Airport Experience News - July/August 2021

JULY/AUGUST 2021 / V19 N235

TO-GO COCKTAILS BOOST RE VENUE SERVICES AND AMENITIES

REBOOT Blurring The Line BETWEEN F&B AND RETAIL

Labor Challenges CURB F&B REVIVAL

AX Conference KEYNOTE SPOTLIGHT

GET TO KNOW THE NEW

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12 Best of Both

Food and beverage and retail have traditionally been two unique offerings in airports, but recent years have seen some merging of concepts, a move hastened by the pandemic and a need for more grab-and-go food and drink options.

16 Bottoms Up

Emergency orders that allowed foodservice establishments to continue serving alcohol despite dine-in restrictions also allowed many airport concessionaires to sell adult beverages to travelers to take with them on the go. The result was a welcome boost to bottom lines.

20 Reopening Roadblocks

Food and beverage demand has rebounded in airports during the summer travel surge, but now operators are facing new challenges, the most prominent being the lack of front-line workers crucial to meeting passenger expectations.

26 Keynote Spotlight

Erica Orange, executive vice president and chief operating officer for the Future Hunters and keynote for this year’s Airport Experience Conference, discusses ways to appeal to a new traveler and stay relevant in a new landscape.

28 ACDBEs On The Rebound

The pandemic was devastating for many airport concessions businesses, but many are building back despite extraordinary pressures.

3 Letter From the Editor-in-Chief 4 Data Check

32 One-On-One

6 Latest Buzz

34 Advertising Index 35 Before You Take Off

Survey results recently released by TripAdvisor suggest the national rollout of the COVID-19 vaccine is driving a renewed interest in travel.

LaGuardia Airport’s Terminal B redevelopment, the largest P3 project in U.S. aviation, is nearing completion.

9 Director’s Chair

Detroit Metropolitan Wayne County Airport completed a four-phase concessions overhaul right before the world locked down in March 2020. Director Chad Newton discusses weathering the storm and the sputtering return of leisure travel.

Specialty retail was challenging even before the pandemic, and with more people shopping online now than ever before, travel retail is adapting. Marco Passoni of TW.O & Partners discusses adapting the specialty retail experience for the traveler of tomorrow.

In May, a competitive skateboarding event featuring prominent names in local scenes around the country took place in a dormant terminal at Louis Armstrong New Orleans International Airport.

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TEAM Desiree Hanson

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Melissa Montes Publisher

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Business Development Manager

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Senior Reporter

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Airport Experience® News Is a Division of CLARION Events 6421 Congress Ave., Suite 107 Boca Raton, FL 33487 Phone 561.257.1026 Fax 561.228.0882 To subscribe visit https://airportxnews.com/subscribe/ ISSN: 1948-4445 Copyright © 2021 Airport Experience® News, all rights reserved. Any reproduction of this magazine is strictly forbidden without prior permission from Airport Experience® News.

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7 8/2021

Dear Readers, JULY/AUGUST 2021 / V19 N235

TO-GO COCKTAILS BOOST RE VENUE SERVICES AND AMENITIES

REBOOT Blurring The Line BETWEEN F&B AND RETAIL

Labor Challenges CURB F&B REVIVAL

AX Conference KEYNOTE SPOTLIGHT

Airports are crowded, planes are full – North American travelers are fueling new vibrancy in air travel this summer. It’s exciting to see new life in our industry after more than a year of dismal news.

The crisis is far from over, of course. Even if business travel bounces back this fall and international traffic accelerates, it will still take years for many operators in the industry to recoup the losses incurred during the pandemic.

Still, this summer’s leisure demand is more than many expected, hinting at good things to come.

This issue of Airport Experience News highlights some new or accelerating concessions trends, such as the blending of the food and retail offering, the expansion of to-go cocktails and new retail approaches for success. It also spotlights one of the key problems that has emerged from the pandemic: the lack of people willing to work the service positions that are crucial to delivering a stellar passenger experience.

The next issue of AXN will be our annual Conference issue, a special, printed edition of AXN that will only be available at AXC. Now is the time to register to join us at the Gaylord Texan in Dallas, August 15-18 for the Airport Experience Conference. This is one of the first opportunities for our industry to connect after more than a year of virtual events, and we look forward to seeing you all there!

For full details on the AX conference, please check out our conference website at: https://conference.airportxnews.com

Best regards,

Carol Ward Editor-in-Chief Airport Experience News

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DATA CHECK

HAVE SHOT, WILL TRAVEL Tripadvisor Research Reveals COVID-19 Vaccines Driving Demand

BY CAROL WARD Attitude to Travel in 2021 Compared to Travel Pre-Pandemic (Market Survey Responses) accine rollouts globally are driving trips travelers are actively researching on increasing demand for summer the platform – with consumer sentiment vacations, with vaccinated travelers analysis gathered via traveler surveys in six 75Z% more likely to stay longer and spend more major international markets, exploring the on50% their trips than unvaccinated travelers, latest in traveler attitudes and confidence. according to data released in June by travel The report identifies clear behavioral guidance platform Tripadvisor. differences in how vaccinated and 25% The report, entitled “A Shot in the Arm unvaccinated travelers are thinking about for Travel? Examining the Vaccine’s Impact travel, with vaccinated travelers more on Leisure Travel Demand,” combines likely to be booking vacations and to be Global us UK Singapore Australia Italy Japan behavioral analysis of Tripadvisor’s firstplanning to stay longer and spend more party search data – revealing the type of when they travel. More Determined to Travel More Cautious About Traveling Want to Travel as Much as Before

V

100%

Attitude to Travel in 2021 Compared to Travel Pre-Pandemic (Market Survey Responses) 100% Source: X

75Z% 50% 25%

Global

us

UK

More Cautious About Traveling

Singapore

Australia

Want to Travel as Much as Before

Italy

Japan

More Determined to Travel

Have You Booked or Are Planning to Book at Least One Vacation in 2021? (Global Survey Responses) International

Source: X

Vaccinated Travelers

21%

5% Domestic

47%

51% 32%

19%

Planning to Book Booked

4 Have YouA XBooked N E W SorJ Are U LY/A UGU StoT Book 2 0 2 1at Least One Vacation in 2021? (Global Survey Responses) Planning International

Unvaccinated Travelers

25%

34%

In countries like the U.S. and the U.K., where the vaccination rollout has reached large swathes of the adult population, travelers are pushing the tourism recovery forward. At the other end of the spectrum, countries where the vaccine rollout is at a less advanced stage and new variants of Covid-19 have impacted local populations – particularly across the Asia-Pacific region – are experiencing a slower recovery in leisure travel demand.

“Higher income millennial travelers were driving the demand for leisure travel this past spring, but heading into the summer the age demographic of travelers now booking up vacations has broadened significantly, at least in countries where large populations have been vaccinated,” says Stephen Kaufer, CEO and co-founder, Tripadvisor, Inc. “If ever we needed proof that vaccines are the key to long-term recovery in the tourism sector, our latest trend data provides it.”

