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Airport operator cuts rent for duty-free shop amid THAAD fallout

All News 20:15 October 18, 2017

SEOUL, Oct. 18 (Yonhap) -- A South Korean airport operator has cut the rent for a duty-free store at an airport in the country's resort island of Jeju amid a sharp drop in the number of Chinese tourists following a diplomatic row between Seoul and Beijing over a U.S. anti-missile system here, industry sources said Wednesday.

The Korea Airports Corp. (KAC) suggested 20.4 percent as the percentage to be applied to sales to calculate rent in its bid to select a new operator of the duty-free store at Jeju International Airport, according to the sources.

Previously, the rent was set at around 30 to 35 percent of sales.

The bidding is taking place as Hanwha Galleria, a retail unit of Hanwha Group, recently decided to return its duty-free business license at the airport, which was originally valid until April 2019. It is slated to operate the business until the end of this year.

Local duty-free operators have been suffering from a drop in the number of tourists after the Beijing government banned its travel agencies from selling Korea-bound package tours since mid-March in an apparent retaliation over Seoul's deployment of the U.S. Terminal High Altitude Area Defense (THAAD) system.

Lotte Duty Free, South Korea's top duty-free operator, is also in talks with Incheon International Airport Corp. (IIAC) to adjust its rental fees.

The company said it is reviewing the option of withdrawing from the country's main gateway, located west of Seoul, if the airport operator refuses to help it cope with the unfavorable market conditions.

This file photo taken on Aug. 1, 2016, shows a Seoul department store bustling with foreign tourists. (Yonhap)

This file photo taken on Aug. 1, 2016, shows a Seoul department store bustling with foreign tourists. (Yonhap)

scaaet@yna.co.kr
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