THAILAND New Bangkok Airport/King Power January 2005 GOLDEN LAND

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1 THAILAND New Bangkok Airport/King Power January 2005 THAILAND S By Martin Moodie retail sector prepares to enter a GOLDEN LAND Cannes celebrations: From left, King Power International Group Deputy Chairman & CFO Aimon Raksriaksorn, King Power International Group Deputy Chairman Chulchit Bunyaketu, Chairman of Airports of Thailand Dr Srisook Chandrangsu, King Power International Group Chairman & CEO Vichai Raksriaksorn and King Power International Group Deputy Managing Director Susan Whelan One of the world s most ambitious travel retail operations is set to open outside Bangkok next year at the state-of-the-art New Bangkok International Airport at Suvarnabhumi. The airport has been prioritised as a national agenda of significant importance by the Thai government. And it will be followed by the opening of an extraordinary new downtown duty free complex one year later. Retail at both locations both duty free and tax free will be run exclusively by King Power International Group, which this year celebrates its 15th anniversary. The Moodie Report profiles two of Asia s most significant travel retail developments in many years. Delegates invited to a packed lunch gathering of senior industry executives during October s TFWA World Exhibition in Cannes had seen nothing like it. The occasion was the formal presentation of retail and commercial plans for the state-of-the-art New Bangkok International Airport due to be opened at Suvarnabhumi, Thailand this year a project prioritised as a national agenda of significant importance by the Thai government. And it will be followed by the opening of an extraordinary new downtown duty free complex one year later. We will have all sorts of Thai touches and Thai traditions, creating a unique retail language In each case the retail will be operated by King Power International Group, the dynamic Thai travel retailer that has already transformed the retail offering at Bangkok s existing international airport, despite severe architectural constraints. In Cannes Dr Srisook Chandrangsu, Chairman of Airports of Thailand and Chairman of New Bangkok International Airport Co and former Permanent Secretary of the Ministry of Transport took delegates through a video presentation 104 The Moodie Report

2 January 2005 THAILAND New Bangkok Airport/King Power of the stunning new airport, which he described as our national pride and our national objective. He vowed: We will create a unique sense of place. King Power s airport duty free and tax free offer will be operated, commendably, on a profit-sharing basis with the airport authority over a long-term contract. Dr Srisook told The Moodie Report that a partnership-based approach between airport authority and retailer was essential to the long-term success of the new airport. Duty and tax free will be based on a profit-sharing relationship, he said. Today, commercial revenues at the existing Bangkok International Airport at Don Muang represent 40% of authority revenues with aeronautical turnover making up the balance. That ratio will be reversed at the new airport, he pledged. The New Bangkok International Airport at Suvarnabhumi (or Golden Land ) will open in September The King Power Downtown Complex will open around October The airport will spearhead and consolidate Thailand s efforts to become the premier gateway and hub for air travel and aviation in southeast Asia. Heavy emphasis has been placed on non-aeronautical revenues. In Concourse D, for example, duty free and tax free shops will be located along the entire length of the 700m-long concourse. Of the 563,000sq m of floor space at the airport, more than 100,000sq m has been allocated for the retail and commercial areas. The airport can handle 45 million passengers a Distinctive temple forms highlight the branded boutiques area at the New Bangkok International Airport : A 15th ANNIVERSARY HISTORY OF KING POWER INTERNATIONAL GROUP IN THAILAND In 1989 the Tourism Authority of Thailand (TAT) awarded the licence for the first downtown duty free to King Power International Group. On 18 October 1989 the 2,900sq m TAT duty free shop welcomed the first tourists at its Pleonchit Road site, where it still operates to this day. King Power describes that early opening as a defining moment for an entire Thai industry. It adds: This close relationship with TAT has proved to be a strong one, based as it is on mutual respect and an appreciation of the respective strengths provided by the public and private sectors, with the mutual objective of promoting Thailand and its facilities. In March 1993, the company s activities extended to the international airports of Bangkok, Phuket and Chiang Mai, when the Airports Authority of Thailand awarded King Power the concession to operate tax free (general merchandise) shops at these locations. King Power s commitment to showcasing the finest arts and handicrafts available from Thailand remains a central policy of its buying and operations activities. The company s co-operation with the Department of Export Promotion, the government-sponsored OTOP [One Tambon One Product; a Tambon is a sub-district Ed] projects and other government agencies, help promote indigenous industry and the development of Thailand s reputation as a manufacturer and exporter. This has contributed to the international expansion of many local Thai companies. In 1997, the Airports Authority of Thailand awarded a duty free concession to King Power International Group, to include departures and arrivals duty free shops at the international airports of Thailand also saw the expansion of the downtown duty free business, when the Tourism Authority of Thailand transferred the operation of the 3,500sq m Thailand Duty Free Shops, located at the World Trade Centre, to King Power. In January 2002, the Airports Authority of Thailand awarded the exclusive tax and duty free concessions of all international airports to the company. Today these operations have extended to 55 outlets, encompassing a retail area of 6,600sq m. In April 2004 King Power signed a ten-year contract with the Airports Authority of Thailand for the exclusive operation of duty free shops, from the opening date of Suvarnabhumi the New Bangkok International Airport. The Moodie Report 105

