Thailand’s airport duty free arrivals shops have closed. Credit: 1000 Words/Shutterstock.

The Asia Pacific Travel Retail Association (APTRA) has issued a statement expressing its dismay at the closure of the arrivals duty free business at Thailand’s airports.

Stores at eight of the country’s international airports –  Bangkok Suvarnabhumi, Don Mueang, Chiang Mai, Phuket, Hat Yai, U-Tapao, Sumui and Krabi – were shuttered on 1 August.

As reported, this was tied to a cabinet resolution on 2 July related to a Ministry of Finance proposal concerning the suspension of tax privileges for bonded warehouses on import duty free shop sales as part of a broader plan to boost spending within the domestic market.

In a statement, APTRA said: “The closure of arrivals stores at Thai airports is a disappointing blow for the travel retail industry, a sector that does not compete with local markets, given its access is only to travellers.”

Previously, inbound travellers enjoyed a duty free allowance of 200 cigarettes (or 250gm of tobacco or cigars) and 1 litre of alcohol.

Sales at arrivals duty free shops totalled Bht 3.02 billion/$82 million last year, according to customs department statistics.

“There is no guarantee this amount will directly transfer to the domestic market as shopper motivations in arrivals stores are very different to those in domestic markets,” continued the APTRA statement.

Airports of Thailand (AoT) confirmed in an announcement on 30 July the cessation of King Power’s licence to run arrivals duty free shops effective from 1 August, including the 1,871sq m of commercial space it operates at Bangkok Suvarnabhumi International Airport (BKK).

AoT estimates the closures will cost the airport operator approximately Bht 126.25 million a month in minimum guarantee payments at BKK over the 2024-2025 contract term.

Meanwhile, monthly guarantees at Phuket, Chiang Mai and Hat Yai Airport are tipped to fall by Bht 8.41m, with Don Mueang expected to shed around Bht 6.96m.

“To further make up for such revenue decline, AoT has already prepared projects to increase revenue from other commercial activities,” said AoT.

APTRA added: “Retail revenue is a vital source of non-aeronautical income for airports and is a significant contributor to investment in national infrastructure and employment.  APTRA therefore welcomes the fact that Airports of Thailand has prepared projects to increase revenue from other commercial strategies to compensate for the revenue drop.”

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