The report showed that 51 percent of U.S. respondents plan to take a summer vacation somewhere in the U.S., and 22 percent plan on taking a summer vacation abroad. International travel will likely get a bigger boost in the longer term. The Tripadvisor research showed that active international trip planning is well underway with consumers targeting the latter half of 2021 for trips abroad.

When surveyed, roughly one-third of vaccinated travelers globally said they had booked a domestic vacation, of whom 80 percent agreed that the vaccine had been a factor in their decision to book. 21% By comparison, just 19 percent of unvaccinated travelers had already booked a domestic trip. Among those yet to be vaccinated, 48 percent of those planning a domestic trip are waiting to receive at least one dose of the vaccine before booking.

AXiNterviews connects industry leaders with Airport Experience ® News reporters for oneon-one video conversations covering a range of subject areas.

TO WATCH OUR INTERVIEWS WITH INDUSTRY LEADERS, VISIT AIRPORTXNEWS.COM/AXINTERVIEWS

LATEST BUZZ

TERMINAL B TAKES CENTER STAGE LGA’s Terminal B Redevelopment, U.S. Aviation’s Largest P3 Project, Nears Completion

BY DAVID WARD

Above: Terminal B’s interior includes touches that evoke New York City’s iconic landmarks, such as this water-feature with the image of the Chrysler Building projected into it.

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he Port Authority of New York & New Jersey and LaGuardia Gateway Partners may be getting the grudging respect of even the most cynical New Yorker as the organizations near completion of the largest public-private partnerships in U.S. aviation history, the $4 billion redevelopment of LaGuardia Airport (LGA) Terminal B. The nearly six-year project managed to remain on schedule amid heavy passenger traffic before the pandemic hit and the institution of COVID protocols for construction workers during the pandemic.

PANYNJ is the owner of LGA Terminal B and played a key role throughout in ensuring the massive infrastructure overhaul continued to remain on schedule. An

T

Authority spokesperson says the second half of the West Concourse, the West Pedestrian Bridge, and the balance of the apron pavement adjacent to the West Concourse are the only major projects remaining, with early 2022 as the expected completion date.

For long-time air travelers, many of whom knew firsthand the short-comings of the former LGA, the new Terminal B is a revelation. LaGuardia Gateway Partners is composed of Vantage Airport Group, Skanska, Meridiam, and JLC Infrastructure for development and equity investment. Vantage Airport Group leads the redevelopment program and management of Terminal B, with Skanska Walsh as the design build joint venture, with HOK and WSP for design.

LATEST BUZZ

Right: The new Terminal B at LaGuardia Airport features energy-saving additions, including windows with non-glare daylighting and passive shading to provide plenty of natural light as well as views of the airfield.

The project was humming along in early 2020 and was able to stay on schedule despite the disruptions caused by COVID19. “When the pandemic hit, we were just a few months away from the opening of the largest milestone in the project – the Terminal B Arrivals and Departures Hall,” says Stewart Steeves, CEO of LaGuardia Gateway Partners. “With only interior work remaining, the reduced passenger volume didn’t really impact our construction schedule.”

L a G u a r d i a G at ew ay Pa r t n e r s established new COVID safety protocols for everyone working on the project, Steeves says, adding, “Our team did an amazing job of staying focused on completing the Arrivals and Departures Hall while keeping safe.”

“Keeping the construction schedule ongoing while working in an operating environment has been the essential challenge at LGA,” the PANYNJ spokesperson adds. “Tight coordination between the construction team and airport operations was necessary to ensure that the impact to the airport operations was minimized. During COVID, the challenged shifted significantly to ensuring safety and being able to safely progress work and manage issues related to supply chain.”

Project Milestones The new four-story, 850,000-squarefoot Arrivals & Departures Hall opened to passengers in June 2020.

The steel-framed terminal includes separate f loors for airline check-in, baggage drop-off and pick-up, and security, with most of the food, beverage and retail options, along with a public art program on the higher fourth level.

The new terminal will eventually feature dual pedestrian bridges leading from the Arrivals & Departures Hall to the gates. When the second bridge opens

early in 2022, LGA will be the only U.S. airport with aircraft taxiing under two pedestrian bridges.

The design of the bridges, which are built above the old facility, enabled airport officials to keep the original terminal operational during construction. When complete, it will provide two extra miles of taxiway space at the busy airport.

The new Terminal B features a “common-use” design that allows airlines to move easily within the terminal, expanding or shrinking their square footage as needed.

The generous use of non-glare day lighting, passive shading, natural local materials and storm resiliency boosts energy efficiency. LaGuardia Gateway Partners is targeting LEED Silver certification for sustainability. An efficient airfield infrastructure and layout also provides the potential for additional reduction of the airport’s overall carbon footprint due to lower fuel demands from taxiing aircraft.

LaGuardia Gateway Partners and PANYNJ also designed a simplified and intuitive circulation network comprising over eight miles of new roadway and 20 new bridges that provide connections to and from the airport to all of New York City.

Redefining The LGA Experience With four levels, the new Terminal B was able to include plenty of new passenger amenities while avoiding bottlenecks in the road traffic that runs in and around the airport.

Level 1 features the Welcome Center and curbside for buses, including MTA, on-airport buses and hotel shuttles. Level 2 is focused on arrivals with nine baggage carousels and two oversize luggage belts.

Exterior areas include taxi stands and private vehicle pick up as well as access to the parking garage and for-hire vehicles.

Level 3 includes 75 ticket counters located within four large check-in islands, 105 self -service kiosks, a TSA security check point installation and a spacious recomposure area immediately post-security.

All departing and arriving passengers pass through Level 4, where the majority of the shops, restaurants and services are located, all post security. Dining includes sit down restaurants, a food court area, grab-and-go and a lively bar, and seating areas for relaxing.

Among the stores that remained open for large parts of the pandemic are Mad Avenue Market by Hudson, McNally Jackson Books and District Market. LGA Terminal B Arrivals & Departures Hall restaurants include an airport location of the Brooklyn

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LATEST BUZZ

Above: Terminal B’s Level 4 features shops and multiple dining options to enhance the passenger experience.

Below: The new terminal will eventually feature dual pedestrian bridges leading from the Arrivals and Departures Hall, making LGA the only U.S. airport with aircraft taxiing under two pedestrian bridges.

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landmark Junior’s, Shake Shack and Zaro’s Family Bakery.

“When we opened the new Arrivals & Departures Hall back in June 2020, the pandemic kept many of our new shops and restaurants closed,” says Steeves. “With passenger volumes increasing, we are excited to see more and more of these finally opening.”

This summer, new restaurant Mulberry Street from NYC Chef Marc Forgione opened, as did Hill Country BBQ in the food court.

Also scheduled to debut this summer is The Dean, a 5,000-square-foot shopping emporium featuring fashion-forward men’s clothing and accessories from Marshall Retail Group.

