APRIL 2020 / V18 N223
Silver Anniversary. Silver Lining. We are humbled to have earned AXN’s Best
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Overall Retailer Award for an unprecedented 25th consecutive year, in addition to the Best Brand Restaurateur for Chick-fil-A and Retailer with the Highest Regard for Self-checkout kiosk from The Goods @ ATL
Customer Service for the 20th time. Since the inception of these awards 25 years ago, we have encountered great highs, as well as some unique challenges. As a result, in this unprecedented level of adversity we are now facing, we know our industry is resilient and that our airports, brands, ACDBE partners, fellow concessionaires, and our team will collectively rise to the occasion and thrive again very soon.
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Experience new horizons, every day
WE CONTINUE TO BE INSPIRED BY THE PEOPLE AROUND US. Our associates, who do everything they can to ensure the safety and health of travelers. Our guests, whose random acts of kindness are inspirational. Our airport partners, who have made incredible gestures to ensure the long-term viability of our industry. These trying times will be difficult, but as leaders we must all persevere and do everything in our power to support our associates, team members, and the communities we serve. Let’s all be vigilant and remain safe during these difficult times. We will get through this together.
Serving the World, One Guest at a Time. WWW.MCA-AIRPORTS.COM
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305.871.0559
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18 Sick Of It
26
30
COVID-19, more commonly known as the new coronavirus, has reached pandemic level, and the industry is reeling.
22 Outside The Box
Guests are delighting in the growing number of American airports that offer outdoor spaces and amenities for travelers.
26 Winning Awards and Taking Names
The final night of the Airport Experience Conference saw the crowning of several industry innovators for professional excellence in 2019.
28 Zoom In
A look back at the 2020 Airport Experience Conference in Denver, CO, in photos.
30 Conference Highlights
The Airport Experience Conference brought three days of educational sessions populated by industry decision-makers and heavy-hitters to Denver, CO.
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6 Letter From The Editor-in-Chief 8 Latest Buzz
Memphis International’s modernization of its B Concourse will help it fully transition to an O&D airport.
12 Director’s Chair
Albuquerque International Sunport’s Nyika Allen is upgrading through technology. Next up is a new concessions program.
43 One-on-One: Carlos Bernal
As the new CEO of Areas USA, Carlos Bernal wants to focus on operations throughout the company’s portfolio.
45 One-on-One: James Obletz
Delaware North’s Travel Division is now helmed by James Obletz, whose eye is on growth and development.
47 Advertising Index 48 Before You Take Off
Some U.S. airports are in the early stages of integrating automated, driverless vehicles into their operations.
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Out of this world Passion
for a Taste of Place
SSP America’s Flying Saucer, located in DFW’s Terminal D, is a tribute to the region’s beloved Flying Saucer Draught Emporium—an out-of-this-world craft beer experience. And, SSP America’s team is known for their out-of-this-world service. They do their part to raise passenger expectations by bringing a daily ‘taste of place’ to the Airport. Each Flying Saucer employee is trained in extensive beer knowledge and has to pass exams about beer making, as well as unique crafting methods and each beer’s distinctive properties. The result is a team steeped in the art, science and passion for all things beer.
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Supporting local farmers, suppliers and our team has never been more important. We support our communities by bringing local restaurants and purveyors into airports. Now, more than ever, we are proud of this important tenet of our business. As we navigate tough times, we pledge to stand by our extended family; our teams, suppliers and farmers. We are honored to bring their best offerings to our guests.
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WE SEE MORE THAN A FAMILY PHOTO,
WE SEE THE FUTURE OF GENERATIONS TO COME Our dad, W.A. James, Sr., had two great loves: family and food. When he opened his first restaurant in an airport 35 years ago, he dreamed of sharing his passion for great food served fresh with people from all over the world. He never forgot the thrill of achieving his dream, and he instilled the joy it brought into the next generation of James family members.
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© 2020 LaTrelle’s Management Corporation.
best airports & concessionaires
2017 & 2019 AXN AWARD WINNER BEST ACDBE OPERATOR IN US AIRPORTS LATRELLE’S MANAGEMENT CORP.
Today, LaTrelle’s has grown from a single gourmet bakery operation into a trusted leader in the restaurant industry with a diverse portfolio of beloved national, regional and local brands, operating in airports across America. Although much has changed in 35 years, some things never will. The second and third generation of James family members are cultivating big dreams for LaTrelle’s, and each is as passionate about family and food as the man who started it all. Learn how we can bring your airport measurable success, call Chris James at 281.359.9959, or visit latrelles.com.
ACDBE
04/2020
Dear Readers, APRIL 2020 / V20 N223
As I write this letter in mid-March, the entire industry is in uncharted waters. In the space of just a few weeks we’ve gone from being a fastgrowing industry to a sector that will need life support to survive. Airports, concessionaires and all the businesses that support them are grasping for the remnants of the business while trying to figure out a way forward in these unprecedented times. By now, you will have noticed the sharp increase in daily reporting on the Airport Experience News website. The AXN editorial team is working hard to bring all of our readers the latest developments in the fast-changing business environment we now live in. We remain committed to serving this industry and will continue to partner with you as a platform for news and discussion. This current issue of Airport Experience News seems to harken back to an easier time. One month ago, we were all gathered for the annual Airport Experience Conference. Through photos, coverage and commentary, this issue commemorates the vibrant community that we are. This issue also contains content and interviews conducted ahead of the COVID-19 pandemic, when the outlook was decidedly brighter. In the coming months the AXN editorial team will be exploring the fallout from this crisis on every aspect of the aviation business. We welcome your insights as together we navigate back to growth. Best regard,
Carol Ward Editor-in-Chief Airport Experience News
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us.areas.com @areasusa
Bud & Marilyn’s is inspired by the 1970s in America. This is Chef Turney’s homage to her grandparents Bud & Marilyn and Areas brings it to PHL. Guests are transported back to the 1970s in this restaurant that has a quirky, vintage vibe and serves up comfort food with the chef’s signature twists. Bud & Marilyn’s is a 2020 Airport Experience Award winner for both Best New Restaurant and Best Local-Inspired Restaurant.
LATEST BUZZ
MEMPHIS APPEAL The $245 Million Concourse B Modernization At Memphis International Solidifies Hub To O&D Transition BY DAVID WARD
Above: The Concourse B modernization at Memphis International Airport is focused on maximizing space for use in an origin and destination airport, including expanding the hold rooms to allow for more passengers flying on larger aircraft.
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ike many airports, Memphis International Airport (MEM) was originally designed for a different time – in this case, the era of regional hub airports connecting to both large and small markets by smaller aircraft. That model began crumbling more than a decade ago, and hit MEM a bit later, in 2013, when Delta Air Lines ended its hub operations. MEM struggled for several years before beginning to grow again, this time as predominantly an origin and destination airport. The new model means a new approach, which prompted the current $245 million Concourse B modernization that began in 2018. Scott Brockman, president and CEO of the Memphis-Shelby County Airport Authority, says the revamp was necessary to meet the needs of the airlines serving the market. “We were predominantly a Delta/ Northwest hub,” he recalls. “We had CRJ-200s 50-seaters, Saab 3400s, 34c twin turbo prop and maybe 20 percent of our total
L
activity was mainline aircraft. You could get away with a hold room that was maybe 30 feet long and 20 feet deep from the walkway. “There’s also the fact that this is a 60-plus year-old building and it is not compliant with current seismic code,” Brockman adds. “We are within 115 miles of the New Madrid Fault Line and we need to get our facilities up to current code.” The modernization project began in 2018 when airport officials closed Concourse B, requiring Delta and Allegiant Air, both of which had been using the terminal, to move to either Concourse A or C. When the modernization is completed in early 2021, all carriers will be moved to Concourse B. Concourses A and C will be closed, though gates will be retained to accommodate future growth.
Consolidated And Modernized The modernized concourse will feature higher ceilings, larger gate areas, moving walkways and increased natural lighting. Other passenger amenities include a children’s play area, a stage for live music in the Rotunda, additional lounge areas and additional charging stations. “We’ll have a lot more elbow room when we move all carriers to B,” says Brockman. Though there will be multiple food options on other parts of the concourse, Concourse B will also consolidate many of the airport concessions into one main shopping and dining space, including a sit-down restaurant and a mini-food court in the Rotunda, which is the center of the Y in the concourse design. Brockman says the airport will not be issuing any RFPs or RFQs for any new concession opportunities. “When we were ‘de-hubbed,’ we had five concessionaires across three concourses, three food and
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LATEST BUZZ
two [retail],” he says. “Over the course of the de-hubbing process, three of our concessionaires notified us that they were not interested in extending their operations here and supporting us through that struggle.” The two that remained are HMSHost and Paradies Lagardère. “Because of that, we have chosen to reward them an extension to those contracts and we’re currently negotiating them,” Brockman says. “Now that we’re recovering and growing every year, everyone wants to get back in. But is that really fair?” The exact concession mix is still being developed, but Brockman says a new approach is in order. “We’re no longer a transfer hub with 80 percent of passengers getting off one plane and onto another – we’re 100 percent origin and destination, which means our passengers are actually already seeing and eating in the city,” he says. “So, it won’t be as important for us to highlight the Memphis barbecue and Memphis restaurants, though we will have them. We will also include a mix of nationwide brands that will offer a different flair than before.” He adds that MEM has long had a robust ACDBE program at the airport and plans to continue those efforts when Concourse B is reopened. “Paradies in their last contract had a joint venture and they are talking about moving forward on that,” he says. “Our contracts going forward will encourage that kind of participation.”
Future Plans When Concourse B is up and running, both the A and C Concourses will be closed. The airport will have the ability to re-open one or both should traffic increase dramatically, though Brockman says any re-opening would also have to include a seismic upgrade. “We’re going through a masterplan process that will identify the highest use for those facilities,” he says. “The initial growth will occur on the third leg of the B which is not being upgraded now. Then we will have the ability to turn to the A location or C location, depending on the masterplan and our growth.” The total construction cost for the B Concourse is expected to be approximately $245 million and funding includes general airport revenue bonds, state and federal grants, Passenger Facility Charges (PFCs) and other capital funds from the airport authority.
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Left, Top: The Concourse B modernization at MEM will consolidate most of the airport’s concession offerings in the Rotunda area, including a bar and sit-down restaurant as well as retail stores. Left, Below: When it opens early next year, the modernized Concourse B will feature higher ceilings, larger gate areas, moving walkways, increased natural lighting and amenities such as a children’s play area, a stage for live music and additional charging stations.
