Major airports across Asia, including in China and Thailand, are significantly overhauling how they calculate duty-free store rents. The move reflects a view that while the number of outbound travelers has recovered since COVID-19, per-capita spending has not returned to previous levels. In contrast, Incheon International Airport maintains its existing method of multiplying the number of outbound passengers by per-passenger rent, prompting criticism that changes are needed.
According to the duty-free industry Monday, Beijing Capital International Airport in China sharply lowered its sales commission to 5% in the first year under a new duty-free contract in February, down from a range of 18% to 36% by product category. The commission rate will rise to a maximum of 8% next year, and the minimum rent will also fall if passenger numbers decline.
Shanghai Pudong International Airport also reduced both its high sales commission and its minimum rent burden. Previously, operators had to pay the higher of either 18% to 36% of sales or a minimum rent. Starting this year, they pay a base rent plus only 8% to 24% of sales.
Airports of Thailand (AOT) changed its previous method, which required a set minimum rent even when passenger numbers fell. Under the revised contract, the minimum rent is lowered when passengers decrease, and when per-passenger spending exceeds a certain level, a portion of the excess is paid to the airport.
Asian airports have changed their duty-free rent calculation methods because a recovery in passengers does not immediately translate into a recovery in sales. According to the "2026 Airport Economics Report and Key Performance Indicators" recently released by the Airports Council International (ACI), global airport passengers surpassed pre-COVID-19 levels in 2024, but non-aeronautical revenue from duty-free, food and beverage, and other sources fell 9% from 2019. Non-aeronautical revenue per passenger also fell 12% to $7.57. In Korea, the number of foreign duty-free shoppers rose 28.5% in May this year from a year earlier, but purchases per person fell 13.8% to about 697,000 won.
Nevertheless, Incheon Airport insists on determining total rent by multiplying the number of outbound passengers by per-passenger rent. As a result, Shilla Duty Free and Shinsegae Duty Free demanded rent cuts last year, arguing that their rent burden was growing due to rising outbound passengers even as sales recovery lagged. When their demands were ultimately rejected, they returned their business rights. Rent for the spaces they vacated fell about 40% from the 2023 winning bid price, but the method of linking rent to the number of outbound passengers remains unchanged.
"In the past, an increase in outbound passengers led directly to an increase in sales, but now consumption patterns have changed, so passenger numbers and sales move separately," a duty-free industry official said. "The rent calculation method also needs to reflect these consumption changes."