Steeves adds that FAO Schwarz and Irving Farm Coffee, both also recently re-opened in the Terminal B Eastern Concourse.

Even with plenty of concessions up and running, Steeves adds there are still opportunities for additional stores and restaurants that will be available in the latter half of 2021.

“We have just launched a [competitive sealed proposal] for two units focused on desserts, coffee and snacks in our Arrivals & Departures Hall,” he says. “These units are designated for ACDBE operators. We will also have more concessions in the final phase of the western concourse when it opens in early 2022.”

While opening the Arrivals and Departures Hall during the early months of the pandemic made for somewhat of a low-key celebration, Steeves says that shouldn’t take away from the overall achievement.

“This is truly one of the most complex airport construction projects ever undertaken and we are delivering our stateof-the-art facility on time and on budget – even in the midst of a pandemic,” he adds.

“Our project design included innovative construction phasing that allowed us to keep the original facility operational while building the new in front of, behind and even over top the existing building. As each phase is dependent on the previous phase finishing on time, we have had to remain incredibly focused on schedule.”

The new Terminal B is now more than 80 percent complete and should be fully open early next year.

DIRECTOR’S CHAIR

DETROIT MOTION

Hard-Hit By The Sharp Drop-Off In Business and International Traffic, DTW’s Newton Sets Course For New Growth

BY CAROL WARD

ditor’s Note: Detroit Metropolitan Wayne County Airport (DTW) was in the fourth of a four-phase concessions refresh for its North Terminal (now renamed the Warren Cleage Evans Terminal) when the pandemic hit, forcing an abrupt halt to progress and, like other airports, a sharp drop in passenger traffic. Now 16 months later, leisure travel is vibrant but business and international travel, on which DTW relies heavily, is only showing modest gains.

Chad Newton serves as CEO of the Wayne County Airport Authority (WCAA), the independent governmental entity that operates DTW and Willow Run Airport (YIP). AXN’s Carol Ward spoke with Newton about the pandemic’s impact on the airports and his strategy for navigating back to pre-pandemic levels.

E

Above: Chad Newton, CEO, Wayne County Airport Authority

WARD: You’ve spent about two years, I think, at the helm of DTW. And you were interim director before that, correct?

NEWTON: It’s actually been a little over two years as a permanent CEO. I was appointed interim CEO in July of 2018 and permanent in November of 2018. I’ve been at the airport for over two decades. I started here in 1999 and I’ve worked my way through various positions.

WARD: Obviously 2020 was a difficult year for everybody. How did you manage through the pandemic and what is the outlook now for DTW? NEWTON: As soon as COVID hit the Detroit area, I knew that we had to make some significant changes and we had to react quickly. One of the very first things that we did as an organization is we transitioned all of our employees who could work from home to work from home. Obviously, we have essential workers who had to remain here – we are a part of a critical infrastructure and we had to stay open – but anybody who could possibly work from home did. We’re going through the transitional period now where we’re starting to bring our folks back.

Working away from the airport campus for well over a year has been a struggle, not only for me but for a lot of our staff.

WARD: I assume traffic’s coming back for you like it is for most airports. Can you give me an update on where you are now?

NEWTON: Traffic is definitely coming back.

We’re seeing a lot of leisure travel. As with most other airports our size, there’s a lot of pent-up demand and people are traveling now that the restrictions are lifted and the number of vaccines has increased. We’re seeing an increase in the leisure area but we’re not seeing the increase in the business travel that we rely on. So, we’re definitely heading in the right direction, but we’re not anywhere near where we want to be. For this year we’re still forecasting about 22 million passengers. In 2019, we had nearly 37 million passengers.

It’s a big difference.

WARD: You have a larger than average international traveler base. Are you seeing any movement there?

NEWTON: No [as of mid-June interview].

There are international flights that are open, so we have Asia open, but Europe is still not open for the most part. A large part of [our international travel] is business travel, and business travel, whether it’s international or domestic, is just not where it needs to be.

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DIRECTOR’S CHAIR

Left: DTW has resumed welcoming non-ticketed passengers in the secure area of the airport, but demand has been lackluster..

WARD: Turning to concessions, you had a

Above: Detroit Metropolitan Wayne County Airport has seen leisure traffic bubble up this summer, but business and international travel are still relatively stagnant.

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food and beverage program refresh come to fruition just ahead of the pandemic. What’s the status?

NEWTON: We were in the middle of a North Terminal refresh program where we were bringing in all new contracts. It was a four-phase approach and the last phase was interrupted by COVID. We got most of the restaurants and our retail shops opened before COVID hit but we had to put a pause on the final phase. I am pleased to say that the Jolly Pumpkin restaurant did open in March of this year. We’re still working with some of the other retail shops and restaurant opportunities that may or may not open.

WARD: How are concessions performing, and do you have enough open to serve passengers?

NEWTON: Definitely, the concessions are opening up as quickly as we can. This is not a problem that’s unique to DTW, but we don’t have the staff – concessionaires can’t get enough people onboarded. Our demand is increasing in proportion to our air travel.

We do plan to be fully opened hopefully by the end of this year, as long as the demand is there. If the demand’s not there, we’re not going to force people to open. If everybody did magically open tomorrow there wouldn’t be enough passenger traffic to give them the type of business activity that they would need to flourish.

WARD: Early on, did you offer rent relief or MAG relief or waivers?

NEWTON: We did offer relief that was based on their contract. We decreased their MAG by the percentage of the decrease of enplaned passengers. We forecasted what we believed would be the appropriate amount – we came up with 50 percent decrease. Whether you were open or not, you were expected to pay your 50 percent because we’re a residual airport.

WARD: Prior to the pandemic you had the DTW Destination pass allowing visitors to go through security and access the secure side. I’m assuming that wasn’t in place during the pandemic, but what’s the status now?

NEWTON: As soon as COVID hit we put it on pause. It reopened August 31st of last

DIRECTOR’S CHAIR

Left: DTW’s North Terminal (now renamed the Warren Cleage Evans Terminal) was in the final stages of a major concessions refresh when the pandemic hit. Many of the new locations have yet to open.

year. Because of people’s fear of coming into the airport, before the vaccines were rolled out, it hasn’t been as popular as it once was.

I’m confident that it will be as popular as it was and actually will grow in popularity. It’s a great program.

WARD: Are there any new technologies that you’re rolling out in the terminal, either through concessions or in passenger processing to ease the passenger journey?

NEWTON: Like most restaurants, our concessionaires are using the QR codes for their menus and touchless payment options, which a lot of our passengers are commenting that they really appreciate. We’re also partnering with our concessionaires on any ideas that they want to bring forward. We want to be on the front end of this but we certainly we don’t mind borrowing other people’s ideas either. In March, Airports Council International recognized us as the best airport in our class between 25 and 40 million passengers [the 2020 Airport Service Quality award]. Part of the reason is because of the cleanliness of our facilities and because of the great options for food and beverage and retail

stores that we have.

