Jump to content
You are not logged in ▶️ Click here to sign-up or login ×

Thailand's King Power wins duty-free retailer auction for major airports

snoop1130

By snoop1130
in Thailand News

Recommended Posts

snoop1130 Legendary Member

snoop1130

Posted
Posted

Thailand's King Power wins duty-free retailer auction for major airports

by Chayut Setboonsarng

 

sdfre.JPG

FILE PHOTO: The headquarters of King Power Group, the nation's largest duty free retailer, is seen in Bangkok, Thailand April 28, 2016. REUTERS/Jorge Silva

 

BANGKOK (Reuters) - Airports of Thailand Pcl (AOT) on Wednesday approved King Power Group’s $494 million (£393.3 million) bids for duty-free retailing at its major airports over rival contenders, including a group of South Korea’s Lotte and Bangkok Airways Pcl.

 

The hotly-contested auction had lured international bidders seeking to benefit from Thailand’s booming duty-free industry on growing tourist numbers, and powered airport operator AOT’s revenue growth.

 

Tourist receipts account for about 12% of the second-largest economy in Southeast Asia, making it one of the most important drivers of growth, and in 2018, the country saw more than 38 million visitor arrivals, according to Thai government data.

 

Unlisted King Power Duty Free won two duty-free concession contracts and retail concessions at four major Thai airports, including the country’s main international airport Suvarnabhumi, AOT said in a statement.

 

Its winning bids came less than a year after its founder Vichai Srivaddhanaprabha died in a helicopter crash in a helicopter crash outside the stadium of the Leicester City Football Club, that he owned. His death led to analysts questioning the future of King Power’s franchise.

 

King Power, which retains ownership of Leicester City club, offered 15.42 billion baht (£392.3 million) in yearly minimum guarantee of revenue without tax, topping the Lotte and Bangkok Airways consortium’s 8.52 billion baht bid, AOT said.

 

Another group - the Royal Orchid Hotel Pcl and WDFG UK, a unit from travel retailer Dufry — made an offer for 7.26 billion baht.

 

For a separate concession contract for three major regional international airports in Hat Yai, Phuket, and Chiang Mai, King Power also outbit its rivals by offering 2.33 billion baht.

 

It also won a licence to operate commercial services such as restaurants and shops at all four airports, beating local retail giant Central Pattana with an offer for a yearly minimum revenue of 5.8 billion baht.

 

King Power’s current duty-free concession at Suvarnabhumi airport is set to expire in 2020, and the new concession will expire in March 2031.

 

AOT, Thailand’s second biggest company by market value, reported a 13% rise in concession revenue to 16.7 billion baht in the last fiscal year.

 

reuters_logo.jpg

-- © Copyright Reuters 2019-06-19
Link to comment
Share on other sites
ukrules Star Member

ukrules

Posted
Posted

Why do they run it in such an 'all or nothing' kind of way? This is not a normal way to conduct business.

 

They should allow any company to operate inside the airports and make them bid for their plots with multiple companies allowed in.

 

Zero competition is never a good idea.

 

Link to comment
Share on other sites
Misterwhisper Platinum Member

Misterwhisper

Posted
Posted
31 minutes ago, snoop1130 said:

offered 15.42 billion baht (£392.3 million) in yearly minimum guarantee of revenue without tax

That's roughly twice as much as each of the other two globally active travel retailers, Lotte and Dufry, dared to bid after, it must be assumed, careful calculations based on their decades of industry experience. You are perhaps wondering why King Power was able to tender such an outrageously inflated bid in the first place and without blinking an eye. Well, it's almost risk-free for them because in the end YOU, the traveler, will foot the bill for this so-called "guarantee of revenue." And this "guarantee of revenue" also is not going to be honored at the expense of reduced net profits for King Power, I might add.      

Link to comment
Share on other sites
Damrongsak Platinum Member

Damrongsak

Posted
Posted
11 hours ago, ukrules said:

Why do they run it in such an 'all or nothing' kind of way? This is not a normal way to conduct business.

