDC) operates the duty free store used by South Korean residents in Jeju Airport’s domestic terminal, where sales last year reached W.338bn ($310m) from retail space of almost 3,000sq m.

ALL CHANGE IN JEJU?
Interestingly, JDC’s five-year concession at the Jeju Airport domestic duty free shop also expires at the end of this year.

To comply with government policy encouraging smaller companies and new operators to operate duty free shops, Lotte Duty Free, Shilla Duty Free and WalkerHill Duty Free did not bid for the new Jeju Airport international terminal concession.

For its part, Hanwha is a smaller conglomerate by comparison with Lotte and Shilla and it has not operated any duty free shops until now. However, it is expected to bid for further concessions in future, including some at Incheon International Airport which is due to go to bid for all of its retail concessions this summer.