WARD: Moving to airport infrastructure, are there any big changes going on, particularly in the terminal area?

NEWTON: As you can well imagine, COVID-19 really set us back in our heels and we had to push pause on a lot of the larger projects. But we exceeded expectations and co delivering a new central deicing facility, which here at

DTW was long overdue. I’m really proud of the team that got that done. We also just went through a lighting upgrade and road repair on our roadways here.

In our terminals we’re not at capacity. In the McNamara Terminal we have the B Concourse and the C Concourse. Half of the C Concourse was shut down prior to the pandemic and it’s still shut down.

There’s just not enough demand right now.

We have a lot of room to grow here.

Right: DTW had plenty of excess capacity even before the pandemic, and has plenty of room to grow as global travel rebounds.

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Above: Hudson has deployed an integrated model for years, with a line of “Traveler’s Best” graband-go products including several pre-packaged food and snack options.

BY ANDREW TELLIJOHN COVID-19 drove many changes to the industry, forcing the implementation of technological enhancements that created a more touchless experience for travelers weary of getting too close to others.

It also furthered the increasingly popular, sometimes controversial blurring of the lines between food and retail in airport concessions programs.

Long gone are the days where food was sold solely in food outlets and kept separate from news, gift, essentials and convenience stores. The shift started years ago with bottled water, which begat additional line-blurring concepts, such as coffee shops in bookstores.

But with all concessionaires struggling mightily to find the staff necessary to reopen their venues, passengers have increasingly turned to grab-and-go options offered at retail shops to get their food fix before boarding.

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“An integrated traveler experience, especially within the food and beverage space, has always been a prominent strategy and driver of growth for us,” says Tom Waldron, senior vice president of food and beverage at Hudson.

“When the pandemic hit, this strategy became much more essential. Many operators were forced to temporarily close their sit-down restaurants at the same time airlines were suspending their in-flight services. This left a big need for both travelers and concession programs.”

Flexibility At MSP Minneapolis-St. Paul International Airport (MSP), which has typically kept food and retail relatively separate, relaxed its policies during COVID to help make sure passengers’ needs were met, says Eric Johnson,

director of commercial management and airline affairs.

The airport did more promotion of its Grab and AtYourGate programs and loosened the reins on its grab-and-go and liquor sales rules to try and help operators better serve their travelers.

“It comes down to just providing as many options as you can to the traveling public,” he says. “People’s opinions and sensitivities have all changed because of this. People used to be comfortable with going in and sitting at an airport bar with people on either side of them and not thinking twice about it. Now, there are some people who are like ‘I don’t know if this person next to me is vaccinated, so I don’t want to go sit next to somebody, but I still want to have a drink. What are my options?’”

Johnson says he’s uncertain about the longevity of the changes. The airport, he says, will analyze the numbers as the summer traffic rush hits and as vaccination percentages increase, to see if the desire for such flexibility remains and to determine whether the flexibility helped or hurt overall sales. But the move during COVID received little to no blowback.

“I think everybody understands the changing sensitivities around this,” he says.

“So far we have not heard anything [negative].”

Far From New While airports had to alter course at times during COVID, the mingling of food and retail has been taking place for a while. Doug Yakel, spokesman at San Francisco International Airport (SFO), says the District Market in Terminal 3 that opened there in 2017 merged a traditional newsstand with a convenience store and specialty retail to create a mini-department store. There is a self-serve coffee with a broad category of snacks and beverages.

The concept has won awards. And the 5,200-square-foot venue, which is about five times the size of a traditional SFO newsstand, earns more that it would have if subdivided.

“We like this use a lot,” Yakel says. “It’s a one-stop shop for our guests.”

And Ink by Hudson, a bookstore operated

by Hudson at Boston Logan International Airport (BOS) has a Dunkin’ operation inside that has been popular. Grab-

and-go in its core stores has also long complemented convenience offerings.

“We’ve been successfully deploying this integrated model over the years,” says Hudson’s Waldron. “We don’t consider it blurring the lines in retail, but rather delivering integrated traveler experiences.

In order to drive customer loyalty and trust, we’re constantly looking at how we can optimize convenience and product selection within our stores, whether new or existing.”

It’s likely to continue evolving, he adds.

“We truly believe this integrated experience can work just about anywhere,” Waldron says. “The airport is such a fastpaced environment that we as retailers have an obligation to make sure that travelers can easily and quickly get freshly prepared food and everything else they need, preferably in only one stop before they board their plane.”

Dunkin’ appreciates the opportunity to

Below: Ink by Hudson and Dunkin’ opened at BOS in 2019, combining an independent bookstore with the popular donut and coffee purveyor.

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Left: HMSHost Corp. has added retail options to many locations, such as the 1897 Market at CLT, a restaurant that also incorporates locally and regionally inspired gift options emphasizing the Carolina experience.

partner in those hybrid locations, according to Chris Burr, director of nontraditional development at Inspire Brands, which owns Dunkin’ and several other brands.

While the company’s first choice would be to have a location that offers its full menu of products, it also has a portfolio of concepts that allows it to “adjust the menu to the venue,” he says.

“One of the benefits of Dunkin’ is we can be very flexible with our concept,” Burr says. “If we can be full menu, we want to be, but if there is an opportunity to work with one of our retail partners for coffee and bakery in a bookstore, we have the flexibility to do that.”

That flexibility has paid dividends in

Above: Paradies Lagardère recently opened a new Vino Volo with a full bar, and the adjacent locally themed Moisant Market, with grab-andgo foods, a coffee bar and other goods.

Right: Plum Market, a Paradies Lagardère concept at DTW, adapted a street location to the airport. It includes a coffee bar, counter service, sandwiches and a salad bar.

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recent months. As traffic at airports returns, its various locations have often been among the first to re-open or, in some cases, they never closed, because the company can nimbly change its menus to meet the needs of its operating and airport partners.

“It’s portable, it’s disposable,” Burr says.

“People could get a sandwich in disposable packaging and go sit in a corner and be by themselves. It worked perfectly.”

Retail Within F&B Initially the allowance of water and other consumable items at news and gift shops was controversial, with food operators concerned about the potential

for lost sales. Today, it seems to be standard operating procedure for both food and retail operators.

HMSHost Corp. has long been blending the two, often incorporating a retail theme inside restaurants that includes regional gifts and snacks as part of a grab-and-go selection, says Stephanie Havard, executive vice president of restaurant development, design and construction.

The 1897 Market at Charlotte International Airport (CLT), for example, incorporates those locally and regionally inspired gift options that help play up the “Carolina experience.”

“It’s ideal to offer a limited assortment of retail amenities in restaurants,” as well as to facilitate travel convenience, especially where real estate is limited in the terminal, Havard says. “While blended food and retail space can offer convenience to travelers, dedicated restaurants and separate specialty retail stores will always have greater selection for travelers.”

