Hainan Island’s Haikou Meilan International airport has reported revenue growth of more than 20% to Rmb684m ($110m) in 2012 against the previous year owing to a 50% rise in non-aeronautical revenue to Rmb290.2m ($46.7m), mostly due to the first full year of operation for the airport’s duty-free shops.
Described by the airport as Meilan Airport Offshore Duty-Free Shop, the stores are operated by Hainan Duty Free Goods (HNDF), a subsidiary of the province’s state-owned company Hainan International Tourism Island Development & Construction, which is allowed to import duty-free goods and operate duty-free shops in Hainan province under a joint venture with HNA Group. Travel retailer DFS Group is the supplier of goods for the airport store.
The airport’s franchise income, which includes fees paid by HNDF, rose by over 115% to Rmb136.9m ($22m) last year as the shop began operations on December 21 2011. According to the airport company, HNDF achieved sales of Rmb380m ($61.1m) in 2012 and currently operates about 3,600sq m of retail space. During the 2013 Chinese New Year holiday on February 9–15, the store’s total sales reached Rmb20.31m ($3.26m), 56% above the results for the same period in 2012, while daily sales on February 15 reached the record high of Rmb4.43m ($712,590).
On January 21 the airport and HNDF entered a new franchise agreement, pursuant to which the airport will charge a franchise fee based on total duty-free sales or a fixed fee determined by the area leased by HNDF, whichever is higher. According to the airport’s financial statement, Meilan Airport Offshore Duty-Free Shop’s third phase of expansion will began this year and will add about 2,500sq m of retail space to its operation. “The existing shops will be renovated into a high-class duty-free shopping area in the airport,” the company added.
Describing the airport’s outlook for 2013, the statement said the local government will “continue to vigorously promote its key tourism projects”, adding that the current trends of operation and sales revenue at its duty-free shops are “believed to be profitable to the group”.
The airport also said that as HNDF’s operation matures, the proportion of non-aeronautical revenue is likely to further increase, especially as the company will “formulate business plans for the terminal buildings, especially with focus on the planning, monitoring and management of Meilan Airport Offshore Duty-Free Shop”.
SOURCE: dfnionline.com
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