Thailand to Close Inbound Duty-Free Shops At International Airports

In a move to boost domestic retail and enhance Thailand’s position as a tourist spending hub, the Thai government announced plans to close duty-free shops located in the arrival areas of international airports.

This decision, aimed at encouraging visitors to spend their money within the country, is projected to generate significant revenue for local businesses.

Projected Economic Impact

The closure is anticipated to redirect an estimated THB3.5 billion (US$96 million) annually into local stores, benefiting the domestic retail sector.

According to Rudklao Intawong Suwankiri, a deputy spokesperson for the Thai Government, this decision aligns with ongoing efforts to promote Thailand as a premier destination for both tourism and shopping.

Implementation Across Major Airports

The policy will affect duty-free shops at eight major international airports:

• Suvarnabhumi
• Don Mueang
• Chiang Mai
• Phuket
• Hat Yai
• U-tapao
• Samui
• Krabi

All three operators of inbound duty-free businesses have agreed to comply with this new directive. This cooperation underscores a unified commitment to foster economic growth within Thailand by encouraging visitors to make purchases from domestic retailers rather than relying on airport duty-free shops.

Background and Rationale

In 2023, inbound duty-free shops generated THB3.02 billion in sales, according to data from the Customs Department. However, the government argues that these shops divert potential spending away from local businesses.

By closing these shops, the Finance Ministry estimates that foreign tourists will increase their spending on domestic goods by approximately THB570 per person per trip.

“The ability of travellers to buy goods from inbound duty-free shops significantly reduces their spending on local products,” explained Rudklao.

The government believes that this change will create a more favourable environment for local businesses, providing them with a greater share of the tourist market.

Timing and Implementation Details

While the exact timeline for the closure of these shops has not yet been disclosed, the government’s intent is clear: to create a more vibrant and supportive market for domestic retailers.

This initiative forms part of a larger plan to position Thailand as a leading destination for shopping, thereby boosting the national economy.

Conclusion

Thailand’s strategic move to close duty-free shops in airport arrival areas represents a significant shift in its approach to tourism and retail. By encouraging visitors to spend more in local stores, the government aims to stimulate economic growth and enhance the shopping experience for both tourists and residents.