3 asia pacific TFWA ASIA PACIFIC 2005, THE LEADING DUTY FREE AND TRAVEL RETAIL EVENT IN ASIA PACIFIC, IS SET TO WELCOME A RECORD NUMBER OF KEY INDUSTRY PLAYERS. The exhibition itself will boast a multitude of prestigious brands from all product categories in a highly professional and conducive environment. The week includes additional opportunities for business and networking an intensive Conference and Workshop programme, varied sporting activities and dazzling social events. So mark your diaries to be at this industry meeting point TFWA Asia Pacific May 2005 bringing business to Asia and Asia to business. Photo: O. Placet

4 January 2005 THAILAND New Bangkok Airport/King Power A great ambassador for Thailand and the Thai aviation industry: Dr Srisook Chandrangsu Right: King Power International Group Chairman and CEO Vichai Raksriaksorn year, and has the potential to expand to a capacity of 120 million. We will have all sorts of Thai touches and Thai traditions, said Dr Srisook, who spoke of creating a unique retail language at the airport. A strong emphasis will be placed on the walkthrough element of the retail offer, which will feature a range of branded boutiques as well as traditional duty free stores and other specialist stores and destination merchandise outlets. It is built on cuttingedge retail philosophies, he said. A unique passenger experience The airport design reflects the culture, heritage and sentiment of Thailand, particularly in the commercial and retail zones. The concept aims to maximise the commercial revenue opportunities from retail and optimise space utilisation accordingly. The overall design has two distinctive retail architectural elements: the walkthrough duty free shop concept and The Street concept. Several principal design tools create the retail language. 1) The temple form: this provides a harmonising framework within which individual outlets can have their own distinctive personality. This will define The Street concept, which incorporates specialised and branded boutiques, food & beverage outlets and other generic commercial or services outlets. 2) The light and ceiling detailing are a defining design feature of the walkthrough duty free area. Their function is to provide subtle way-finding for the passengers moving through the commercial areas. 3) Fins and branding blades within the duty free area use natural materials such as stone, glass and timber to convey a message of Thai modernity. 4) The materials in the commercial areas are one of the most significant elements of the whole retail concept. They are designed to reflect Thai heritage embracing elements available locally from nature. The choice of materials is designed to create a sense of place intended to distinguish Bangkok from other regional and international airports. 5) The retail plan proposes a series of eight orientation zones throughout the concourse. These are located at transitional points between the two distinctive architectural languages of The Street and the walkthrough duty free areas. They not only provide opportunities as exhibition areas but also serve to reinforce a feeling of luxury and well-being in contrast to the normally frenetic environment of an airport. The walkthrough concept Let s now take a walk through the commercial facilities as The Moodie Report 107