The modernized concourse should greatly enhance the traveler experience, but Brockman says, “It’s not a marketing tool for additional flights. What will drive new flights is the marketplace. We’re working hard to educate our airline partners – future or current – about the demand that exists and the markets that could warrant additional flights.” Memphis is perhaps best known as the home of Elvis Presley, and Graceland is still the second most visited home in the U.S. But Regena Bearden, chief marketing officer for Memphis Tourism, points out that, as the place that helped launch B.B. King and Johnny Cash as well as the home for Memphis Barbecue and soul food, the city has plenty to offer music fans, foodies and even history buffs. The city of Memphis hosted 12.4 million visitors in 2019 - up 5.2 percent year-overyear, Bearden says, with many of those national and international tourists arriving by air. The airport itself registered 4.64 million passengers in 2019, an increase of 5.09 percent over 2018 and the 5th straight year of passenger growth for the airport. “Most of our collaborations with the Memphis and Shelby County Airport Authority are specifically focused on datadriven air service development,” Bearden
says. “When you factor our visitor tracking capabilities into the data and industry expertise already in-house at the MSCAA, we’re able to make persuasive, compelling pitches together that really stand out. Of course, when a new route is announced, we also coordinate on ensuring that that route is successful – through PR blitzes, social media marketing and other targeted marketing campaigns.” Bill Dunavant III, president and CEO of Dunavant Enterprises, and a member of the Memphis Chamber of Commerce, points out that the city is the home of FedEx, AutoZone, International Paper and other major firms, along with being in the heart of one of the nation’s largest agricultural and food production regions. “Memphis has seen a recent uptick in new company expansions and relocations that we expect will continue into the future,” he says, adding MEM’s modernized terminal will create a great first impression for businesses looking to locate in the area. “More business means more business travelers. With a significant convention center renovation under way and slew of new hotel rooms coming online downtown, we expect even more investment in our city, which should translate to more air service.”
DIRECTOR’S CHAIR
MAKING HEADWAY
ABQ In Planning Stages For New Concessions Program, New Technology BY CAROL WARD
Above: Nyika Allen, aviation director, City of Albuquerque
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ditor’s Note: Nyika Allen was appointed aviation director for the City of Albuquerque in February 2018. New to aviation, Allen joined the airport from the New Mexico Technology Council (NMTC) where she served as president and CEO. Since taking the helm, Allen has overseen the refurbishment of the landside portion of the terminal, has worked to expand air service and is assessing and upgrading both customer-facing and back-of-house technology, among other things. Well before the COVID-19 outbreak accelerated in the U.S., Allen spoke with AXN’s Carol Ward about her goals for Albuquerque International Sunport (ABQ).
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WARD: You are relatively new to the aviation industry. Can you tell me how you landed in the director role at Albuquerque International Sunport? ALLEN: I was drawn to the industry mostly by luck. The mayor and I had discussed the aviation industry and he needed a good leader at the airport. I did kind of jump in without knowing all that much. At university I got my degree in international management. I had always been a huge traveler. I think I was much more drawn to aviation for what it can do and how it can bring people from across the world together. I love being a passenger and I love talking about the passenger experience – that’s kind of what drew me to aviation in the first place. It’s a very exciting, dynamic industry. WARD: What are your key goals for ABQ? ALLEN: Luckily, I came into an airport that was very well run and had very strong financials. We have a few really big things that are coming up. We have an 80-acre plot of land now from a runway that we decommissioned, and we are turning that into a business park called the Aviation Center of Excellence. I’m very excited about the potential of that site and potential both for the airport and for the city of Albuquerque. Also, I absolutely love technology. One of the things that I realized about our airport when I started here was that we were a little bit dated when it came to technology. And now, in the airport world, technology seems to be touching everything that we do – everything, from asking passengers how clean the bathroom is to securing our airport on a day-to-day basis. We are looking at what efficiencies we can find through IT infrastructure upgrades and we’re doing projects all across
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DIRECTOR’S CHAIR
the board. We are looking at upgrades in our parking garage, we’re doing security, IT infrastructure upgrades, and we’ve done some upgrades with common-use systems already in ticketing area and at the gate. One thing we’re mindful of as we go through our IT upgrades is how we maintain our sense of culture and our sense of place. That’s been a fun exercise for myself and my team, working through modernizing something while maintaining [the local feel]. WARD: Can you set the stage in terms of passenger numbers? Are you in growth mode? ALLEN: We grew about 9.4 percent in calendar year 2019, so it’s an exciting time to be in Albuquerque. We definitely got hit by the [Boeing 737] MAX issue, but hopefully that can be resolved soon. One of the other exciting things is that every time we get numbers from our airlines, they really anticipate [adding more service]. On the economic development side for the city, there’s been a lot of new industry in film. We just brought a Netflix office and an NBC Universal office here to New Mexico. I think things like that are driving a lot of our traffic, and we’re focusing on continuing
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Above: Albuquerque International Sunport executives are planning concessions changes, with current contracts expiring in 2022.
Below: A recent redevelopment at Albuquerque International Sunport brought upgrades throughout the non-secure side of the terminal.
DIRECTOR’S CHAIR
to bring more companies in all the time, through the city and their economic development department. We partner with them whenever we can because we know that that ends up butts in seats and people on planes. WARD: I believe you have a terminal project underway, correct? ALLEN: We’re just wrapping up our big terminal improvement project. This really is the first major renovation that our airport has seen in 30 years. We upgraded the whole non-secure side of the terminal and we did everything from lighting upgrades, HVAC, new ticket counters, updated baggage claim. We did some more shading and shelter on the outside. We rehabbed concrete. Right now, we’re looking at about $33 million for the project. We’re very excited to get it over with. No one likes being under construction at all times and it was a bit of a long time coming, but we’re really happy that it should be wrapping up [in Spring]. WARD: What’s the latest on your concessions program? ALLEN: We have some major contracts that are up in the two or three years, including contracts for both food and beverage and
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retail, as well as our airline contracts and our rental car contracts. It’s very exciting because we’re able to take the time right now and think through what we want to see in our airport moving forward. We’re two to three years out on most of them and we’re already knee deep in planning. WARD: When do the concessions contracts expire, and who are your current operators? ALLEN: They expire in 2022. Right now, we have Hudson and we have Stellar [for retail]. We have a local firm that manages our whole food and beverage operation called Fresquez Companies. WARD: Do you anticipate a departure from what you’re currently doing in your next concessions iteration? ALLEN: We haven’t officially planned yet, but we are taking steps to figure out the plan. Last July we did the airport’s first ever passenger intercept survey. We asked passengers a variety of questions about the concession program specifically, what they thought about it, what they wanted to see more of… We’ve been working through those questions and we are working to build a new program that addresses a lot of what people talked about in that survey.
We also have been working on some space planning. This airport really hadn’t been touched in about 30 years. We have a pretty significant amount of square footage that’s pre-security. We are very interested in looking at how to potentially change that or how to add square footage to the secure side of the terminal. One thing we love about our program right now is it does a good job of reflecting New Mexico, in the types of foods that we sell and the items available in the retail mix that we have. And so, we want to definitely continue to have that really great representation and maybe even dive into it a little bit more. We’ve also been looking at popular restaurants in the community, and at popular stores in the community and are starting to think about how we bring some of that flavor into the airport.
Below: Prior to the COVID-19 pandemic, Albuquerque International Sunport was performing well with 9 percent growth in 2019.
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SEEKING RELIEF Airports And Concessionaires Seek New Way Forward As Coronavirus Guts Industry BY ANDREW TELLIJOHN AND CAROL WARD
Above: Many airports, including Orlando International Airport (pictured), have expanded cleaning and disinfecting regimens in an effort to curb the spread of COVID-19.
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Editor’s Note: At press time, the North American aviation industry was in the depths of the coronavirus crisis. Domestic flights were continuing – albeit at lower frequencies and often with abysmal load factors – and international flights had been curtailed from most major world regions as government officials scrambled to control the spread of the virus. The following article provides insight into the state of play as of mid-March. Please check the Airport Experience News website for continuing information on this shifting story. North American airports and concessions operators have moved into crisis mode as the spread of COVID19, otherwise known as the coronavirus, continues to shake the industry. As of March 16, preliminary assessments by the Airports Council International – North America (ACI-NA) suggest U.S. commercial airports will lose at least $8.7 billion in calendar year 2020. Passenger
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traffic volume at U.S. commercial airports is estimated to decrease by approximately 68 percent in the March to June period, which translates to about a 49 percent decrease in the first half of 2020 and 31 percent for the full year, compared to forecasted 2020 levels without COVID-19. In absolute terms, in the first half of 2020, total passenger enplanement is anticipated to decrease by 222 million and 285 million for the full year. And without passengers, concessionaires are floundering. The massive disruption to business prompted concessionaire trade groups to seek relief in an effort to stem financial losses. The Airport Restaurant & Retail Association (ARRA) and the Airport Minority Advisory Council (AMAC) joined together to urge both airports and the U.S. Congress to act. Patrick Murray, president of the ARRA Board and executive vice president of SSP America, paints a dire picture of the concessions industry as the crisis deepens. “Things are literally changing by the hour,” he says. “As of last Thursday [March 12], the business had lost about one-third of its sales – and I’m generalizing with the various components of our business: duty free, retail, and food and beverage. By Sunday [the losses] had grown to about 50 percent, and by yesterday (March 16) we had lost another 5-8 percent of the business. “You’re essentially looking at the airport business channel that we have coming to an almost grinding halt, with us losing 80 percent, 90 percent or perhaps all the sales for some period of time, plus not knowing what’s in front of us.” ARRA and AMAC represent a $10 billion industry made up of firms of varying sizes, including many small and local businesses, which contribute $2.5 billion to airport revenue streams. Together these businesses employ more than 125,000 workers in U.S. airports.
The associations together are asking for relief from both airports and the federal government. The groups are asking airports to: • Waive rent, other fees and the imposition of penalties for at least six months with the opportunity to extend depending on the extent and impact of the crisis. • Suspend and defer concessionaires’ capital investment requirements. • Provide operational flexibility including, but not limited to adjustments to operating hours, locations and menus/product selections, as well as selective temporary closing of stores and restaurants in order to better align with passenger volumes and flows and reduce the impact on employees. ARRA and AMAC acknowledge that many airports have worked individually with concessionaires to alter lease terms and other requirements. “Many of our airport partners have tried on their own to come to our support and defense,” Murray says, noting several instances of elimination of the minimum annual guarantee, alteration of operating hours and other efforts. “There is a lot of communication that has to go on. We’re just asking that everyone work overtime on this.” Adds Gerry Savaria, executive vice president, of Paradies Lagardère, the decline in sales has expanded well beyond the losses suffered due to declining international traffic inFebruary. “The slowdown in traffic is real,” he says. “It’s here and it goes beyond the international hubs that had Asian flights, which is what we saw in February. Now, spilling into March, you can see it is starting to have a domestic traffic effect, not just through connections, but with companies that are canceling travel.” Some of the most dire financial projections are coming from small businesses operating in airport concessions programs. “The industry is facing a major financial crisis,” says John Clark, chair of AMAC. “Many businesses, including those classified as small and/or disadvantaged, may not be able to continue operations.” Clark told AXN that many AMAC members have their personal finances directly tied to their businesses. “Many [ACDBEs and small businesses] have leveraged their mortgages, et cetera, to invest capital in the airports,” Clark says. “They depend on the revenue stream to meet not only their payroll but their bond covenants as well.”
