Thailand to End Duty-Free on Arrival Shopping at 8 Major Airports

Duty-free shops in the arrival areas of Thailand's international airports will soon close down. This decision affects eight international airports, including Suvarnabhumi and Don Mueang in Bangkok, as well as airports in Chiang Mai, Phuket, Hat Yai, U-Tapao (Rayong), Samui, and Krabi.

The move comes as Thailand takes significant steps to improve its tourism strategy, with a focus on increasing domestic spending.

The three operators managing these inbound duty-free businesses have agreed to suspend operations, as reported by the Bangkok Post, citing a government spokesperson. However, the reports suggested that the government hasn't mentioned a specific date for the end of these operations.

The move is part of a broader effort to encourage travelers to spend more within the country, to boost the local economy.

Thailand Looks to Decongest Airports

This move follows Airports of Thailand's (AOT) plan to reclaim 1,400 square meters of space at Suvarnabhumi Airport and 491 square meters at Phuket International Airport from Thai travel retail group King Power and three government agencies — Immigration Bureau, Thai Customs Department and Revenue Department.

The reclaimed space would then be used to upgrade passenger facilities and decongest the airport areas. Thailand aims to rank Suvarnabhumi Airport among the world’s top 50 airports by 2025 and the top 20 within the next five years.

Last year, the airport ranked 68th.

One of the busiest airports in Southeast Asia, the government wants Suvarnabhumi airport to be able to handle 170 million passengers and serve one million flights per year by 2029.

In 2023, sales from Thailand’s inbound duty-free shops amounted to THB 3 billion ($82.9 million), according to the customs department. The government estimates that closing these shops will increase foreign visitors' spending by THB 570 per person ($15.64), per trip.

However, Moodie Davitt reports that this decision could lead to a roughly 20% drop in airport duty-free sales for major spirits brands.

Thai Tourism Push

Thailand aims to welcome around 40 million foreign visitors this year. In the first six months of 2024, the country saw 17.5 million foreign tourists, up 35% from the same period last year, generating revenue of THB 825 billion ($22.42 billion). The largest source markets were China, Malaysia, and India.

In 2019, before the Covid-19 pandemic, Thailand registered a record 39.9 million arrivals, contributing THB 1.91 trillion ($52 million) to the economy. Tourism accounted for about 20% of Thailand’s economy before the pandemic.

The country has been taking significant steps to boost inbound tourism. Last month, Thailand decided to scrap a proposal to impose a THB 300 ($8.20) tourism fee on international tourists arriving by air. Additionally, the government extended its free insurance scheme for international tourists until the end of 2024. This initiative provides medical coverage of up to THB 500,000 ($13,650) for accidents or natural disasters.

Starting June 1, the number of countries eligible for visa-free entry into Thailand increased from 57 to 93. Visitors are now allowed to stay up to 30 days and can extend their stay by an additional 30 days for a fee of THB 1,900 (roughly $52).