While at least some of the further blurring of lines has been driven by COVID, such concepts have been continually evolving over time. SSP America has several grab-and-go locations of its own, both driven by COVID and the overall evolution of concessions, says Pat

Murray, senior vice president of business development at SSP America. The trend will continue to drive innovation, he adds.

“We have to rethink and define ourselves in ways that are different,” Murray says.

Innovation Continues Such concepts can increase convenience for passengers and solve space challenges and other problems, says Gerry Savaria, executive vice president at Paradies Lagardère.

“It can be a good way to complement a program overall, though I don’t know that I would call it a one-size-fits-all or a magic bullet to solve all problems,” he says. “It can solve many problems, if you start with the consumer in mind. Their main purpose for being at the airport is to catch a flight. Not everybody has the time or the want to make multiple stops on their way to the gate.”

Paradies Lagardère has long had coffee as an adjacency to several of its travel essentials stores. A few years ago, the company introduced Plum Market at Detroit Metropolitan Airport (DTW), adapting a street location to the airport.

It includes a coffee bar, counter service, sandwiches and salad bar.

More recently, the company has opened a new Vino Volo concept at Louis Armstrong New Orleans International Airport (MSY) that includes not just wine and small food items, but a full bar that includes local beers, and the locally themed Moisant Market, with grab-and-go foods, a coffee bar and some other goods.

“It’s that sort of adjacency that makes sense to people,” Savaria says. “They’re just looking for something they can grab quickly.”

Marshall Retail Group has tapped into this trend in recent years as well.

At LaGuardia Airport (LGA), The Dean mixes ready-to-wear, luxury travel essentials, gifts and grooming services, but it also incorporates a Magnolia Bakery and a whisky tasting area adjacent. Roddy McOwan, chief development officer at Marshall Retail Group, notes the concept provides “all additional experiential elements within a great retail experience.”

In addition, “The Well” at Sacramento

International Airport (SMF) provides a drink well, where customers refill their own beverage container or buy and fill a drink bottle purchased in the store. And the soon-to-open Fresh Market at Nashville International Airport (BNA), will include farm-based products that are pre-made, offering a fresh approach to the grab-and-go trend.

“Customers don’t want the same turkey sandwich everywhere, albeit there is always a place for that,” McOwan says. “Our task is to continue to innovate.”

McOwan says the change accelerated in recent years as passengers needed a fast, convenient way to find food as airlines began reducing in-flight food programs.

Both food and retail players adapted, with food operators adding grab-and-go counters.

“Sometimes that relates to the menu, and on other occasions they add to the existing menu items for take-out with additional ‘standard’ sandwiches,” McOwan says.

Retailers in the travel convenience category also added a range of sandwiches, salads and other supplemental snacks that help satisfy demand. “Over the last few years, pre-COVID, that was a successful strategy, clearly without impacting any of the food and beverage revenues yet helping to grow revenues per passenger across the board,” he says.

With many restaurants closed due to COVID, the convenience elements have remained popular “not only to satisfy the need for ‘in-flight’ replacement, but also to satisfy the need with restaurants still struggling to get open,” McOwan says.

Above: Meel Farm to Flight, a fresh market that will offer farm-based products that are pre-made, will put a new spin on grab-and-go, according to Marshall Retail Group.

Evolution Is Larger Than This As food operators continue to face challenges finding employees, graband-go spend at retail stores has grown tremendously, even above pre-pandemic levels in some locations, says Paul McGinn, president of Marketplace Development.

Independently of Waldron, he cited the Ink

by Hudson and Dunkin’ at BOS as a hugely successful concept that grew out of the need for some more traditional newsstands to diversify.

“People still crave the experience of holding a book in their hands,” he says. “It works out great. As people are queuing for coffee, they are in the bookstore.”

But McGinn also suggests this is all part of a larger evolution of concessions.

Passengers are now using technology to order and have food delivered to gates. And full-service, sit-down restaurants have not gone anywhere. So, a lot of these new ways of providing services are just balancing ways to make sure customers are served.

“One of our goals is to have merchandising in the airports we work with that addresses the wants and needs of all types of passengers,” McGinn says. “Everybody is seeking ways of providing additional service that will turn into additional revenue. …

Ultimately, it’s the passenger who really decides.”

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Thanks To Loosening Restrictions, Bars Are A Bright Spot In Airport Concessions

BY SALLY KRAL Since March 2020, many states have legalized the sale of alcohol to-go to help restaurants and bars stay afloat while their regular service has been drastically affected by the pandemic. There are currently 39 states, plus the District of Columbia, where this change has been made – and this May, 15 of them decided to make to-go alcohol sales permanent, while another six extended the temporary measure until at least 2022.

With this major landscape change, airport restaurants and bars have also been afforded the ability to serve travelers take-away alcohol, allowing them to capture demand despite dine-in restrictions.

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Left: Thanks to stadium licensing, concessionaires were able to allow guests to walk the terminals with alcohol purchased at their restaurants and bars in a growing number of airports. (Paradies Lagardère’s Bar Louie pictured.)

“In the past six, nine, 12 months we’ve become very flexible with many things that I thought we would never be able to do in the airport, and one of them in California was letting people walk around the terminals and gate area with beer or liquor,” says Jim DeCock, interim director of revenue generation and partnership development for San Diego County Regional Airport Authority. “With no seating or limited seating in bars and restaurants during early COVID-19 restrictions, this was a great benefit to concessionaires to increase their add-on sales, and to passengers from a service perspective.”

To-go alcohol sales are currently a temporary allowance in California, but there’s a good chance it will become permanent, as a bill proposing just that passed unanimously through the state senate in May. At press time, the bill was awaiting consideration by the state assembly. If passed there, it will go to the governor’s desk.

Some airports already allowed for travelers to enjoy to-go beverages throughout the terminal, even before COVID-19 and before many state laws began to change. St. Louis Lambert International Airport, for instance, has been able to offer this service since 2018.

“We were looking for an opportunity to

increase sales in underserved areas of the airport and improve our customers’ experience,” says Roger Lotz, public information manager for the airport. “We started the process by talking to our airline partners, and once they were on board, we went to St. Louis County officials and finally worked a state law change through the Missouri legislature.”

Lotz notes that the reaction to the change has been very positive for everyone involved. “Sales and revenue have increased, and passengers appear to enjoy the amenity. Most notably, there have been no complaints regarding this new option, and the fear of over-served passengers attempting to board flights has never materialized.”

John Glenn Columbus International Airport (CMH) has been one of the more recent airports to allow to-go alcohol sales, since Ohio law only began allowing for it in the airport as of this April – but it’s a permanent change. “Many of our customers wanted the option to grab a beverage and go sit elsewhere to relax or do some work prior to their departure, rather than sitting in the restaurant or bar,” says Todd Carter, senior manager of concessions for CMH. “This new amenity enhances the travel experience for those who prefer to find a quiet, distanced area to enjoy their beverage, while also allowing concessionaires to expand their reach.”