Several Airports Acting The industry’s dire short-term outlook has several of the nation’s largest airports acting on operator requests for relief. “Many of our airport partners have tried on their own to come to our support and defense,” Murray says, noting several instances of elimination of the minimum annual guarantee, alteration of operating hours and other efforts.
U.S. commercial airports are projected to lose at least
$8.7 billion Passenger enplanements are expected to decline by
in CY2020 due to the COVID-19 crisis.
222 million
during the first half of 2020, based on an anticipated 30 percent decrease during the March through June period, and
285 million for the full year.
Source: Airports Council International – North America
Collection of the Passenger Facility Charge, an important funding source for U.S. commercial airports, is expected to fall by close to
$1.1 billion in 2020
The city of Atlanta has suspended the minimum a nnual guara ntee payment obligation for concessionaires and rental car companies at HartsfieldJackson Atlanta International Airport (ATL) for a four-month period ending June 20. Atlanta Mayor Keisha Lance Bottoms signed the legislation, calling it an effort to allow those businesses to assist employees experiencing reduced hours and wages. “Atlanta families – many of whom are already living paycheck to paycheck – will be overburdened if we do not provide much-needed economic relief immediately,” says Bottoms. “We are asking our business partners to continue showing compassion toward their employees, and when possible, provide continuity of pay for their hourly associates.” The city may extend the action for an additional 30-day period, “if the COVID-19 pandemic is still active and it is in the best interest of the city.” Once the emergency rental payment term expires, concessionaires will be required to resume normal rental payments. The Metropolitan Airports Commission board authorized staff at Minneapolis-St. Paul International Airport (MSP) to give financial relief to concessionaires as they weather the COVID-19 crisis. The staff is authorized to “evaluate and, if in the best interest of the Commission, grant full or partial waivers of minimum annual guarantees for the period March 1, 2020, through June 30, 2020, for any or all parties operating under concession agreements with the MAC.” Similar actions were taking place throughout the U.S. aviation industry. San Francisco International Airport (SFO) offered the forbearance of rent and fees for concessionaires, and offered a lease modification for the airport’s duty free vendor to allow a temporary suspension of the minimum annual guarantee and an adjustment of the base rent calculation for the remainder of this year.
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At Portland International Airport (PDX), officials, eliminated minimum annual guarantees for food and beverage, retail and terminal services, switching to a percentage of sales rent only for an unspecified period. PDX is also allowed adjusted hours at the operators’ discretion. In additional, several businesses operating at PDX followed the lead of their city-store counterparts and temporarily closed their airport stores. These included Nike, Columbia Sportswear, Powell’s Books and Dragontree Spa. On March 16, Oregon Gov. Kate Brown ordered restrictions on bars, restaurants, wineries, pubs, breweries and tasting rooms, which impacted the sit-down restaurants at PDX. Airport counter-service restaurants, grab-and-go services and coffee stands are considered takeout.
Seeking Relief From Congress That’s just a handful of the many airports taking action throughout the United States. While welcomed by concessionaires, they say it’s not enough. ARRA and AMAC also called on the federal government to come to their aid during these unprecedented times. Airports are asking for assistance as well. Airports Council International-North America and the American Association of Airport Executives (AAAE) jointly sent a letter to Congressional leaders in mid-March asking for $10 billion in immediate assistance to flow through the existing FAA Airport Improvement Program with expanded eligibility to meet airports’ immediate needs. “As Congress and the Administration focus on the pandemic, it is imperative that special attention be given to the aviation industry, given its profound impact on the national economy and the devastating impacts the coronavirus will have on airlines, airports, and the myriad businesses that operate at airports across the country,” said the letter jointly signed by AAAE president and CEO Todd Hauptli and ACI-NA president and CEO Kevin Burke. The two industry leaders note that airports have built necessary infrastructure that has been funded, in large part, by nearly $100 billion in collective debt, with approximately $7 billion in airport bond principal and interest payments due in this calendar year. “The rapid loss of revenue from the coronavirus outbreak and related measures to protect the public will severely impact the ability of airports to meet debt requirements and other necessary ongoing costs,” the letter says, adding that no U.S. commercial service airport has ever defaulted on a bond payment. “Allowing a default now would be devastating for any affected airport and the entire industry, as future borrowing costs would increase significantly.” For their part, concessionaires, through the trade groups ARRA and AMAC, urged Congress and the Trump Administration to provide financial relief and assistance to airport concessionaires to help them continue operations, secure loans, and make debt service payments.
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“Mid-term refurbishments or additional capital expenditures, or projects that are currently on the table for build-out – all of that really needs to come to a halt at a time when we’re literally ringing fewer and fewer sales and potentially heading toward zero. – Judith Byrd, president of Byrd Retail Group and an ARRA Board member They are asking that the government: • Provide grants and low-interest or interest-free loans to concessionaires to allow concessionaires to cover operating expenses. • Provide loan guarantees to concessionaires to assure their ability to continue making debt service payments and secure loans for their ongoing capital investment requirements. “We want to get a strong message out to the airports, to urge them and to urge our members to get together to work out some arrangements. Many already are, and that’s where it has to start first,” says Rob Wigington, executive director of ARRA. “We also need to send a strong message to Congress,” Wigington adds. “We want to be clear that we support the airports in what they’re asking from Congress. That will help not only the airports but it will [ultimately] help the concessionaires…. But it won’t be enough. This package that Congress is putting together can’t just be bailing out the airlines and helping the airports, as important as that is. It’s got to include something for concessionaires, particularly the smaller businesses.”
Stop Capital Expenditures In addition to the specific actions ARRA and AMAC are requesting of airports and the federal government, they also urge airports to put the brakes on capital expenditures. “Mid-term refurbishments or additional capital expenditures, or projects that are currently on the table for build-out – all of that really needs to come to a halt at a time when we’re literally ringing fewer and fewer sales and potentially heading toward zero,” says Judith Byrd, president of Byrd Retail Group and an ARRA Board member. Larger projects also warrant reconsideration, according to Murray. “There are new terminals being built and there are efforts to keep those projects moving as much as possible,” he says. Murray suggests the money can be better used in shoring up the business. “We’re in much the same situation as an airline, in that regardless of the size of the company, liquidity is crucial right now. Continuing to build a capital project for a restaurant or retail operation would seem somewhat short-sighted today.”
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OUTDOORS Airports Are Offering Outdoor Spaces As Respite For Harried Passengers BY SHAFER ROSS
The meeter-greeter courtyard at Long Beach Airport is a very popular place for travelers and welcome-wagons alike to congregate pre-security and enjoy the Southern California weather.
Secure facilities don’t tend to have an abundance of open-air space. Airports, for example, are well-known for their secure nature and, for the most part, once a passenger steps onto the curb at one airport, they won’t feel the sunshine on their face again until they leave their arriving airport. These days, however, some airports are choosing to incorporate outdoor spaces – both before and after security checkpoints – to allow travelers a relaxing respite from the chaos of a busy terminal.
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Left: The massive size and central location of Denver International’s outdoor Plaza make it an ideal spot for large events and dayto-day airport activity alike. Below: Long Beach Airport has about 20,000 square feet of post-security outdoor space available to passengers, offering an open courtyard atmosphere and native landscape.
Pre-Security Fun At Palm Beach International (PBI), for example, airport administration has amenities to offer travelers outside the terminal walls. “We actually have a shuttle from the airport that will stop at Home2Suites [hotel] and Drive Shack. This is located on-airport, literally across from our cell phone lot, which has a Dunkin’ and gas station,” says Laura Beebe, director of PBI. “If somebody is coming in for business travel, they literally don’t even have to leave the airport.” While an on-grounds eatery and gas station are both enticing offerings for guests who may not yet know their way around town, the truly unique feature of the airport campus is Drive Shack. A multi-use dining and entertainment venue, Drive Shack is located on the airport campus and easily accessible for Florida visitors or those with time to kill between flights. “The concept’s very similar to Top Golf,” says Beebe. “It’s an entertainment venue with a three-story hitting range, restaurant, bar, arcade activities. It’s really a great place for people to spend time. “ In addition to food, games and green, Drive Shack offers airport guests complimentary luggage check to keep their belongings safe while they explore the facility, contributing to an experience that is truly catered to the airport visitor. Across the country, Denver International Airport (DEN) also offers an outdoor space that can be enjoyed by both travelers and locals alike. The 70,000-square-foot plaza famously rotates functions throughout the year, serving as an ice skating rink during the winter months, as well as an event venue for DEN’s annual Colorado brewery collaboration, Beer Flights – and that’s when
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it’s not being used as a meeting, dining, working or relaxation space by the many people who pass through the area each day. “There’s a lot of public art…[and the] event space allows us to have different activations,” says Mike Meyers, manager of events for DEN. “We do a full-sized park in the summer, where we have really high-grade artificial turf…we do games like badminton, bocce and in years past we’ve done an 18-hole mini-golf course. There are a lot of different things we can do.” Indeed, the space’s massive size and central location make it a great host for the kinds of activities that attract many different groups. Passengers with long layovers or those staying in Denver can leave the terminal and hang out in the ample seating, Westin’s guests can
exit their hotel directly into the courtyard and bring food or drink from inside with them, and locals can take the train or drive to the airport to partake in the diverse activities or just enjoy the atmosphere. “Post-9/11, the idea was if you don’t have any business at the airport, don’t come. So, by creating this event space on our plaza, we’re really changing the dynamic of that and inviting people,” Myers says. “To bring people here is a goal, and we are fortunate to have a lot of local support.” Residents of the Long Beach area, as well, must enjoy patronizing the local infrastructure, because the meeter-greeter courtyard at Long Beach Airport (LGB) is also a very popular place for travelers and
Left: The new SkyTerrace observation deck adds nearly 1,500 square feet to the existing 3,000 square feet of post-security outdoor space open to passengers at San Francisco International Airport.
welcome-wagons alike to congregate and enjoy the Southern California weather, with more on the way. “There’s this whole open space where passengers are free to sit, to meet their loved ones in the new meeter-greeter plaza that will be constructed in the next three years,” says Cynthia Guidry, director of LGB. The existing space will be getting a facelift, expanding and offering more amenities, along with some added concessions options. If not for the overwhelmingly positive reception of the space by locals and travelers alike, the expansion may not be necessary. As it stands, providing travelers even more options could tempt even more travelers to arrive a little early to explore.
