Sharp drop in Chinese visitors, Thai luxury goods 'boss' in trouble

The sharp decline in group tours, especially Chinese tourists down more than 30%, has affected duty-free shopping malls in Bangkok and Pattaya.

Specifically, King Power - the "tycoon" of a series of duty-free and luxury shopping centers in Thailand - is streamlining its business operations by closing three branches in downtown Bangkok and Pattaya, and implementing a voluntary layoff program for employees, according to the Bangkok Post .

The move is an effort to downsize the business so that it can perform better in the long term, according to Nitinai Sirismatthakarn, CEO of King Power Group.

A duty-free store operated by King Power at Satellite Terminal 1, Suvarnabhumi Airport

PHOTO: Varuth Hirunyatheb

He said the closure of King Power Mahanakhon, King Power Srivaree and King Power Pattaya was a practical solution, in line with changes in the tourism market.

These branches were designed to attract tour groups, but sales have declined as travel habits change and more people travel independently.

Duty free shopping at airports does not face the same problem as they can still make income from individual passengers.

The group's subsidiary, King Power Duty Free Co, is also in the process of applying for an adjustment to its contract to operate five airports with Airports of Thailand Plc (AoT).

The number of foreign tourists to Thailand has fallen about 5% so far this year compared to the same period in 2024, with Chinese visitors down about 33%.

The decline has been reflected in AoT’s share price on the Stock Exchange of Thailand, which has fallen 35.6% since the start of the year. The prospect of a sharp decline in King Power’s revenue has also become a concern for investors.

Mr Nitinai, former chairman of AoT who was appointed as the new CEO of King Power Corp on June 4, said the latest decision on cost control was not related to the negotiations with AoT. Many businesses now need to adjust, not just King Power.

Employees who voluntarily leave under the layoff program will be compensated based on current labor laws and their years of service with the company, Nitinai said. The company has not set a target for staff reductions.

For employees at the three closed branches, if they wish to continue working at the company, they will be transferred to other locations. Founded in 1989, King Power is the largest duty-free store operator in Thailand.

Last month, the AoT approved an extension of payment terms for three contracts at five airports, allowing King Power Duty Free to pay the remaining balance in instalments. Payments for certain other minimum entitlements stipulated in the contract will be deferred for a further eight months.

Earlier this year, King Power sought to terminate its contracts with these five airports, citing a decline in tourist numbers as the main reason.

Source: https://thanhnien.vn/khach-trung-giam-manh-ong-trum-hang-hieu-thai-lan-lao-dao-185250724124013163.htm