By Chayut Setboonsarng
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.
(Additional reporting by Panarat Thepgumpanat and Panu Wongcha-um; Editing by Rashmi Aich)