Post-Security Outdoor spaces at the airport aren’t only available for locals and travelers with a lot of time to spare between flights; in fact, many airports have been incorporating outdoor spaces for passengers to enjoy without leaving the secure side of the terminal, and more are jumping on the trend every year. Just a few years back, a renovation to the South Terminal building at AustinBergstrom International Airport (AUS) presented an opportunity, not only for added gate space, but for additional relaxation space that would charm otherwise stressed and rushing passengers. The outdoor patio – which boasts access to both the sunshine and shade, and even air-conditioned areas for those particularly sweltering Austin days – offers guests the opportunity to get some fresh air, yes, but also to order from an onsite food truck and take their pets or service animals to relieve themselves in a specially designated area.
For some airports in particularly enviable climates, one outdoor space is just not enough. In addition to their active and popular pre-security space, DEN is gearing up to add a lot more outdoor space for air travelers to enjoy, and it’ll be right in the terminal. “It’ll be complete by 2021, with our expansion project. It’s one of our capital improvement projects and each of our concourses is getting expanded,” says Alex Renteria, public information officer for DEN. “We’re going to get 39 new gates, and with that comes the outdoor spaces.” Each of the concourses will be getting its own terrace, Renteria says, equaling four new outdoor spaces for airport guests to explore and enjoy. “At this moment, we don’t have any spots for people to plane-spot – and that is something that we’re hoping to get in the future, pre-security,” she adds. “But we thought, what a way to enjoy beautiful Colorado – maybe plane-spot, maybe share a drink…while you wait for your flight.” In other airports, in addition to being an area for relaxation, the outdoor spaces serve as another sense of place. Reminiscent of the Big Apple’s affinity for skyscrapers, the T5 Rooftop and Wooftop Lounge in New York’s John F. Kennedy International Airport (JFK) is owned by JetBlue, which operates the entire terminal. The space is open to travelers every day, offering outlets to plug in and charge devices, a designated dog-walk area and a 400-squarefoot children’s play area. The rooftop itself totals a little over 4,000 square feet and is open to all travelers in the terminal, regardless of membership with JetBlue. San Francisco International Airport (SFO) also boasts post-security outdoor space, and it’s now in the process of introducing
more, with the first SkyTerrace observation deck debuting in mid-February of this year. “One of the things that our team really looks for is unique features and amenities,” says Doug Yakel, public information officer for SFO. “And I know that in my line of work, I see increasingly that airports are seeking to differentiate themselves based on the unique features and amenities that they offer. And I think the idea is that as passengers find themselves having to spend more time at that airport…let’s offer a wide variety of things to do.” Before the addition of new space, the great outdoors at SFO encompassed 3,000 square feet, located within convenient walking distance of a couple food and beverage concessions outlets. The new SkyTerrace observation deck adds nearly 1,500 more square feet, enough space to host special exhibits from the SFO Museum. The hope is that the post-security space for passengers to relax outdoors offers them the opportunity to enjoy the travel experience as it once was. “The goal here is to kind of remind people what makes air travel exciting, and let’s get them excited about air travel again,” Yakel says. “It’s definitely designed to be a space that you could relax and enjoy.” The airports seizing on the outdoor space trend all seem to be in agreement on that; at Long Beach, Guidry says that the large postsecurity plaza is designed to be the ultimate in comfort and relaxation. “Post-security, we probably have about 20,000 square feet of space available to our passengers. It’s an open courtyard feel, with a very plush landscape with palm trees and plants, and it’s very outdoorsy, flanked with restaurants on either side. It has a number of patio chairs and tables so passengers can sit out and enjoy the sun,” she says. “We find that they really, truly enjoy being out there in that space.” Harried travelers can kick back, relax and watch the airfield, where planes are constantly landing and taking off, or even traverse between the two concourses connected by the courtyard and pick up a bite to eat that can be enjoyed out in the fresh air. Even a selfie station can be found, located in a scenic spot, ideal for the social traveler to grab a snapshot and share with friends. “It’s not just about giving access to the airport and wanting to make it stress free,” Guidry says. “When [people] come to the airport, we want them to relax and enjoy traveling, the way it used to be.”
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A Big Night 2020 Airport Experience Gala Reveals Annual Award Winners Once again, Airport Experience News honored the best in the industry at the annual awards gala at the 2020 Airport Experience Conference in Denver. The signature event capped three days of exciting programming and brought the industry together for a celebration of the myriad successes achieved in our industry over the past year. AXN Award winners were chosen through a nomination process, and a committee of industry professionals voted on the finalists to determine the champions. And new this year, Airport Experience News partnered with Grab, Thanks Again and ReachTV to allow the general public to determine the winners of five customer-facing award categories.
Airport with the Best Customer Service Minneapolis-St. Paul International Airport MEDIUM/SMALL – Reno-Tahoe International Airport LARGE –
Airport with the Best Program Design LARGE –
Los Angeles International Airport Austin-Bergstrom International Airport
MEDIUM/SMALL –
Airport with the Best Commercial Management Team Dallas/Fort Worth International Airport MEDIUM/SMALL – Raleigh-Durham International Airport LARGE –
Airport with the Best Overall Program Philadelphia International Airport MEDIUM/SMALL – Edmonton International Airport LARGE –
Bar of the Year New Belgium Brewing by High Flying Foods
Best Restaurant Design SanTan Brewing by HMSHost - PHX
Best Retail Store Design The Shoppes at Bayshore by NewsLink – TPA
Best Local-Inspired Restaurant Bud & Marilyn’s by Areas USA
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Traveler Awards
Sponsored By Grab, Thanks Again and ReachTV
BEST TECH INTEGRATION At Your Gate BEST AMENIT Y Gameway BEST RETAIL Books & Books
Best Local-Inspired Store
BEST DINING Hi-Lo Diner
Best New Restaurant
BEST BAR The Parlor
Prince by Airport Retail Group
Bud & Marilyn’s by Areas USA
Best New Retail White House Black Market by Stellar Partners
Retailer with the Best Customer Service LARGE –
Best Brand Restaurateur LARGE – SMALL –
Paradies Lagardère for Chick-fil-A High Flying Foods for Farmerbrown
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Paradies Lagardère Marshall Retail Group
Best ACDBE Operator Mission Yogurt
Best Brand Retailer Hudson for MAC SMALL – NewsLink for Air Essentials
Best Franchise Brand
Best Overall Restaurateur
Best Passenger Service
SSP America SMALL – High Flying Foods
Minute Suites
LARGE –
LARGE –
Shake Shack
Best Overall Retailer LARGE – SMALL –
Paradies Lagardère Marshall Retail Group
Best Travel Convenience Retailer LARGE – SMALL –
Hudson Marshall Retail Group
Restaurateur with the Best Customer Service LARGE – SMALL –
HMSHost Jackmont Hospitality
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The Conference in photos 4
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Joya Kizer Clarke of CASA Unlimited
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Erin Humphreys of Erin Clarke + Co.; Greg Plummer of Enjoy Repeat; Rosalyn Mallet of PhaseNext Hospitality
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Phil Cappozzi of Jersey Mike’s Subs
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Robyn Quintal of Peet’s
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10. FOCUS Brands booth 11. Gower Smith of Swyft 12. Mark VanLoh of Jacksonville International Airport; Mark Duebner of Dallas Love Field; Kevin Dolliole of Louis Armstrong New Orleans International Airport; Lew Bleiweis of Greater Asheville Regional Airport Authority; Angela Gittens of Airports Council International 13. Schmooze Sessions
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14. Patrick Wallace of Paradies Lagardère; Mark Rickoff of Hudson; Mike Caro of URW 15. Mara Peterson of Blue Stone Management; Coleman Swartz of Ottawa International Airport; Tosin Kasali of HMSHost; Louis Hubbard of Louis Armstrong New Orleans International Airport 16. Melissa Montes of Airport Experience News 17. Michael Svagdis of SSP America 18. James Obletz of Delaware North
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19. Derryl Benton of HMSHost 20. Gregg Paradies of Paradies Lagardère 21. Ingrid Hairston of Raleigh-Durham International Airport 22. Michael Mullaney of Hudson 23. Howard Eng of Greater Toronto Airports Authority 24. Carlos Bernal of Areas USA 25. Regynald Washington and Gregg Paradies of Paradies Lagardère
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26. Roderick McOwan of Marshall Retail Group 27. Jordan Walbridge of Gameway 28. Lew Bleiweis of Greater Asheville Regional Airport Authority; Candace McGraw of Cincinnati-Northern Kentucky International Airport; Howard Eng of Greater Toronto Airports Authority 29. Adam Mitchel and Jenny Ly of Philadelphia International Airport; Clarence LeJeune and Melwood Hannah of MarketPlace Development
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industry More than 1,000 industry executives gathered in Denver in early March for the 2020 Airport Experience Conference. In addition to the lively Experience Hall, the fascinating airport tour and the myriad networking opportunities, the conference offered three days of educational content designed to identify best practices and cutting-edge approaches to revenue generation and maximizing the traveler experience. The following pages provide a summary of key takeaways from thought leaders in the airports and concessions industries.
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innovating The Customer Experience
Keynote Speaker David Avrin Offers Insights On Providing Exceptional Experiences BY SHAFER ROSS
Above: David Avrin is a marketing consultant and three-time author of books on attracting and keeping customers.
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The customer experience is more relevant than ever, according to David Avrin, an American marketing expert and a three-time author of books on attracting and keeping customers. Avrin, the keynote speaker at the 2020 Airport Experience Conference, held March 1-4 in Denver, says the availability and convenience of the internet has made every consumer an expert and a celebrity. One voice can be magnified to reach thousands on social media, and what that voice is saying can make or break a business, he says. “I am your ideal customer,” Avrin’s presentation began. “The world has changed what we buy, what we expect and what we expect within the confines of the airport environment.
