Shanghai Orient King Power Travel Retail Co Ltd General Manager Mackintosh Feng has called for a review of the airport concession model amid the coronavirus (Covid-19) crisis.

Feng expressed his views on the LinkedIn social network. He declined to comment further when approached by TRBusiness.

The flexibility of the current airport concession model has long been questioned, but according to the King Power Hong Kong subsidiary the model needs to change now as a result of the pandemic.

STRONG DOMESTIC PRESENCE AT SHANGHAI PUDONG

Orient King Power runs branded shops across domestic terminals one and two at Shanghai Pudong International Airport.

Feng said: “Payments in the first 12 months of any new contract should be based on a guaranteed rent or turnover royalty, depending on which is lower.

“After the thirteenth month of any new agreement, tenants should pay airports a guaranteed rental fee or turnover royalty fee, whichever is higher. This will help create a positive feeling among all parties.”

He believes that as vendors and brands sell in to travel retail and sell out involves passengers, staff and logistics, a rethink of the current travel retail concession model is required; should the chain break, all partners suffer.

Airport operators have been offering rent relief to their partners during the Covid-19 crisis. Incheon International Airport Corporation, Changi Airport Group, AENA, Airport Authority Hong Kong and Israel Airports Authority are among those to do so.

In conversation with TRBusiness during a tour of Orient King Power’s shops last year, Feng reported year-on-year increases across several of its branded shops at Shanghai Pudong.