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Lotte Hotel, Hyundai DF split rights on Incheon Airport's most lucrative duty-free zones

Published: 30 Jan. 2026, 20:42

Travelers are seen at the duty free stores inside Terminal 1 of Incheon International Airport on Sept. 9, 2025. [NEWS1]

Lotte Hotel and Hyundai DF have split the rights to operate the most lucrative duty-free zones at Incheon International Airport, ending a high-stakes bidding process closely watched by the retail industry.

According to Incheon International Airport Corporation on Friday, the two companies were selected as preferred bidders for the DF1 and DF2 zones, which specialize in perfumes, cosmetics, liquor and tobacco — the airport’s top revenue-generating categories.

Lotte Hotel will operate DF1, which includes 15 stores spanning 4,094 square meters (44,067.5 square feet). Hyundai DF will take charge of DF2, comprising 14 stores across 4,571 square meters. Together, the two zones account for the largest share of total duty-free sales at the airport.

The bidding process followed the withdrawal of Hotel Shilla and Shinsegae Duty Free, which gave up their operating rights, citing weak sales and heavy rent burdens. For Lotte Hotel, the win marks a return to Incheon Airport after a three-year absence. The company lost its previous bid in 2022.

Rents will be calculated under a per-passenger fee system introduced after the Covid-19 pandemic. Under the model, operators pay rent based on the number of airport users rather than fixed sales targets.

The airport authority set minimum rates of 5,031 won ($3.50) per passenger for DF1 and 4,994 won for DF2, including value-added tax. Lotte Hotel bid 5,345 won for DF1, while Hyundai submitted 5,394 won for DF2.

The contract period will run for about seven years, from the start of operations through June 30, 2033. Operators will take over immediately upon the expiration of the previous contracts. Under current regulations, the contracts may be extended, but not beyond 10 years in total.

The Korea Customs Service will conduct a final license review before notifying the airport authority of the official winners. Incheon International Airport Corporation will then negotiate operating conditions and finalize the contracts.

Hotel Shilla and Shinsegae Duty Free had earlier asked a court to mediate a 40 percent rent reduction, but their request was rejected, prompting them to exit the business. Only Lotte Hotel and Hyundai DF participated in the latest bid.

Industry officials say the outcome reflects cautious optimism.

“Even as passenger traffic recovers, the duty-free sector remains fragile,” one industry source said. “Reducing rent pressure is critical. The return of Lotte and Hyundai is being seen as a first step toward stabilizing airport duty-free operations.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK YOUNG-WOO [[email protected]]