Jens Baake, president of the dining division for Paradies Lagardère, notes that thanks to stadium licensing, the company was able to allow guests to walk the terminals with alcohol purchased at their restaurants and bars in quite a few airports before COVID-19. “But the importance of this grew considerably as the amount of seating in restaurants became very restrictive during COVID,” he says. “Our bar business, like all dining and retail, was affected tremendously by the pandemic, but as we see travelers start to return, we’re

Right: Where permissible, HMSHost has added adult beverages to its existing grab-and-go kiosks and has introduced bar cart kiosks to provide more options for travelers.

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Above: When in-person dining was shut down, new laws allowing for to-go alcohol sales allowed concessionaires like Areas USA to open operations that otherwise would have had to stay closed – a bright spot in an otherwise bleak landscape.

noticing – and welcoming – a return to our bars and restaurants. The main goal is to get back to some sense of ‘normalcy’ while simultaneously making travelers feel safe and comfortable, and giving them options like to-go drinks helps with this goal.”

To-Go Is A Boon HMSHost currently offers to-go alcohol in 45 airports and is working to secure approvals to provide this offering in nine additional airports, according to Tyler Pitman, vice president of portfolio development and brand partnerships, who says there’s high demand for it.

In addition to allowing for this feature at its restaurant and bar locations, HMSHost has also added adult beverages to its existing grab-and-go kiosks and introduced bar cart kiosks over the last 14 months to provide even more options for travelers.

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“The sale of alcoholic beverages to-go has driven incremental sales by allowing us to meet the changing expectations of passengers during the pandemic, as well as the need-state of our customer base, with the majority of our guests being leisure travelers,” Pitman says. “We’ve learned what leisure travelers are looking for in food and beverage as they begin their journey and we’re adapting to provide them a variety of offerings to complement those needs. With street-side restaurants across many markets now offering adult beverages to-go, this is very much a growing trend and one that restaurant guests are clearly enjoying given the success of these new programs.”

Pitman adds that, of course, business volumes remain considerably lower than normal due to the decrease in passenger enplanements, but the company’s adult beverage mix has increased as an overall percentage of sales. “We attribute this to several factors: the larger percentage of leisure travelers during the pandemic; behavioral changes due to safety concerns; the expansion of our to-go product offerings in beer, wine, cocktails, and hard seltzers; and an increase in the number of restaurants and grab-and-go kiosks that are now offering adult beverages.”

While Richard Schneider, COO of Areas USA, can’t confidently say that sales of to-go alcohol have provided a tremendous boost in revenue given how low enplanements still are compared to pre-pandemic times, it has certainly helped. “It gave us the opportunity

to open up bars and capture the demand that was there, even while restrictions on bar seating were still in place,” he says. “And many airlines haven’t been serving alcohol in their main cabins, so a lot of folks are having a drink they may have had on the plane pre-flight instead. It’s been good – nowhere near what it was, but I think we’re starting to see some bright spots that indicate that bars are going to be resilient.”

Where to-go alcohol purchases are permissible, Delaware North is seeing an increased margin on sales, according to Brian Sterner, vice president of food and beverage operations. “With several more airports and states changing their alcohol sales policies during COVID, two-thirds of the airports where we operate were able to offer alcohol to-go and it has been a welcome boost to our business even though we’re still not to pre-pandemic business volume.”

A Hopeful Future All signs seem to be pointing to more states allowing for to-go alcohol sales to remain a permanent fixture of the restaurant and bar landscape, both on the street and in the airport, and operators have indeed relied on these sales to get through these difficult times.

“During the shutdown, to-go sales were the majority of our bar sales, so we hope the allowance becomes permanent and is adopted by all airports,” says Josh Barone, vice president of commercial for SSP America.

“As enplanements inch up, there will be passengers who want to buy a sandwich and a beer but feel more comfortable purchasing it from a grab-and-go or ordering it to-go versus sitting in a busy bar.”

And especially as restrictions on bar seating are still in effect in many areas, the ability to offer travelers the option to buy their drink and take it with them to the gate will remain crucial.

“Our bar units typically have a very small footprint, which compounds the impact of seating restrictions – so for some units you might only be able to accommodate a handful of people, which makes operating those units prohibitive,” Barone says.

Barone adds that there are other challenges impacting bar businesses right

Left: Many of SSP America’s bars have very small footprints, compounding the impact of seating restrictions, so the company has relied greatly on to-go alcohol purchases, which have accounted for the majority of bar sales since the start of the pandemic.

Below: As more and more states have changed their laws to allow to-go alcohol sales, two-thirds of the airports where Delaware North operates have made the change, which has been a welcome boost to the concessionaire’s sales.

now, including product shortages in beer, wine and spirits; the complexities of getting draft beer systems working properly again after being shut down for over a year; and the lengthy process of rehiring and retraining bartenders and servers in a very tough labor market.

Areas USA’s Schneider also points to the labor market as a major obstacle right now.

“Staffing has been a huge challenge for not only airport concession operators, but the hospitality industry as a whole,” he says. “It doesn’t matter what state you live in, what city you’re in, it’s a challenge that has to be worked through as we reopen.”

With these many obstacles affecting all hospitality businesses, any little thing that can boost sales and improve the passenger experience is needed right now and will remain relevant into the future, even when the pandemic is solidly behind us.

“We anticipate and would hope that to-go service will drive additional sales moving forward as it provides the traveler the convenience and flexibility to consume alcoholic beverages where and when they want,” Paradies Lagardère’s Baake says. “We’ll continue to focus on the travel experience and the airport bar plays an important role in that. Allowing for greater conveniences, such as more stadium licenses, helps us accomplish that goal and we feel strongly guests would both appreciate it and respond positively to it.”

Baake adds that the company plans to continue evaluating menu offerings that complement alcohol purchases. “From

branded grab-and-go programs to full menus, we’re paying close attention to evolving trends and preferences, and reacting accordingly,” he says. “A great example is how our Vino Volo offering has evolved.

Our latest opening in Louis Armstrong New Orleans International Airport (MSY) carries a full bar with a selection of beer on tap and operates an adjacent food to-go market with coffee bar.”

Indeed, as we come out of the pandemic, it will be important for concessionaires to pay close attention to how passenger behavior

has changed, and offering flexible options will be key, Schneider says. “I think even after the pandemic there’s still going to be a certain consumer that wants the flexibility to grab a margarita and go sit at the gate,” he notes. “So, there will be some shifts we need to be ready for, but I don’t think we’re going to see people shift away from going to bars entirely – we’re going to gravitate back to bars because it’s something that not only we want to do, but that we enjoy doing. You can see that as the world is reopening, on the street and in airports. We all miss it.”

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ON THE

REBOUND

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Concessionaires Weigh Many Factors As They Reopen Operations

BY SALLY KRAL

Above: Reopening has been challenging for virtually all F&B concessionaires due to changing restrictions and ongoing labor challenges. (SSP’s Ballard Brew Hall at SEA pictured.)

