Duty Free Shopping Huge Business For Phuket

Duty free shopping a potential Bt 3 bn business for Andaman Sea provinces

BANGKOK: -- Encouraging brand name-crazed Thais to shop at duty free outlets in the three Andaman provinces could be a Bt 3 billion boon to the local economies, a research house predicts.

As part of the plan to revive the economy of the country's tsunami-struck provinces, the Thai government has allowed duty free shops—until now exclusively available at international airport departure – to operate in Krabi, Phuket and Pang-nga, and with a new twist: Thais too can also access the shops.

Luxury goods including cosmetics, perfumes, leather products, and liquor in duty free shops are exempted from a 30 per cent import tax.

If the campaign turns out as successfully as planned, according to the Kasikorn Research Centre, it will be a three-billion baht business in which Bt 1.5 bn is expected to be earned by duty free shop operators. The other half is estimated as the sum to benefit hotels, resorts, and other local service industries that cater to tourist needs.

A continuing decline in local and international visitors is behind the innovative business development push.

Tourist arrivals in the three provinces have contracted by half when compared to the same period last year in the aftermath of the tsunami. The slump is projected to persist in the key Thai tourism markets of Malaysia, Japan, China, South Korea, Taiwan and Hong Kong.

KRC observed however that this campaign is unlikely to lure Thais to divert their own shopping destinations from Hong Kong and Singapore unless it is cheaper for them to fly and stay in the Andaman provinces. Cheap shopping fullbkard Hong Kong and Singapore abound.

And for the campaign to take off among medium-income Thais, the government will have to make the duty free shopping trips to Phuket, Pang-nga and Krabi more worthwhile than trips to department stores, said KRC.

--TNA 2005-09-09