Duty-free shops at Incheon airport to pay full rent from next year

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Duty-free shops at Incheon airport to pay full rent from next year

Published: 09 Dec. 2022, 15:46

Passengers walk around the duty-free section located in Terminal 1 of Incheon International Airport. [NEWS1]

Duty-free companies will soon no longer be able to enjoy cheaper rent at Incheon International Airport as the airport cuts down on discounts starting next year as international travel recovers.

Incheon International Airport Corporation sent an announcement to seven duty-free companies — The Grand Duty Free, Kyung Bok Kung Duty Free, City Duty Free, Shinsegae Duty Free, Hyundai Department Store Duty Free, Lotte Duty Free and Hotel Shilla — about a change in its rent discount policy at the airport.

Starting next year, duty-free branches at Incheon International Airport will only be eligible for rent discounts if travelers at the airport that month fell by more than 40 percent compared to the same month in 2019. If the rate of decrease is smaller than 40 percent, companies will not get any rent discount for that month.

Based on a policy implemented to help industries struggling from the pandemic in September 2020, duty-free branches at the airport were eligible for rent discounts until passengers recovered to 80 percent of 2019 levels.

The rent discount rate was equal to the rate of decrease in passengers, but starting next year duty-free companies will receive a rent discount by half of the rate of decrease in passengers. For instance, if passengers in January next year fell 45 percent compared to the same month in 2019, the rent will be discounted by 22.5 percent, down from what would have been 45 percent now.

There were 2.68 million passengers traveling through Incheon International Airport in November, down 51.9 percent compared to the same month in 2019. However, passenger numbers are rapidly increasing, with the figure rising 16.4 percent on month.

Regarding the change, Korea Duty Free Shops Association retorted Friday that it is too early to cut down on rent discounts because duty-free purchases didn’t recover as much as international travel itself.

According to the association, the number of duty-free product pick-ups at Incheon International Airport in October remained at 3.5 percent of October 2019 levels.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]