When the COVID-19 pandemic shut down the world, two major industries took unprecedented hits: travel and dining. For companies whose main business is solidly in both these industries – namely, airport food and beverage operators – the results were nothing short of catastrophic.

“Operating restaurants in airports is already a complex business; COVID-19 exacerbated those complexities to a level we couldn’t imagine before March 2020,” says Sebastiaan Rotteveel, senior director of restaurant development and innovation for SSP America.

And as Richard Schneider, COO of Areas USA, points out, the various rules and restrictions on travel and dining were constantly in flux during those early months after the initial shut down. “I always remind people because we forget now as things are getting better, but those restrictions were changing sometimes daily,” he says. “It had us asking ourselves questions like, ‘Do we open up seating now that we’re allowed to or do we hold off a little bit to see what’s going to happen?’ But now I think you see all of us concessionaires really trying to open up as many locations as we can.”

Indeed, all the major players in the airport dining space are raring to get back to business as usual – but this is no small task, of course. Schneider notes that Areas USA is reopening concessions practically every day, and that 57 percent of the company’s portfolio is open as of April. Delaware North is back to around 60 percent of its 2019 pre-pandemic levels, according to Tessa Lewis, manager of brands and concepts, while Paradies Lagardère is at around 80 percent reopened, according to Jens Baake, president of the company’s dining division.

For SSP America, the percentage of reopened concepts shifts every day and varies dramatically by airport. “There’s no typical timeline for any restaurant reopening,” Rotteveel says. “It’s a wellconsidered, highly analyzed and studied exercise, involving our entire organization as well as the necessary conversations with brand and airport partners. Our daily recovery meetings will be continuing for the foreseeable future.”

Early in the pandemic, HMSHost formed seven cross-functional regional opening teams, says Stephanie Havard, executive vice president of restaurant development for the company, which had reopened just over 60 percent of its airport food and beverage operations in the spring. “We built these teams so that we could expedite the reopening of restaurants, knowing we would need to be ready when passenger traffic started to rebound,” she says. “From hiring back furloughed workers to renewing badges, we’ve kept a forward-looking approach so we can tie the velocity of our actions to the uptick in travel.”

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Above: Areas USA’s StrEat concept in Newark Liberty International Airport has been performing well since the pandemic hit because it offers grab-and-go items for travelers who are still wary of in-house dining, but also offers a bar with seating for those who are ready to get back to their prepandemic lifestyles.

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Serving The Current Customer When concessionaires first started reopening their food and beverage operations last summer, there was a clear focus on venues offering ample grab-and-go options.

“We leaned into our proprietary graband-go kiosks with convenience items early on in the pandemic because that’s what travelers were seeking,” Havard says. “Given COVID-related concerns, most travelers preferred purchasing pre-packaged items to eat in gatehold seating areas, so we kept nearly all of our Eat Well. Travel Further., Farmers Market, Ciao and Urban Market kiosks open throughout the pandemic.”

Indeed, as early restrictions on dining focused on sit-down operations, kiosks and market-style venues were a bright spot for concessionaires. And Areas USA’s Schneider says that even as seating restrictions have lifted, grab-and-go element will continue to be important. “People are still looking for convenience – they’re looking for good quality as well, of course, but they’re also looking for it to be easy for them to get in and out,” he says. “That’s where hybrid markets tend to offer some good opportunities.

Our StrEat concept in Newark Liberty International Airport (EWR) is one that really performs well for us because it has that grab-and-go, portable component, but there’s also a bar tied in.”

Paradies Lagardère’s Baake similarly points to a hybrid concept as performing well because it offers something for every type of traveler. “Our Plum Market in Detroit Metropolitan Wayne County Airport (DTW) has been doing well, as it includes a full bar, sandwiches, grab-and-go items, snacks, a coffee bar and more,” he says.

Baake adds that the company’s Fountain Bar, also in DTW, was one of the first to reopen and has also been performing well, thanks to certain operational adjustments.

“Early on we added patio seating to accommodate guests, streamlined the menu to items with less prep time and more to-go options, and enhanced the alcohol offerings, which included guests being able to bring their drinks to the gate due to our stadium license. More recently we shifted to an alcohol-only menu and sales for that category are up 50 percent in this location compared to pre-COVID.” Paradies Lagardère’s ability to quickly make changes to Fountain Bar is an example of why proprietary concepts can sometimes be easier to manage – and easier to reopen – than national or local branded restaurants.

“There’s a valid argument that proprietary restaurants provide a company with a greater span of control and flexibility around the menu, products and labor model versus third-party branded restaurants,” SSP America’s Rotteveel says. “And proprietary brands often address needs not found at street restaurants, such as the small size of the space and the need to serve passengers during all day parts.”

There are also royalty fees associated with running a branded concept, although Baake points out that almost all national brand partners have provided relief on their royalties since the start of the pandemic.

Delaware North hasn’t been favoring reopening any specific type of restaurant, Lewis notes. “It’s true that proprietary concepts allow for a concessionaire to control concept model and product offering – but only to an extent,” she says. “Outlet modifications will always be governed by traveler needs and client collaboration. We work very closely with our airport partners to determine when a restaurant or unit will reopen based on the airport’s anticipated traffic flows, hours of operation, concept type and service style, and meeting travelers’ needs. So, whether

it’s a proprietary concept or a branded one doesn’t play an outsized role in this decision-making process.”

Roughly 90 percent of HMSHost’s portfolio is branded, so that’s where the company’s reopening efforts are focused, especially considering these brands are typically located in what Havard calls A and B real estate locations, while proprietary and local concepts are usually placed in C locations. “We do this because branded concepts generally perform better for us and this is especially true for brands in the QSR and fast-casual categories such as Shake Shack, Chick-fil-A and Panera,” she says. “We prefer branded concepts with full-service restaurants, with some exceptions, if the space is good and the traffic and passenger volumes are high enough to support them.”

Areas USA’s portfolio also skews more on the branded side, and Schneider says they’ve reopened slightly more branded concepts than proprietary ones. “We’ve opened what’s best for the airport and the customer, being thoughtful of how that would affect our operations,” he says. “Now, if there was a proprietary brand that would fit those needs, we would definitely open that and look to utilize it, but really we’ve looked at it in partnership with our airport clients and flying customers.”

A Careful, Collaborative Process In most cases, concession reopenings are paralleling enplanement levels, which vary from airport to airport.

“We monitor and review all our airports’ progress and traffic closely, which is the driving factor to determine which locations we consider reopening,” Paradies Lagardère’s Baake says. “Several of our locations have been ramping up, some slowly and others very quickly. And the mix has been across national, local and proprietary concepts.

The brand recognition for Chick-fil-A is obviously outstanding so our locations have done very well there. But the same applies to our own Vino Volo brand, which has a strong following and offers something unique in each airport.”

