HKIA issues core duty-free tenders

Nicole Mezzasalma

15-Aug-2011

Hong Kong International airport has launched three tenders covering the liquor and tobacco, perfumes and cosmetics and general merchandise concessions

Hong Kong International airportHong Kong International airport (HKIA) has invited duty-free retailers to take part in its three core concession tenders, covering the operation of liquor and tobacco, general merchandise and perfumes and cosmetics shops at the location. Although the tender invitations do not specify the length of the contracts, interested parties have until October 28 to apply.

The general merchandise contract covers 10 outlets ranging in size from 56sq m (602sq ft) to over 750sq m (8,072sq ft), totalling about 2,570sq m (27,663sq ft) of retail space. One of the outlets is located in arrivals, with the remaining stores located in the main departures areas on level 6 and in the North Satellite concourse.

HKIA said that its airside general merchandise stores have a penetration rate of 75% and that average customer spend on the category is HK$888 ($114). The contract features an “eclectic mix of product categories and a balanced mix of high-end and medium-priced brands to cater to sophisticated and diverse customer demand”. The general merchandise concession is currently run by Nuance-Watson (HK).

The liquor and tobacco contract, meanwhile, comprises 15 outlets spanning between 56sq m (602sq ft) and 770sq m (8,288sq ft) and totalling about 2,730sq m (29,385sq ft) of retail space. Four of the outlets are located in the arrivals hall pre-immigration while the remaining 11 stores are spread out in the departures zone.

According to HKIA, liquor and tobacco have a 46% penetration rate at the airport and average spend in these categories is HK$608 ($78). The airport added “both luxury ranges and mid-priced popular brands are in high demand”. Travel retailer Sky Connection currently holds this contract.

Finally, the beauty contract includes 13 stores ranging in size between 24sq m (258sq ft) and over 740sq m (7,965sq ft) to total about 2,240sq m (24,111sq ft) of retail space. Two of the 13 outlets are located in arrivals, while the rest are departures shops.

HKIA said the fragrances and cosmetics category enjoys penetration rates of 50% and average customer spend of HK$1,050 ($135), making it “a key attraction” at the airport. It added that the category continues to represent high growth potential at HKIA due to customer demand. Nuance-Watson (HK) is also the current operator of this concession.

Full information about each tender opportunity can be found on HKIA’s website.

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(24-Aug-2011) - The contracts will run for five years with an option to extend for a further three
(7-Nov-2011) - Airport Authority Hong Kong has received 20 tender proposals from 11 international and regional operators for its three core concessions
(1-Jun-2011) - A survey of over 2,000 passengers conducted earlier this year reveals high penetration rates at Hong Kong International airport
(28-Aug-2009) - The duty-free liquor, tobacco, general merchandise, fragrances and cosmetics contracts at Hong Kong International airport will now run until 2012
(1-Nov-2011) - Airport Authority Hong Kong revealed details of the evaluation and selection process for the duty-free perfumes and cosmetics, liquor and tobacco