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“We’ve changed,” he went on. “The marketplace has become a grocery store. By and large, we’re walking through and we buy things we want to buy; nobody is really selling us things.” This, he said, is why it’s so important to create an engaging and unique experience; the customers aren’t coming in because they need to be told what they want anymore, they come in because they want an exceptional experience. However, Avrin said, it doesn’t seem as though all businesses have tuned into this yet. Many still operate around policies and regulations and schedules and routine, but without incorporating opportunities to adapt to a changing landscape and a changing consumer. “Look at every point of contact along a customer’s journey, and ask the question, is this the way this should be done?” Avrin advised. “It’s the way we do it, but is it the way it’s going to be done a year from now?” He suggested that business owners take a step back and consider themselves in competition with their organization. What would they do differently? How would a business be built from the ground-up today – as opposed to even a decade ago – and compete in the market? Avrin suggested it was all down to customer experience: quality and expertise are a given these days, and today’s consumer demands a great experience. “The answer is yes,” Avrin said, exemplifying the mindset of a successful modern business. “What’s the question?” Avrin closed the presentation with a piece of advice given to him in his youth while performing with a wedding band, which he said has inspired much of his dedication to providing an exceptional customer experience. “Two things to remember,” he said. “Somebody is always watching, and you’re getting paid for this.”
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Above: Four North American airport directors tackled issues affecting the industry today, including health scares, the ongoing battle for a federal increase to PFCs and infrastructure constraints.
BY SHAFER ROSS Four North American airport directors, representing airports of various sizes, gathered for a panel discussion at the 2020 Airport Experience Conference, where they tackled many issues affecting the industry today, including health scares, the ongoing battle for a federal increase to Passenger Facilities Charges (PFC) and infrastructure constraints. Angela Gittens, director general, Airport Council International (ACI) and moderator of the panel discussion, set the stage. “Air travel is becoming a feasible travel option for the first time for many,” she said. Though good news, growth is not without growing pains. “Planned airport investments from 2018 to 2022 fall short by $78 billion. Required investments are in excess of $433 billion. “Modernizing the PFC and maintaining a robust AFP would allow airports to do what they do best: allow passengers to use safe facilities,” Gittens added. A longtime gripe from airports, the federal cap on PFC
has been stagnant for nearly two decades, forcing many airports to delay needed improvements and expansions. Lew Bleiweis, executive director of Asheville Regional Airport (AVL), said progress is being made. “Peter DeFazio is really trying to push the wheelbarrow for us,” he said. “I think we’re going to see some progress.” Indeed, Rep. Peter DeFazio has been working in Congress to get airports the increases they need in the PFC to help fund major infrastructure projects that could greatly improve the efficiency of air travel. Airlines continue to push back against a PFC increase, though, and thus far they’ve been successful. With or without a PFC cap increase, expansion or renovation is crucial for many airports. Louis Armstrong New Orleans International Airport (MSY) recently completed a new terminal, and Kevin Dolliole, director of aviation, said he was pleased with how great of an impact consolidating security in the facility had.
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Women Taking Flight
Above: Angela Gittens (left), of ACI, and CVG’s Candace McGraw (right) discuss the past and future of women’s place in aviation leadership.
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“The new facility with the consolidated checkpoint, once you’re past the checkpoint you’re free to explore the concourses and explore your options to shop and eat,” he said. Now, instead of being locked into the one concourse where their gate happens to be, a passenger can roam freely and explore all of the airport’s offerings. The global coronavirus crisis was just ramping up during the week of the conference, and the subject was brought up during the discussion. Mark Duebner, director of aviation at Dallas Love Field (DAL), stressed the importance of public perception and how being prepared can affect that. “What can we put in place now to help people feel better about sanitation and health?” he asked. “I think working on that now would help with future situations.” The Jacksonville Aviation Authority CEO Mark VanLoh expressed similar sentiments, adding that preparedness and public information would be key to keeping people confident in air travel. “We’re getting all the information [the industry] has…we definitely need the test kits,” he added. “I think that’s the key in the coming weeks.” If the public must continue to fly, VanLoh said the best course of action is to ensure continued confidence in the system with regular information, updates and improvements.
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Like so many industries, airports and aviation have long been dominated by men. There has been growth in women in leadership positions over the past few decades but their numbers still fall far behind those of men. Several in the industry are looking to change that dynamic by attracting more women to the field and grooming them for leadership positions. A few wellknown female voices in the industry took the stage at the 2020 AX Conference to discuss the past and look toward the future. AXN’s own Carol Ward moderated the panel, asking a range of questions about the experiences and feelings of the women in airports. Angela Gittens, director general for Airports Council International (ACI), described the early days of her airport career that began in the 1980s, noting that she was often the only woman and only African American in a room of decision-makers. She said she learned to take ownership of her powerful position, not assuming that she will be disregarded or treated differently. “I never want to go into a situation thinking I’m going to be at a disadvantage because I’m a woman or because I’m black,” she said. “That may be the case, but I can’t go into it with that in my mind.” To give power to such thinking “hurts me more than it hurts them,” she noted. Candace McGraw, CEO of Cincinnati/Northern Kentucky International Airport (CVG) agreed with Gittens but added that she believes ego is a big part of why many men hesitate or refuse to include women in leadership teams. “Sometimes, you can use the big egos to your benefit,” McGraw said, noting that she herself often takes a step back to observe what personalities she’s dealing with. “If you can get them all the glory in their minds but get yourself to your endpoint, you’re the winner.” In the past, more people on the whole were being rerouted into the aviation and airport industries after successful careers in the United States Air Force, said Gisela Shanahan, CFO of Denver International Airport (DEN), a path that she herself took several years ago. That pathway has been diminished, she said, thus requiring new avenues for women to enter and grow their careers in airports. Shanahan encouraged young women starting out to find support and mentorship in the field. “There’s definitely an imbalance across the board, but nine times out of ten, particularly when you’re negotiating issues, I think the key is support, and you have to look for it,” she said. All three female executives said they actively look to mentor young women to prepare them for leadership roles in the airport industry.
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Concessions Strategies Panel Discussions Highlight Best Practices For Airport Concessions Success BY SALLY KRAL AND SHAFER ROSS
Above: Several
experts came together to discuss what’s trending in the foodie world, both outside and inside the airport.
Elevating the passenger experience and maximizing revenues are two key goals for both airports and their concessionaire partners. In a series of panel discussions held at the 2020 Airport Experience Conference, experts from within the fields of retail, food and beverages, and services offered up experiences and advice for enhancing the offerings in airports.
Capitalizing On Food Trends Pleasing today’s foodie travelers is a tall order. Whereas once airport concessions programs could thrive by offering an assortment of American and global cuisines with a mix of local and national brands, today’s passengers want more. They care about the latest trendy cuisines and are also demanding tailored experiences, tech advancements and sustainable practices. The Airport Experience Conference brought together several industry experts to discuss what’s trending in the foodie world both outside and inside the airport.
Moderated by Rebecca Ramsey, executive director of R.R. Ramsey Research, the speakers included Maeve Webster, president of Menu Matters; Alan Someck, president of Keystone Hospitality Solutions; and Keith Hunter, partner at Hunter Palmer Global Retail Solutions. Webster kicked off the session by showing slides of some of the more outrageous food trends she’s seen streetside in recent years, from rainbow bagels to glitter wine, and asked, “Have we reached the limit with trends?” She’s found that, indeed, chefs have become tired of constantly chasing trends and the consumer is increasingly exhausted with the number of trend conversations happening on social media. And while Webster noted this doesn’t mean that trends will be going away anytime soon, it does show that they need to be approached in a more realistic and strategic way. “All trends need to be evaluated through the lens of a strong brand and menu strategy – not every trend is relevant and you shouldn’t chase them all,” she said, adding that you don’t want to offer a trendy food item on your menu that doesn’t fit with your concept, as it can dilute the strength of your brand. “You have to make sure you have a competitive point of differentiation.” Someck’s presentation focused on an issue that’s been growing in the food and beverage industry and shows no signs of stopping: sustainability. While he recognized that sustainability initiatives can cost more in the shortterm, it’s important to view it as an investment that will pay off in the long-term. “We’ve found that restaurants that deliver a message of sustainability and actually go about doing good work in this arena are favored by the average customer,” he said. “If given the choice between a restaurant that they believe is doing some kind of good in their community versus one that isn’t, they will spend their dollars at the former.” Someck offered some examples of what restaurants are doing to address sustainability concerns, including moving toward 100 percent food utilization, using
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alternatives to harmful cleaning chemicals, implementing a conscious supply chain and spearheading purposeful social missions. “This is consumer-driven – sustainability resonates especially with the younger generation,” he said. “And so looking toward the future, this is certainly an area that can give you a competitive advantage. You just need leaders who are willing to take some chances and a lot of small steps with the big vision in mind.” Lastly, Hunter discussed the challenges operators are facing in the ever-evolving airport landscape – namely difficulty predicting future trends, rapidly emerging new technologies, sustainability concerns, design costs and logistics, and supply chain and pricing issues – and how to best address these. “You only have to read the annual review of IATA to see the emphasis that they’ve placed on passenger experience,” he said. “What they’ve found is that passengers are no longer simply buying a flight when they purchase an airline ticket, they’re buying a whole travel experience.” Streamlining and enhancing the passenger experience is the best way to improve overall non-aeronautical sales, Hunter argued, noting that today’s passengers want to spend money on experiences over material items, and they also care about personalization, where their products are from and that they’re reflective of local culture, and tech advancements like advance ordering and easy pay. “To highlight how important experience and customer satisfaction is, a recent Airports Council International study looked at
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whether adding more passengers or adding more space or improving the satisfaction of customers would provide more revenue opportunity for an airport, and the satisfaction element came out on top, leading to an average growth of 1.5 percent in non-aeronautical revenue.”