5 THAILAND New Bangkok Airport/King Power January 2005 they would be experienced by a passenger at level four of the international departures area. Having completed check-in, passengers can proceed to the airside departures area from any one of three commercial points in this case we assume the traveller has entered by the central point. The design concept of east and west terminals are a mirror image. The areas have been colour coded as follows: Red: duty free Yellow: The Street branded boutiques Blue: specialised retail or concept shops Green: food & beverage outlets Orange: banks Perspective one Passengers are welcomed into the airside commercial areas by a luxury display wall and gondolas offering high quality products and brands. This is the first example of the abstract temple roof structure. These are a modern interpretation of the graceful form found in traditional Thai architecture. They are made from translucent materials, providing the opportunity to uplight theatrically during daylight hours and to give a glowing atmosphere during the evening and dusk. made available without compromising on passenger flow. Three main elements characterise the architecture: circulation, branding and height hierarchy. The overall concept is to create a visually stimulating environment with world-class standards of retail display and layout which offers passengers the ultimate duty free shopping experience internationally. Perspective four Continuing on towards the gates, a new variant on The Street appears. While the abstracted temple roof is still in place, the opportunity exists for a variety of commercial outlets, such as florists and bookshops. Perspective five Orientation zones are located at transitional points between the two distinct architectural languages of the walkthrough duty free shop and The Street concepts. Each of the eight orientation areas is intended to have its own unique activity. Perspective six On exiting from the orientation zone, passengers are enveloped in the last consolidated walkthrough store. Here the range of products and brands will be differentiated from previous offers. The new retail area displays Thai forms in new ways combined with contemporary retail principles. Moving through, the passenger is drawn to the first of the orientation zones and then to The Street. Perspective two The Street incorporates an interpretation of traditional Thai architecture blended with modern boutique retailing principles. The shop-front style precinct houses a variety of offers, ranging from speciality stores to individual boutiques and luxury brands as well as café and bar facilities. The key features are the abstracted temple roofs and the mainly timber-clad icons. Each brand is provided with a tenancy shell and may brand their shop within the overall design guidelines of the retail concept. As the passenger leaves The Street, he/she encounters the next orientation zone which again sees a further unfolding of Thai culture. Perspective three The walkthrough duty free area ensures the traveller is fully encompassed by the retail environment. Offers are 108 The Moodie Report

6 January 2005 THAILAND New Bangkok Airport/King Power The airport of tomorrow today Airports of Thailand and the New Bangkok International Airport Co promise that the commercial and retail design concept will provide a varied and exciting environment for all passengers at Suvarnabhumi Airport. They aim to create a truly Thai shopping experience. They describe Suvarnabhumi as the golden gateway an amazing complex that is so much more than the sum of its parts. They also call it the airport of tomorrow. But very soon it will be the airport of today. The King Power complex is set to become a must see attraction for tourists and Thais alike TURNING ON THE POWER DOWNTOWN King Power Group Deputy Chairman Chulchit Bunyaketu then presented to Cannes delegates a virtual preview of the King Power Downtown Complex. The foundation stone of the operation was laid on 18 October The landmark complex is in keeping with the company s philosophy to highlight the finest elements of contemporary Thai design and styling, while remaining true to the rich heritage and culture of the Kingdom of Thailand. It is located in the heart of Bangkok at Sri Ayutthya Road, adjacent to the new international airport train terminal, Makkasa railway station. A high-speed train connection will ensure rapid passenger transfer between Suvarnabhumi International Airport and downtown Bangkok. The 12-acre plot will be the future site of the group s headquarters, a new flagship downtown duty free shop, a 400-room hotel and an entertainment and restaurant complex. Construction is phased in two parts with the office, duty free and entertainment elements scheduled for completion by October 2006 and the hotel to be opened by February The central eight-storey main building will incorporate the duty free. This will occupy two floors with a total retail area of 12,000sq m. After shopping, visitors will be able to relax and enjoy a cultural Thai show or fine dining. The entire complex is designed to provide shoppers with a world-class retail experience that is uniquely Thai. It provides underground parking for one thousand cars while the parking area for coaches has a capacity for 40 vehicles. A tree-lined boulevard and water feature connects the main complex with a 21-storey luxury hotel. The total construction investment is US$75 million, which King Power said is evidence of its long-term commitment to the development of downtown duty free shopping and tourism-related activities. It added: The complex is designed to be a one-stop venue for tourists. The duty free shops will provide an array of international branded luxury goods and the finest local handicraft products. Laying the foundation of a glorious future: King Power International Group CEO Vichai Raksriaksorn at the October 2004 ceremony In retail design, merchandising and product planning, the complex has been designed to target both FIT and group tour customers. Highlights include: The signature architectural element of the project is the magnificent glass-walled crown atrium, inspired by ancient Thai gold ware motifs. Featuring a striking, light-filled environment, it is set to be a future landmark of the Bangkok skyline. The shopping complex s stunning façade encompasses The Moodie Report 109

