South Korea’s main air gateway Incheon International Airport was unable to find tenants for concession openings as its second auction this year fell through due to low participation amid standstill in international travel.

Incheon International Airport Corp. (IIAC) said Tuesday that the openings for six concessions at Terminal 1 did not get minimum bidders for competitive auction. Only two large duty free shop operators – Lotte and Shinsegae – submitted bids for the four concessions reserved for big travel retailers. For the two concessions to be run by small and medium enterprises, The Grand was the only bidder.

Shilla and Hyundai Department Store, two of the country’s major duty-free shop operators, did not join the auction despite much anticipation. Both retailers said they will rather focus on existing businesses for the time being.

It is the second time this year for IIAC’s concession auction to fall through. Its previous auction held in March also failed to draw enough bidders due to concerns over a plunge in visitors to the airport following the implementation of travel restrictions across the world to slow the spread of the new coronavirus.

The auction was shunned even after the airport offered to shave rent by 30 percent or receive rent in proportion to revenue earned until the air traffic volume recovers to 60 percent of the pre-coronavirus pandemic level.

The IIAC is expected to reattempt the auction for the Terminal 1 concessions, but did not reveal the date.

Duty-free shop operators, wary of the protracted aviation crisis caused by the pandemic, remain conservative as the pandemic-caused international travel restrictions have profound impact to their business.

According to Korea Duty Free Shops Association, the combined revenue of Korean travel retailers stopped at 1.25 trillion won ($1.07 billion) in July, more than halved from the same month a year ago. Market watchers forecast the situation would remain bleak for a while after air passenger traffic volume has plunged more than 90 percent since the pandemic crisis emerged early this year. But it is still far from returning to the pre-pandemic levels.

Until normalcy returns to the travel industry, duty-free shop operators are expected to continue to focus on tightening up, suspending expansion and closing down loss-making outlets. Lotte Duty Free is currently liquidating money-losing outlets in Taiwan, Thailand and Indonesia.

By Pulse

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