The Evolution Of Retail Retail has undergone a sea of change over the past two decades, and it’s no secret that airports and other non-traditional channels have felt the squeeze. In this session, two retail industry specialists discussed ways that airports can innovate and invigorate their retail offerings in this increasingly competitive arena. Moderated by John Reeb, owner of Reeb Airport Concessions Consulting, the speakers included Kevin Brocklebank, founder of the travel consultancy One Red Kite, and Gower Smith, CEO of Swyft, a food and retail service automation company. Brocklebank was first up, asking the room if anyone had seen a woman dressed in a gorilla costume playing the ukulele wandering around the conference the day before. Indeed, many people had, which was
Below: Retail industry specialists discussed ways that airports and concessionaires can innovate and invigorate their retail offerings in this increasingly competitive arena.
exactly Brocklebank’s intention when he hired the woman. “People reacted to it; they took selfies; it brought smiles to so many people’s faces,” he said. “And that’s what we should be thinking about in terms of retail: We need to be engaging people, shocking people, standing out, being different.” He then showed examples of popular pop-up shops on the street and in airports that have successfully grabbed consumer attention and, more importantly, made them feel something. “There’s lots of talk about customer experience, but I actually believe that people want an emotion, and that’s what an experience will give them,” Brocklebank said. “There’s three things retailers need to keep in mind: be different, get noticed and create a memory.” He ended his presentation asking the room to think of where their office fire extinguisher is, guessing that most people don’t know off the top of their heads. “I think if travel retail doesn’t make a change to adapt, it will become the fire extinguisher – people will walk by, not noticing, heads in their phones, because there’s nothing making it stand out,” he argued. “This is the decision to be made: Do we want travel retail to end up like the fire extinguisher or the gorilla?” Smith then took the stage to introduce his company’s vision for the future of airport retail: unattended stores. He began by looking back at how different the airport looked in 2005, with limited tech abilities and very basic retail offerings, compared to today’s landscape, which looks more like a luxury mall and features many tech advancements that make the process more seamless, from mobile check-in to reliable WiFi connections. And today’s consumer is far more tech savvy and accepting of new technology than ever, which has helped paved the way for companies like Swyft to introduce more unattended retail solutions in the airport. “Early on in our development, consumers had many questions about how to use our machines, but a lot of those concerns have gone away and we’ve doubled our conversion rate,” Smith said. “There’s been broader acceptance and we’ve had billions of engagements, billions of user sessions and billions in sales.” Swyft’s machines may look somewhat similar to traditional vending machines but they’re far more sophisticated, with a backend system that keeps track of inventory in real time. And the machines can carry nearly any type of product, from food and beverage to electronics to healthcare and beauty items. Swyft
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is also focused on offering fair pricing, so consumers will pay the same at the machines as they would on the street or online. “Fair pricing with an amazing convenience is a winning formula,” Smith said. “We are as a society moving toward automation and we need to deal with the impact of that. The future is frictionless shopping.”
Capturing the In-Venue Experience Operating in an airport is an incredibly unique experience. Both plagued with constraints not found on the street and more strategically located than a business owner could hope for, the airport space is unlike many. That said, other non-traditional venues – such as stadiums, casinos and universities – can give insight into what kinds of experiences are possible to offer in such a niche environment. The panel discussion brought together Abigail Whetstone, owner and principal consultant at Non Trad Consulting, who served as moderator, along with Bold Food co-owner and managing partner, Laurence Kretchmer, and Geoffrey Ax, principal and aviation market leader for Populous. Whetstone opened with a testament to the new consumer: “Millennials value experience. They bond with the people they share these experiences with,” she said. “There’s been a cultural shift over the last decade where they’re not spending their income on material goods.” Instead, said Whetstone, Millennials are buying their future memories, experiences that will stay with them and influence decision-making in the future. “All these places where people gather, the bar has been raised,” added Bold Food co-owner and managing partner, Laurence Kretchmer, during his presentation. “As someone who operates restaurants in casinos, the pressure to do more has never been greater. [Customers] want more because they need more.” This doesn’t just apply to casinos, of course. Many millennials closely watch what they spend and won’t part with precious disposable income unless certain they will be getting the experience they’re looking for, especially when traveling can already be a huge expense, Kretchmer said. Geoffrey Ax, principal and aviation market leader for Populous, agreed that the experience is of utmost importance to today’s consumer, but added that technology is advancing so quickly now,
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operators are forced to look to the future and predict where trends are headed. “With all this technology out there, are our airports just the next part of our city, built into the urban environment?” he asked. “What happens to the experience when you do that?” With air travel becoming more and more popular, Ax said the opportunity for growth and development is in the hands of the people frequenting the airport, and it is up to those operating businesses to meet those people and their needs, whoever or whatever they may be.
Concessions Solutions For Small And Medium-Sized Airports Today’s passengers continue to demand a wide variety of food and beverage and retail offerings when they travel, but smaller airports often don’t have the space or passenger volume to make it work. This panel discussion gathered industry professionals involved in smaller airport operations to discuss how to best tackle concessions in this unique environment. Moderated by Deanna Zachrisson, business development manager at Santa Barbara Airport (SBA), the panel included two concessionaries that work with smaller, regional airports – Kurt Schwager, vice president of operational services at Jacobson Daniels, and Jeff Switzer, president of Tailwind Concessions – as well as Atif Elkadi, deputy CEO of the mid-sized Ontario International Airport (ONT). Schwager began his presentation with some background on Jacobson Daniels, a small but growing ACDBE firm that formed 20 years ago, focused primarily on professional services consulting. Over the past six years, the company has transitioned into operating airport food and beverage concessions and, according to Schwager, helped to double concessions sales at Juneau International Airport (JNU) and JacksonMedgar Wiley Evers International Airport (JAN). Schwager detailed the step-by-step process of getting into the smaller airport concessions business, beginning with educating yourself on the industry and determining your value proposition. “Just being a good guy in an ACDBE company isn’t enough – you’ve got to bring something to the table,” he advised. “What’s your leverage? Why would someone consider you for their food and beverage operations?
Above: Laurence Kretchmer, co-owner and managing partner of Bold Food, said the pressure to provide a memorable experience has never been greater.
Is it your concepts? Is it your local slant? Is it your experience at airports? For us, our experience was the way we got into it: we understood that environment and that was very helpful.” Schwager also empha sized the importance of finding the right partners and opportunities for your company, properly preparing for the Request for Proposals process and getting right to work once the opportunity has been secured. “And then when you’re all done, make sure you celebrate because what you and the airport just pulled off is significant,” Schwager added. Switzer discussed Tailwind Concessions’ experience operating in small, regional airports with enplanements under 700,000. The company formed 15 years ago and now operates 25 locations from Alaska to Florida. “Most of our contracts cover all the food, beverage and retail for the airport,” he said. “It’s a challenge because we need to be all things to all people from 4:00 in the morning to 10:00 at night.” Switzer stressed that developing a collaborative relationship with the airport is the most important aspect of concessions operations. “All of our airports are small so most times we deal directly with the airport director, which is very helpful in getting an understanding of the administration’s vision of what the airport is supposed to be,” he explained. “We look to the airport for guidance and they look to us to improve and show off their vision.”
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Elkadi provided the airport perspective.. Elkadi focused his presentation on retail and the unique challenges small and mid-sized airports face in providing dynamic retail solutions for passengers. “The value-formoney perception is poor, and airport retail is viewed as the ‘same old, same old,’ even at larger airports,” he said, adding that this is where pop-up retailers can be a great, costeffective solution that give brands exposure and allow smaller airports to be cutting-edge. “If you can differentiate your service and your offer at your airport, regardless of your size, that will leave a memorable moment for your passengers and continue to grow your airport.” Achieving this requires the airport and the concessionaire to work together as a team, Elkadi noted. “Everybody says ‘we’re going to work together, we’re going to have synergy,’ but you have to really mean it and own it,” he said. “Especially as technology and our passengers continue to evolve, that synergy with concessions is going to be extremely important.”
Labor Challenges Even under the best conditions, working in an airport poses unique challenges that often lead to high turnover rates, particularly among those working service jobs. Many major markets are raising the minimum wage to $15 an hour in Below: Deanna Zachrisson, business development manager at Santa Barbara Airport,led a discussion on concessions strategies for small and mediumsized airports.
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hopes this will attract more workers, but balancing these new costs remains a big issue for operators. Mitchell Bierman, partner at Weiss, Serota, Helfman, Cole & Bierman, led a roundtable-style discussion examining these ongoing challenges from the perspectives of a union leader, a concessionaire and an airport authority. Bierman began the discussion by asking Ian Mikusko, director of Unite Here Airport Group, a labor union with 300,000 members across the country and Canada, to make the case for a mandatory higher living wage across markets. “I think good jobs are good company policy, from a moral perspective, a public health perspective and a customer service perspective,” Mikusko said. “I think a lot of companies are raising the minimum wage not just because it’s the right thing to do but also because it’s a way to bring good people into the airport and provide the level of service and quality of product the customer expects.” Mikusko added that he doesn’t necessarily think a higher wage needs to be imposed by state governments, but that local markets should be able to make these decisions based on the costs of living in their areas. Bierman then looked to Pat Murray, executive vice president of SSP America, to provide his perspective as a concessionaire on the developer side of the business. Murray noted that with the often massive investment in capital required to build businesses, raising wages on top of those costs would mean that the business can’t run as efficiently. “We’re at a time when things are moving really quickly around the country – there’s the municipality and the changing local labor laws, and then
the collective bargaining units and a lot of the time those things don’t coincide so we’re being held accountable for different standards in every direction,” he said. “The challenge is how is the business going to survive, how can we still be profitable?” Bierman turned to Eric Johnson, director of commercial management and airline affairs for Metropolitan Airports Commission, owner and operator of Minneapolis-Saint Paul International Airport (MSP), and asked how he’s balancing the interests of these different stakeholders. Johnson noted that MSP has adopted a $15 minimum wage ordinance, which is being phased in over the next three years. “We felt that if we didn’t take this step, we were going to lose employees to other jobs outside the airport market because it’s a lot easier to go to those other jobs,” he said. “We’ve also reached out to our tenants to get a sense of the costs they’re experiencing and for the most part the biggest feedback has been from our ABCDB partners who are even more challenged with some of these issues than some of the primes are.” The Metropolitan Airports Commission is currently examining four options to provide relief during the process of raising wages: 1) Implementing a below the line surcharge; 2) reducing rent; 3) offering lease term extensions; and 4) making adjustments to street pricing policies. “What we’ve learned is that each one of our operators has a different view of what the benefits would be coming from those four potential options.” Bierman then asked Murray, “Of the things that the airport authority can do to mitigate issues for concessionaires, what is the highest priority?” Murray noted a preference for looking at the issues as a whole and determining what strategic moves need to be made to achieve future goals. Mikusko added that he thinks these issues need to be addressed during the Request for Proposals process to determine which strategies make the most sense for everyone involved. Finally, Bierman asked Johnson whether these labor concerns are ultimately the airport’s problem to solve. “From my perspective, everyone has a stake in this game,” Johnson asserted. “The only way we’re going to get to a solution that addresses everyone’s needs is accommodation of the airport working with the operators working with the labor unions to bring solutions to the table.”
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Small Business Boost Panels Highlight Contract-Winning Approaches For ACDBEs BY SHAFER ROSS
Right: Three ACDBE-certified business owners took the stage, with moderator Amy Snyder, for a panel discussion on strategies for success.
Entering the airport concessions world as an Airport Concessions Disadvantaged Business Enterprise is not for the faint of heart. Airports take myriad approaches to contracting with small businesses and the onus is on the business to ensure it fully understands the process. ACDBE firms also need to ensure they are properly certified, have access to capital and understand how and when to partner with larger companies as a means to gaining access to an airport. Two panels at the recent 2020 Airport Experience Conference tapped into the knowledge of those who have experienced the industry firsthand.
