New duty-free licenses in Seoul finally awarded

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New duty-free licenses in Seoul finally awarded

HDC Shilla and Hanwha Galleria were the winners in a contest that pitted Korea’s major retailers and hospitality conglomerates against each other for coveted licenses to operate duty-free stores in Seoul.

The Korea Customs Service said Friday it decided to give the licenses to HDC Shilla - a joint venture between Hyundai Development and Shilla Duty Free - and Hanwha Galleria. A third license was awarded to SM Duty Free, a medium-sized company.

“The decision was made based on interviews and assessments conducted by a committee of 15 people from both the public and private sectors,” the Customs Service said in a statement.

“We expect an additional 300 billion won [$266 million] in new investments and 4,600 new jobs to be created from the opening of new duty-free stores. We also expect our annual foreign tourist target of 20 million arrivals to be achieved soon.”

The Customs Service graded each bid based on the company’s management capability, supervision ability and environmental factors that included nearby tourism infrastructure, the company’s contribution to society and its relationship with small and medium-sized businesses.

HDC Shilla has plans to set up its duty-free shop at the I’Park Mall with a floor space of 65,000 square meters (121,000 square feet). It has parking capacity for 400 large tour busses.

I’Park Mall is adjacent to one of the two Seoul terminals of the KTX express trains that link Seoul with the rest of the country.

The company also has plans to boost the economy of Yongsan district, collaborating with the electronics retail cluster there to redevelop it as a major destination for foreign tourists.

Lee Boo-jin, CEO of Hotel Shilla, which operates Shilla Duty Free, has made high-profile moves prior to the decision, paying a visit to China and meeting with Chinese tour industry CEOs and government officials to ease worries about the outbreak of Middle East respiratory syndrome and to urge more Chinese tourists to visit the country.

“Our long-term road map and detailed plans to boost the regional economy and Korean tourism appear to have been received well [by the committee],” said the co-CEOs of HDC Shilla, Yang Chang-hoon and Han In-gyu, in a joint statement.

The second winner, Hanhwa Galleria, will set up its duty-free shop in the 63 Building in Yeoeuido, a 250-meter (820-foot) landmark in Seoul and one of the most popular shopping-to-entertainment arenas in the country. It is owned by Hanwha Life.

It houses an aquarium, a wax museum, a performance hall and scores of restaurants. It also has an art gallery and an observatory with an unobstructed view of Seoul and the Han River.

Even before the duty-free store, it draws 3.2 million visitors per year and about 7,000 tourists per day, 9 percent of whom are foreign, according to the company. The skyscraper was also featured in the latest Avengers movie.

The building is close to five-star hotels in Yoeuido, the Han River park, IFC Mall, and both Incheon and Gimpo airports, the main gateways to Korea.

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