 

They should allow any company to operate inside the airports and make them bid for their plots with multiple companies allowed in.

 

Zero competition is never a good idea.

 

Oh, come on.  If they had dozens of companies, the eventual recipients up top would have to hire dozens upon dozens of mail-room clerks to open the brown envelopes and sort it all out. Direct deposit into a numbered account in an unnamed country is the way to go.

 

 

 

 

Link to comment
Share on other sites
mikebell Diamond Member

mikebell

Posted
Posted
11 hours ago, lungbing said:

Oh, no I won't be footing the bill.

Hear Hear!  A bottle of gin is 30% higher here than in Vietnam; prices checked on the outward & inward journeys.  Guess where I spent my Duty Free allowance.  Hint: it wasn't Thailand.

Link to comment
Share on other sites
Emdog Platinum Member

Emdog

Posted
Posted
4 hours ago, Thechook said:

They are so bloody expensive it's a joke.  Stop calling it duty free because it definately is not.

It may be "duty free" but sure as heck any savings in duty are just added to the obscene profits that can be made in a monopoly selling situation. That 494 million bucks for bid fair indicator just how obscene those profits can be

Link to comment
Share on other sites
Prairieboy Advanced Member

Prairieboy

Posted
Posted

Duty-free is misleading - there are very few bargains in these shops.  To me, it implies that the price is less than one normally would pay - NOT!  Perhaps the shop owners buy at duty-free prices which then serves to enhance their profit margin.  Often it is cheaper to buy on the street.

Link to comment
Share on other sites
madmitch Platinum Member

madmitch

Posted
Posted
15 hours ago, ukrules said:

Why do they run it in such an 'all or nothing' kind of way? This is not a normal way to conduct business.

 

They should allow any company to operate inside the airports and make them bid for their plots with multiple companies allowed in.

 

Zero competition is never a good idea.

 

But with KIng Power also winning the rights to control the entire airport area, I still think there would only be one winner.

 

I've often referred to Thailand as the hub of monopolies and King Power's hold over the airports is probably the best example of all.

Link to comment
Share on other sites
Rawairat Senior Member

Rawairat

Posted
Posted

I was going to say I don't shop at any duty free in Thailand but even an over priced coffee or water will give KP a some profit, they cannot be avoided if you travel. Although I believe you can bring an empty water container in.

It's simple economics they get a monopoly and charge the travellers extra to make a profit. Captive audience and no real competition. Leaves money to buy an expensive football team. Apparently Leicester city do well from the charity donated by KP's owners, which comes from all those travellers pockets. Gives you a warm fuzzy feeling don't it, knowing how charitable we are.

Link to comment
Share on other sites
Bangkok Barry Diamond Member

Bangkok Barry

Posted
Posted
17 hours ago, bdenner said:

If I were to list the recipients of the BIG BROWN ENVELOPES l'd be a targeted man.
Apart from the obvious I'm guessing the Minister for watches and all things corrupt is 'close' to the top!

Sent from my SM-G610F using Thailand Forum - Thaivisa mobile app
 

King Power, which retains ownership of Leicester City club, offered 15.42 billion baht (£392.3 million) in yearly minimum guarantee of revenue without tax, topping the Lotte and Bangkok Airways consortium’s 8.52 billion baht bid, AOT said.

How would you do business? Accept a lower bid?

Link to comment
Share on other sites
Bangkok Barry Diamond Member

Bangkok Barry

Posted
Posted
17 hours ago, bdenner said:

If I were to list the recipients of the BIG BROWN ENVELOPES l'd be a targeted man.
Apart from the obvious I'm guessing the Minister for watches and all things corrupt is 'close' to the top!

Sent from my SM-G610F using Thailand Forum - Thaivisa mobile app
 

King Power, which retains ownership of Leicester City club, offered 15.42 billion baht (£392.3 million) in yearly minimum guarantee of revenue without tax, topping the Lotte and Bangkok Airways consortium’s 8.52 billion baht bid, AOT said.

