Duty-free industry revs up for recovery

As South Korea is gearing up to restrictively allow free travel on the back of vaccination progress, duty free shop operators here have set to reorganizing their offline services in anticipation of business normalization, industry data showed Tuesday.

Lotte Duty Free has recently renewed its website and mobile app, adding preorder functions for products that are out of stock, according to officials.

It is also working on introducing an offline duty free store exclusively dedicated to a limited range of luxury brands, offering shopping convenience for high-end purchasers.

With overseas stores in Guam and Singapore preparing for full-time operations, the brand‘s Changi Airport branch may hold its delayed grand opening ceremony that was originally scheduled for the first half of last year.

Shinsegae Duty Free has renewed its online membership system, changing the conventional five-tier system to a four-tier one, reducing the minimum total purchase amount, and adding the date of purchase requirement, officials said Tuesday.

For instance, in the past, users had to spend $50,000 or more over two years in order to qualify for the top level membership, but will henceforth have to spend $40,000 or more during the same period, given that their purchases have taken place on four separate days or more.

“These renewed membership requirements have been introduced in order to offer more benefits to frequent customers,” an official said.

Hyundai Department Store Duty Free is set to renewing its website in September, seeking to improve user experience.

The optimistic moves in the duty free retail industry come as the government moves to reinvigorate the outbound travel by allowing quarantine-free group tours to the vaccinated and forming a so-called “travel bubble” with a selected range of relatively safe countries.

Last week, the Ministry of Land, Infrastructure and Transport and the Ministry of Culture, Sports and Tourism unveiled plans to allow quarantine-free travel to countries that have secured sufficient antivirus measures.

Embracing the government’s alleviating signal, Asiana Airlines on Monday said that it will run a weekly air route to Saipan starting July 24, marking the first international travel resumption since March last year.

“We expect that this will mark the start of the recovery of global tourism and aviation industry,” said an official at the company, adding that further air routes will be resumed throughout the year.

The nation’s flag carrier Korean Air is currently selling tickets for the Incheon-Guam route that will be run on a daily basis, starting November.

Other low-cost carriers such as Jeju Air, Jin Air, Tway, and Air Seoul have also taken similar steps, phasing in their international air routes.

While air carriers have mostly focused on nearby destinations, the travel industry is increasingly rolling out long-distance travel packages to Europe.

Meanwhile, 15,983 passengers took non-landing tourist flights during the first half of this year, spending a combined 22.8 billion won ($20.4 million) on duty free shopping, according to data compiled by the Korea Customs Service.

Earlier this month, travel agency YB Tour and CJ OnStyle jointly came up with a package tour to popular European countries -- which sold out within an hour of their release on a local home shopping channel.

By Bae Hyun-jung (tellme@heraldcorp.com)