Get Ready While networking is an important part of growing a small business, so is education and preparation. Clarity and content in proposals – as well as following rules to the letter – are crucial to even get a foot in an airport’s door. On top of that, a concept needs to stand out to key decision-makers. Three ACDBE-certified business owners took the stage for a panel titled: Competing as an ACDBE – Readying Yourself for Upcoming Opportunities. The discussion centered on the ins and outs of getting a concept ready to compete in the airport space. Moderated by Amy Snyder, airport property and contracts manager for the City of Boise
Department of Aviation, which oversees Boise Airport (BOI), the panel provided both valuable contextual information for the airport industry and advice for successful operation in that space. “Be mindful of what you bring to the table,” said Joya Kizer Clarke, president and CEO of Casa Unlimited. “Make sure that you’re current and relevant and have a pulse of what the industry is going to look like ten steps ahead.” Randy Hazelton, a founding partner of H&H Hospitality, admitted that he’d had very little experience with airports when his team first got started, and much of what they learned about operating was a trial-and-error process. After conquering the learning curve the company landed a contract to bring national favorite Shake Shack to the HartsfieldJackson Atlanta International Airport (ATL). “Don’t be discouraged to go after the best,” Hazeton said. “Even if it seems like you’re working with less, we all have different things to offer.” The panel even touched on the ACDBE program itself, its requirements and challenges, as well as the benefits of partnering with prime operators as an ACDBE business. “In terms of funding, it’s very challenging, because by definition when you’re ACDBE there’s a lack of collateral,” said S. Levy Foods owner Sarah Imberman.
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She said a partnership with SSP America helped pave the way for growth. “Luckily, meeting the people from SSP and having that ACDBE program in place has given me some great opportunities.”
A Flexible Approach It’s no secret that, in airport concessions, a wider breadth of offering means bigger potential for success. That said, expanding a business outside its original parameters can be daunting, not to mention incredibly challenging in an airport space, where the pool of potential customers is both very limited and incredibly diverse. At the AX Conference panel titled Finding Growth Through Diversification, participants discussed ways to enhance or shift offerings to meet stringent RFP requirements. Ron Gomes, vice president, strategic alliances for HMSHost, said being flexible is helpful when new entrants are looking to land their first airport contract. “I’ve watched people succeed and I’ve watched people struggle, and the ones who struggle are the ones who put their eggs in one basket.” The owner of Enroute Spa, Erin Clarke Humphreys, discovered this after she took over the space of another airport spa with her own concept. In addition to the types
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of services the last business had offered, such as massages, Clarke Humphreys began creating and selling her own line of bath and body care products. “I want to take care of my people and my passengers and my airport and my city,” she said. While Clarke Humphreys was already familiar with the airport space upon entering it as a businesswoman, Rosalyn Mallet, president and CEO of PhaseNext Hospitality, landed in airports once she was done making a name for herself in restaurants, which she feels adequately prepared her for business in the airport industry. “I don’t mind taking educated risks,” Mallet said. “The first step is always knowing what you’re getting into. Know what success looks like, define it for yourself. Don’t go into a business that you can’t understand or learn about.” Greg Plummer, CEO of Enjoy, Repeat, expressed similar feelings, acknowledging that, though the many entrepreneurs in an airport may be selling different items, all are looking to offer guests a memorable and successful experience. “I think everything we do moving forward will be about furthering the customer experience,” Plummer said. “It’s about having the confidence and being willing to take calculated risks. Go into it with eyes wide open.”
Above: Randy Hazelton, founding partner of H&H Hospitality, encouraged ACDBE-certified operators to pursue the best fit for their businesses, regardless of competition. Below: Panel participants discussed ways to enhance or shift offerings to meet stringent RFP requirements.
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newer operators test appeal in business pitch showcase BY SALLY KRAL The theme of this year’s Business Pitch Showcase at the Airport Experience Conference was clear: healthy is here to stay. Four different emerging businesses, all focused in one way or another on wellness, presented their concepts to a panel of industry professionals to receive feedback on their companies’ viability in the airport environment. The businesses presenting included Yo-Kai Express, Clean Juice, Eat Fit Go Healthy Foods, and PathWater. Kathleen Schafer, vice president of Mission Yogurt, served as the session’s host and the panel of experts included Kate Webb, director of concessions at Tampa International Airport (TPA); David Shaw, director of concessions and air service at Indianapolis Airport Authority; Alice Chung, director of brand portfolio and dining divisions at Paradies Lagardère; and Dave Flaherty, assistant director of business and concessions at Fort Lauderdale-Hollywood International Airport (FLL).
Yo-Kai Express Amanda Tsung, CEO of Yo-Kai Express, was first to present, noting that the fully autonomous restaurants are ideal for an airport environment because they’re open 24/7, take up just 16 square feet of space, help keep labor costs down, offer passengers a healthy, nutritious option and deliver the product in just 45 seconds. The concept is focused on ramen, but also offers other Asian specialties, all made with local ingredients and no preservatives. Each Yo-Kai Express machine features touchscreen ordering, two dispensaries and has a capacity of 88 meals. The company currently has an internal app that alerts staff when items need restocking and is
working on a customer-facing app with order-ahead capabilities. Yo-Kai Express is currently in San Francisco International Airport (SFO) and will open in Norman Y. Mineta San Jose International Airport (SJC) soon. “We’ve partnered with a lot of tech companies, as well as universities and hospitals, but I knew airports are where we should be because airports never sleep and neither do we,” Tsung said. “When passenger flights are delayed and they have no food options, Yo-Kai to the rescue.” The judges were impressed by the efficiency of the Yo-Kai machines, but had some logistical questions, including how inventory freshness is maintained. Tsung responded that each meal has a QR code with an expiration date that is
Above: Kathleen Schafer, vice president of Mission Yogurt, served as host and moderator of the Business Pitch Showcase.
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scanned daily to inform staff through its internal app. Judges also inquired about à la carte options, but Tsung said that since everything has to be prepackaged in compliance with health code standards, customizable meals aren’t possible.
Clean Juice Next up, Landon Eckles, cofounder of Clean Juice, asserted that “not all juice concepts are created equal.” What sets Clean Juice apart from others is its rapid growth and plethora of awards, including the top prize at the 2018 IFA NextGen in Franchising Global Competition. The company began in 2015, started franchising a year later, and now has 140 stores in 23 states, with 50 more stores in development. The top 25 percent of stores each make around $850,000 annually, according to Eckles, who noted that organic is now a $52 billion industry and all of Clean Juice’s menu items, including cold-pressed juice, smoothies, bowls, toasts, and soon wraps, are certified organic. The company doesn’t yet have an airport presence, but Eckles believes that a healthy option like Clean Juice would fill a need. “There are millions of people who want to eat healthy while traveling,” he said. “We’re ready to bring this concept to airports. My question is, are you ready for us?” While the panelists agreed that a concept like Clean Juice is a great fit for the airport, they were concerned about how labor-driven it appears to be. Eckles noted that labor is indeed challenging, and the company is looking at various different operational approaches to better streamline the process.
what we put in our meals.” Established in 2016, the company offers a wide variety of different meals – including breakfast, lunch and dinner – that rotate seasonally. The company has nine stores in the Midwest, and also distributes its meals to businesses, including gyms and universities. Eat Fit Go Healthy Foods is also partnering with a smart fridge company to launch autonomous refrigerators that can stock 300 meals a week, and the next frontier is standalone kiosks, which include refrigerators that store around 150 meals and built-in microwaves to heat the meals. The judges appreciated that the company’s packaging is environmentally conscious but noted that comparisons to TV dinners of the past would likely pose a hurdle, and Huppert agreed. “We get that a lot,” he said, noting that this is where the company’s focus on transparent labeling as a means of educating the consumer comes in.
Eat Fit Go Healthy Foods
PathWater
Brock Huppert, CEO of Eat Fit Go Healthy Foods, a manufacturer and retailer of pre-packaged, microwavable healthy food, began his presentation by pointing out that the word healthy can often be contentious. “It’s confusing sometimes, but our version of healthy means clean labels, portion control and being super transparent about
The final business presented, PathWater, combines healthy habits with sustainability. Gulshan Kumar started PathWater, a brand of purified water sold in reusable aluminum bottles, with four other partners five years ago. “Our mission was to create a business that made an impact,” he said. “It’s not just about making money, it’s more about
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Above: A panel of judges listened to pitches from representatives of four businesses seeking entrance or expansion in airports. .
creating a business that can actually do a greater good once we’re gone.” In August 2019, San Francisco banned single-use plastics, which was a boon to PathWater, which sells 9,000 bottles a day at SFO. PathWater can now be found in 40 states and internationally and in about 15 different airports, where it’s sold for $4 to $5 depending on bottle size, which compared to other reusable bottle brands is very affordable. The panelists loved the product but wondered about competition from big name soft drink manufacturers who might put something similar on the market. “I like to say the Cokes and Pepsis of the world are a big Boeing 747 and we’re a nimble G5 Jet— it’s a lot harder for them to turn as quickly as we can,” Kumar said. “Plus, we have a patent so we’re the only ones who can produce this bottle for the next two years.”