How would you do business? Accept a lower bid?

Link to comment
Share on other sites
BobBKK Gold Member

BobBKK

Posted
Posted
27 minutes ago, Bangkok Barry said:

King Power, which retains ownership of Leicester City club, offered 15.42 billion baht (£392.3 million) in yearly minimum guarantee of revenue without tax, topping the Lotte and Bangkok Airways consortium’s 8.52 billion baht bid, AOT said.

How would you do business? Accept a lower bid?

Break up the monopoly obviously as smaller companies don't stand a chance. Anyway I never believe anything they say here.

Link to comment
Share on other sites
spidermike007 Star Member

spidermike007

Posted
Posted

King Power is very well established here. They have been earning a fortune for a long time now, and have a virtual monopoly on duty free. It is not a surprise that they won this bid. 

 

They own the tallest building in Thailand. How on earth were they going to lose this bid?

 

After many delays, the new owner of Mahanakhon skyscraper, duty-free giant King Power, has unveiled the building's 360-degree rooftop observation deck that sits 314 meters above the ground, which is currently Thailand's highest. Dubbed MahaNakhon SkyWalk, the observation triplex of three floors: the indoor observation deck on 74th and 75th, and the rooftop platform and a bar on the 78th floor—of which one of the highlights is the spine-chilling glass-bottomed platform that promises to pump up your adrenaline.    

 

 

image.jpg

Link to comment
Share on other sites
BobBKK Gold Member

BobBKK

Posted
Posted
Just now, spidermike007 said:

King Power is very well established here. They have been earning a fortune for a long time now, and have a virtual monopoly on duty free. It is not a surprise that they won this bid. 

 

They own the tallest building in Thailand. How on earth were they going to lose this bid?

 

After many delays, the new owner of Mahanakhon skyscraper, duty-free giant King Power, has unveiled the building's 360-degree rooftop observation deck that sits 314 meters above the ground, which is currently Thailand's highest. Dubbed MahaNakhon SkyWalk, the observation triplex of three floors: the indoor observation deck on 74th and 75th, and the rooftop platform and a bar on the 78th floor—of which one of the highlights is the spine-chilling glass-bottomed platform that promises to pump up your adrenaline.    

 

 

image.jpg

You must be employed by TAT as your 'love everything Thai' is monotonous bet you love the government too huh? There are a few companies (i.e. families) that own virtually everything in Thainland. there is no fair bidding process, rule of law or anything like that here. It is ALL about their God... money.

Link to comment
Share on other sites
spidermike007 Star Member

spidermike007

Posted
Posted
4 minutes ago, BobBKK said:

You must be employed by TAT as your 'love everything Thai' is monotonous bet you love the government too huh? There are a few companies (i.e. families) that own virtually everything in Thainland. there is no fair bidding process, rule of law or anything like that here. It is ALL about their God... money.

I guess you have never read my posts. Go back and read some of them. Most criticize me for being too critical! I do like some things about Thailand. Perhaps you woke up on the wrong side of the bed this morning? Besides, I was being sarcastic when referring to their monopoly. You could not see that?

 

By the way, as you can see (if you care to look), I absolutely despise the army and the government here. I have plenty of issues with Thailand. Was simply making a comment about alot of the people, who I have affection for. Sorry if that offends you! 

Link to comment
Share on other sites
tlandtday Silver Member

tlandtday

Posted
Posted
1 minute ago, spidermike007 said:

I guess you have never read my posts. Go back and read some of them. Most criticize me for being too critical! I do like some things about Thailand. Perhaps you woke up on the wrong side of the bed this morning? Besides, I was being sarcastic when referring to their monopoly. You could not see that?

 

By the way, as you can see (if you care to look), I absolutely despise the army and the government here. I have plenty of issues with Thailand. Was simply making a comment about alot of the people, who I have affection for. Sorry if that offends you! 

Nothing wrong with constructive criticism and having an opinion there are far too many apologists and wearers of rose colored glasses watching the train come down the tracks.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

Go to topic listing

  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...