7 THAILAND New Bangkok Airport/King Power January 2005 the placement of lower height merchandise display units closer to the circulation paths. Display unit height increases towards the branded and personalised back walls. This is designed to ensure the customer has a clear view of all the products and displays in a luxury ambience. Artist s impression of the spectacular new King Power Downtown Complex signature two-storey windows. These will be personalised to provide the first and highly visible indicator of the range of luxury brands within. The 400-room hotel occupies a dedicated 21-storey building. King Power will shortly announce the international hotel chain that has been appointed to manage the day-to-day operations and branding. The King Power headquarters is connected to the atrium entrance lobby by glazed elevators and escalators. The view from the lobby reaches the full eightstorey height. Moving instore The visitor s first impression of the store is on the approach to the main building, along a tree-lined avenue. After a central drop-off point, tourists proceed along an interior colonnade where they get a glimpse into the ground floor the Thai speciality area. At the end of the colonnade, the visitor is greeted by the dramatic atrium with escalators leading directly to the second-floor duty free shop. The atrium is designated as both a permanent exhibition area and also the location for all visitor pre-registration and issuing of shopping cards. The 8,000sq m duty free store uses progressive retail principles. The walkthrough concept utilises cuttingedge display systems and modern materials. Entering the store, the visitor is greeted by an array of branded boutiques on their left hand side and the cosmetics and fragrances department to the right. Retail zones will be demarcated by the use of vertical blades finished with natural materials such as stone, timber and glass. Height hierarchy is integral to the retail approach with King Power says that the fragrances and cosmetics sector is unparalleled in its scope with large areas available for product launches, promotions, make-up consultations and skincare treatments. Throughout the retail area 30sq m voids are interspersed to provide a stunning architectural feature. They also ensure clear visibility through both floors of the shopping area. In the duty free, a gourmet food and Champagne bar serves to separate the retail zones and provides a very luxurious respite area. The orientation of the path curves around to the watches and accessories areas and then to the liquor, tobacco and confectionery sectors. This ensures continuous footfall throughout the commercial area. Commitment to Thailand An exclusive lounge for King Power members is located at the rear of the main shopping area. After completing their duty free shopping in the liquor section the customer then has the option to travel down the escalator to the ground-floor Thai handicrafts area. The entire ground level of the building is dedicated to showcasing local Thai products. King Power said that its commitment to supporting the promotion of indigenous handicrafts is a very central policy of the buying and retail operations departments. The duty free complex is designed to weave a rich tapestry of architectural elements together to compose the amazing shopping experience. The sense of unfolding and discovery along the journey is designed to totally engage the customer consistent, the company said, with its philosophy on customer services and cutting-edge retail principles. The company concluded: The King Power complex is set to become a must see attraction for tourists and Thais alike. It makes a resounding statement of our commitment to Thailand s tourism industry and is a very real testament to Thailand as a progressive and innovative nation. 110 The Moodie Report