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FROM STADIUMS TO AIRPORTS Carlos Bernal, New CEO Of Areas USA, Shares Vision For Company Growth BY CAROL WARD
ditor’s Note: Carlos Bernal was appointed the new CEO of Areas USA in January. Bernal previously was president of Delaware North’s Sportservice division but spent part of his earlier career in airport concessions. Bernal replaces Sergio Rodriguez, who has moved on to lead Areas Iberia. Bernal has his own vision for moving Areas USA forward and, four weeks after he began as CEO of Areas USA, he shared his early thoughts with AXN’s Carol Ward. WARD: As you take over at the helm of Areas USA, what are your key goals for the organization in the current year and beyond? BERNAL: I’ve been on the job here just about four weeks [in mid-February]. I’m getting out there, trying to meet our partners, either physically or over the phone or via email. I’m connecting with our client partners as well as some of our joint venture and ACDBE partners. At a very, very high level, I think my focus is pretty simple. It’s about people and operational excellence and execution of our business model. On the people side, it’s about our associates and team members, making sure that we’re taking good care of them and in turn, they’re taking good care of our guests. I’m an operator by heart, and I want to make sure that we have all the right pieces in place to provide an exceptional experience for our customers when they come visit us. I’m focused on what are we going to do and how we are going to position our company to be the hospitality leader. I don’t mean that from a revenue or size
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Carlos Bernal, CEO, Areas USA
perspective, but [to be] the best at what we do in our business. That’s kind of my goal globally at this point in time. WARD: Can you talk a little bit about how your experience in sport service at Delaware North prepared you for the airport sector? Where are the key synergies, and where are airports starkly different from sports arenas? BERNAL: Airports aren’t new to me. I worked in the airport industry years ago, so it’s somewhat of a homecoming. Quite frankly, there are probably more similarities than you think. In a sports venue, say an NFL stadium, you have 70,000-75,000 people that you need to care for in about a four-hour time slot, and that takes a significant amount of logistical wherewithal and planning and execution. That’s not dissimilar to an airport, where you have the various challenges with the security requirements and everything else that goes on with delivering product. I think the biggest difference is, when people come to a sporting venue, they’ve made the decision to go see a game. It is a destination for folks, and they’ve consciously made that decision. I think airports are different in the sense that it’s where people begin or end their journey. Airports are generally part of the journey, they’re not the destination. The role we need to play within the airport segment is, whether you’re a leisure traveler or a seasoned business traveler, we need to make sure that we provide the right experience and the right restaurants to meet the different needs of many consumers. That’s another difference. In sports you
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basically have fans coming to the game, so you have one guest that you have to serve. In an airport you have a couple – you’ve got that leisure traveler and a business traveler, and they have very different needs. One is a little bit more relaxed and they’re looking to go on vacation and feeling good about where they’re going. The other one just wants to go from point A to point B, get there fast and wants to be taken care of en route to the other side. Quite frankly, other than those two nuances of differences among the guests coming via the venue, they’re similar. One other thing – in the sports business, you can get a hotdog and nachos and a beer or whatever. You still can have that but the hospitality, the restaurant experience, has really been elevated in the stadiums today and arenas today. It’s not too dissimilar from the airport business. Some airports have become really iconic – they are very much a pride of the city, the state, the region in terms of their elevation of the
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food, beverage and retail experience. It’s exciting for me to be part of that and to help to contribute to that next phase of our industry. WARD: What’s your early assessment of the state of play for airport concessions, in terms of competition? BERNAL: We are not the big guy on the block. We’re far from that, but that’s okay. It’s a very competitive market. We’re not cookie cutters, so our focus is more inside out in terms of how we look at things. We don’t just rubber stamp it – we don’t go into our portfolio and [select a brand] because we do that everywhere. For us it’s really going into the airport, into the community, and curating a plan and a portfolio of restaurants that make sense for that community and makes sense for that airport. We have a responsibility to create that sense of place that people can associate with. Our goal is to curate concepts and restaurants that are representative of the communities that we’re serving.
WARD: What are your growth objectives? Do you have something set in mind in terms of how big you’d like to get in the U.S. market? BERNAL: We’ve been in the U.S. market for the last 12 years, so it’s not like we’re just starting out. My thinking after four weeks on the job is that we’re not going to pursue every single RFP that comes out. We’re going to look at each very carefully, very strategically and very thoughtfully, and pursue opportunities where, first and foremost, we think we could add value. Second, we’ll look for opportunities where we believe we can have a good relationship with our partners, whether it’s the airport and other partners within that community. Third, like any company, [we’ll assess] whether we’d be financially successful. We want to be aggressive and we’re going to be aggressive but we’re not going to wildly chase every single thing that comes out. I don’t think that’s who we are as a company.
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James Obletz, Now Leading Delaware North’s Travel Division, Hopes To Expand The Company’s Footprint In North American Airports BY CAROL WARD
ditor’s Note: In mid-January, Delaware North named James Obletz as president of its Travel Division. He previously served as the company’s senior vice president of corporate development, leading Delaware North’s growth and strategic investment efforts across all its subsidiaries in the travel, sports, gaming, parks and resorts, and international sectors. In his new role, Obletz is responsible for providing oversight and strategic direction for the company’s portfolio of 24 airports throughout North America. AXN’s Carol Ward spoke with Obletz shortly after he took on his new role to discuss his vision for the Travel Division going forward. WARD: Can you describe your previous position within Delaware North and how it prepared you to take over leading the travel division? OBLETZ: I’ve been with Delaware North for about three and a half years now. I was, for that time, supporting our growth efforts, mostly around [mergers and acquisitions], or corporate development. I’d come to the company by way of an investment banking background, having spent the first part of my career on Wall Street supporting investment banking clients and similar hospitality, real estate and gaming industries. I was helping them both source and execute, as well as finance, acquisitions. I came to Delaware North with that mandate, quite frankly, helping the company develop and implement strategic growth plans, and support the
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James Obletz, president, Delaware North Travel Division
execution of those plans principally through acquisitions and related corporate development efforts. I’ve had a front row seat to a lot of our efforts at a corporate level, and then more specifically have supported each of our individual businesses in their growth efforts around buying and investing in new business initiatives. Alongside of our Travel Division, I spent time in our Parks and Resorts Division helping to secure and buy and purchase hotel assets, spent a lot of time in our casino gaming business
helping to pursue casino acquisitions. More specifically to our Travel Division, I worked a lot in 2019 on the identification and execution of our acquisition of Creative Food Group, which got us into five new regional airports in the U.S. as a concessionaire. WARD: Can you discuss your near-term goals? OBLETZ: A big part of it is really taking a full stock of the business, the people, the teams, the units, the locations. I’m really trying to get my arms around the business and understand what’s working and what isn’t, and where we need to focus our effort. I think a few things stand out. We’ve opened up some really amazing new units in new airports over the past year. New Orleans opened up in November. Austin was shortly before that, and Boston [in Q1 2020]. These are three very large programs and it’s now our turn, or our focus, to really make sure we’re optimizing the day-to-day delivery of the culinary experience and retail experience. Another big focus for me is building the team. There are a number of roles that we’re trying to fill and reshape. WARD: You’ve expanded with the Creative Food Group acquisition. Do you anticipate more along those lines, either through acquisitions or through more RFPs? Or are you just trying to digest what you’ve bit off in the past year? OBLETZ: Luckily there’s a good enough team and platform here that I think we can do
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both. We, as a company, are very growth oriented. Our travel business probably has some of the biggest white space in terms of growth across all of our businesses. Not all of our businesses have the level of growth potential – both new contracts as well as acquisitions – that we have at our disposal. I think you’re going to see us continuing to be fairly aggressive on both fronts, with new contracts at airports where we don’t exist today or where we do exist and we were trying to expand, as well as through acquisitions. We thought Creative Food Group made a ton of sense for us because the company operated in the regional markets that tend to be a little bit off the radar with some of our competitors. At the same time, it economically made sense for us given the profile of the business, the terms and the enplanement growth of some of these airports. Most importantly, we thought we could go in and continue to upgrade the experience.
This still tends to be a fairly fragmented industry, certainly on the food and beverage side, to a lesser extent on the retail side. There are a lot of ACDBE partnerships that exist, a lot of smaller mom and pop organizations, and a lot of family owned businesses. That’s certainly what we saw with Creative Food Group. Where it makes commercial sense for us, we’re going to be right there at the table because we want to continue to grow our footprint. We’re in 24 airports today, and we’d love to be in 30 within the next couple of years. WARD: You’ve mentioned both food and retail. Do you envision beefing up the retail side or are you focusing mainly on food, which is currently much larger in your portfolio? OBLETZ: From my vantage point in we’re under-focused as a company on the retail piece [about 85 percent – 15 percent in favor of food] It’s a growth opportunity for us. It’s a bit of a different business model, but the more these lines are blurred between retail
and food and beverage, the more important it is for us is to focus on both. WARD: The airport concessions industry is facing many financial pressures, with rising labor and build-out costs, and other factors that eat into profit margins. In your view, have things become unbalanced? OBLETZ: The pressures to are certainly real. Food costs, commodity pricing, labor costs, benefit costs, construction costs, all continue to be a challenge for all concessionaires, I would imagine, because they certainly are for Delaware, North. I would imagine…the airports have their own situational pressures, whether it’s demands on the part of the airlines or demands on the part of the consumers or the travelers. In my mind the solution has to be very collaborative. In other parts of our business we do this – with sports team owners or with the National Park Service, for example – working hand-in-hand collaboratively to find the right solutions to the challenges.
THE AIRPORT EXPERIENCE NEWS PODCAST ABOUT THE SHOW Airports possess some of the most unique environments. They are full of challenges and constraints that test the most seasoned professionals. Despite the obstacles, some of the most creative, innovative solutions have been produced in airports. These ideas resulted in an elevated traveler experience: from food to retail, design to passenger services and more. But the work continues and the airport experience will continue to evolve. These stories will be told here. The Airport Experience News Podcast, hosted by Ramon Lo, features conversations with airport industry experts, operators and executives who continue to ask questions, challenge the standard and take risks.
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A CUTTING-EDGE RIDE Airports Offer Self-Driving Car Experience To Travelers BY SHAFER ROSS
fter picking up checked luggage, many travelers’ first priority after landing is to catch a shuttle or call a car service to take them to their destination. With a recent announcement from global technology company Aptiv, as well as a new test program by Dallas/Fort Worth International Airport (DFW), passengers may soon be able to ride a driverless vehicle at the airport. During this year’s Consumer Electronics Show (CES) in January, Aptiv announced that the self-driving cars that previously traversed the Las Vegas Strip will soon expand their reach, bringing guests to and from McCarran International Airport (LAS). The cars “will also help Aptiv and McCarran learn more about robotaxi utilization and deployment, to optimize efficient ground transportation in and out of the airport,” a release from the company said.
A
Top: The Easy Mile Mobility Assistant, or EMMA, can seat 12 and is currently roaming the Dallas/Fort Worth International’s South Remote parking lot. Above: During this year’s Consumer Electronics Show (CES) in January, Aptiv announced that its self-driving cars would soon be available to bring guests to and from McCarran International.
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Meantime, DFW announced in January, via social media, that a driverless shuttle can now be seen cruising around the airport. The Easy Mile Mobility Assistant, or EMMA, can seat 12 and is currently roaming the airport’s South Remote parking lot, looking for guests to transport. “EMMA has hit the road!” reads the tweet announcing the vehicle’s deployment. “DFW is piloting a new program to use autonomous vehicles to transport passengers to their shuttle.” Self-driving cars have been on car companies’ radar for some years now; the idea of a fleet of totally autonomous vehicles that doesn’t need to be manned is, to say the least, appealing to facilities like airports, where transportation options must be provided for guests. “Data has shown that a significant portion of ride-hailing demand comes from passengers traveling to and from airports,” said Karl Iagnemma, president of Aptiv Autonomous Mobility, in announcing the new program with LAS. “We look forward to working with McCarran International Airport to demonstrate that self-driving cars can soon improve their customers’ mobility experience.” Officials at DFW say that they haven’t ruled out the possibility that driverless vehicles could be used elsewhere in the airport, as well. Transporting food from warehouses to outlets, retail items to stores and even baggage from plane to claim – there is a great deal of potential for unmanned vehicles. While DFW has deployed EMMA in one of their parking lots, at press time Aptiv’s cars had not yet begun picking up passengers at LAS.
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