Above: Reopening airport restaurants sometimes means making adjustments and pivots on the fly. When Paradies Lagadère reopened its Fountain Bar concept, the company added patio seating and streamlined the menu, which is now focused on alcoholic beverages only to serve the current leisure traveler.

Below: Concessionaires weigh multiple factors and collaborate with other stakeholders when determining which food and beverage concepts to reopen as travel ramps up. (Delaware North’s Cross Grain Brewhouse pictured.)

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But even if enplanement levels are where they need to be, some restaurants simply take more time to plan and prepare for a reopening, notes SSP America’s Rotteveel.

“A quick serve national brand in a small space would take less time compared to a full-service local brand restaurant in a large space,” he explains. “A larger space requires more employees who all have to be credentialed and trained. This is a timeconsuming process for any restaurant, but in airports in particular.”

Paradies Lagardère has a very specific process for determining which restaurants can be sustainably and responsibly reopened. “We use a certain matrix to analyze key data, including enplanements levels, financial evaluations, menu and staffing optimization, airport partner input, implementation of updated safety and sanitation protocols and other relevant information,” Baake says. “Our team ensures that each of these data points reflects a ‘green light’ before we proceed. To date, we feel this process has been extremely effective for long-term success and it’s certainly appreciated by our airport partners.”

Delaware North’s Lewis notes that input and levels of involvement from airport

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partners vary from airport to airport, but that it’s always a partnership. “We’re actively listening to our clients and our guests to adjust hours, product offerings and service styles to best serve guests market by market,” she says. “This is a collaborative process that is reviewed on a weekly basis and we’ve remained flexible in our approach to meet the needs of all our stakeholders.”

Schneider of Areas USA also notes that the reopening effort has been collaborative. With airports, the company is looking to make sure all day parts of taken care of and that the airlines with the highest enplanements have the right amount of concessions open near the appropriate gates. And with brands, Areas is looking at how to adjust menus or service models to serve the current traveling customer.

“It’s definitely a different type of traveler right now than we may have been used to,” Schneider points out. “These travelers are much more skewed toward leisure, so we’re really looking at the types of concepts that make sense for that. For instance, beverage and bar has been something that we’ve taken a hard look at because we see those numbers ticking up quite a bit.”

Above: HMSHost’s portfolio skews heavily branded, so the company has been focused on reopening national names like Chick-fil-A, Shake Shack and Panera Bread. But early on in the pandemic when dining restrictions were stricter, the company leaned on its proprietary kiosk and marketstyle brands.

Rotteveel says that ultimately, the primary focus has been opening what’s right for the passenger experience and that also meets the needs of airport partners.

“A lot of factors determine if restaurant reopening is viable, including passenger numbers for a specific concourse or terminal, restaurant location, flexibility in menu offering, service model, possible changes in day-part usage or passenger demographics, competitive landscape, flexibility and support of our airport and brand partners, and the local labor market,” he says. “At SSP, we’re doing all we can to make the right decisions so we can eventually emerge from this pandemic an even stronger company.”

AXiNsider is an interview-style podcast featuring in-depth discussions with professionals, leaders and wave-makers in the airport and concessions industries.

TO LISTEN TO THE AXINSIDER PODCASTS, VISIT AIRPORTXNEWS.COM/AXINSIDER

KEYNOTE SPOTLIGHT:

ERICA ORANGE Adaptation and Innovation Key To Meeting New Challenges

Editor’s Note: Erica Orange is executive vice president and chief operating officer of The Future Hunters, a future-focused consultancy offering insights into market and consumer trends. She is also the keynote speaker for the 2021 Airport Experience Conference, sharing her thoughts on the evolution of the modern consumer. As a prelude to her presentation at the upcoming conference, she joined AXN’s Shafer Ross for a discussion about what travelers are expecting as they return to the airport and travel.

Above: Erica Orange, executive vice president and chief operating officer, The Future Hunters

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ROSS: How have consumers, and by extension travelers, changed due to the pandemic? Are there any new trends, desires, demands, expectations to note?

ORANGE: Very simply, I think that one of the things we have to start getting our heads around is that trend and counter-trend are not opposing forces, they are complementary forces. On one end of the spectrum, a lot of the consumerbased trends now are in the e-commerce space – that’s not news to anyone, it’s accelerated during the pandemic. That’s something that has staying power, and we know that people have expectations around speed based on being home for so long. They looked to these tech-based solutions to deliver things very quickly to them, at home, when they needed them.

At the same time – and that’s why I mentioned trend-counter trend – there’s a new demand, respect and resurgence of the offline. This is something I was tracking even prior to COVID, so COVID was just the accelerator. And that’s really the bow to wrap around all these questions: what we’ve seen is this COVID-accelerator effect. It is hitting the gas on trends – it didn’t create new trends, it just sped up existing ones.

We’ve seen for a while an increased desire – particularly in younger people – for the slow, the tactile, things that are more rooted in the sensory, so experiencebased travel, experience-based retail. So you see this bifurcation between very high-tech solutions and very low-tech, offline, simplistic solutions. And that’s going to stay with us.

ROSS: How have shopping practices/habits that were trending pre-pandemic been affected by the pandemic? What do we know about the experience consumers are expecting from brick-and-mortar businesses?

ORANGE: One of the trends, again pre-COVID, is the rise of experiential retail.

People want to go in and have something that is truly unique, whether it’s a brand experience, whether it’s using technology in-store – the fact that Google now has its first brick and mortar store is very telling and very indicative of

this trend. People want to go in for a reason… it’s a way to foster that emotional connection and people are looking to foster those connections in new ways.

At the same time, they’re going to expect and want fewer human-to-human touchpoints. It’s what retail has been moving toward for years. It’s just interesting to me that it used to be viewed as scary and now it’s viewed as a necessity.

When I was hearing and speaking a lot about what Walmart was doing with in-store robots, people thought that was scary because humans aren’t going to be doing those jobs. Throw a pandemic in there and people don’t want human cashiers, they would much rather have automated and robotic systems do this for them. So, they’re looking at not only health and safety measures in new ways, but ease and convenience. We’re now relying on these robotic proxies to do these tasks for us that, frankly, we don’t want to do.

People are going to be more comfortable going into retail environments with these robotic proxies, because they’re just going to feel safer and more comfortable.

ROSS: What is causing retailers to hesitate when it comes to implementing these new technologies and new best practices? What hurdles exist in moving into the future with the trends?

ORANGE: A lot of it is just ease of use.

It requires a lot of training and more complex understandings of how to use the technologies, so implementation is a major hurdle, because cost no longer really is one anymore. The costs have dropped so precipitously that there’s a very low barrier to entry.

Now a lot of it is just getting our heads around how to use it, how to use it effectively and efficiently, and how to get it to make sense, because a lot of companies will make that investment and realize that they have no idea what to do about it. And then they don’t want to invest money in training even their frontline retail staff in the use of those technologies. So they have

to have the strategy in place first, and if they don’t have the strategy it’s just going to be a cost vacuum.

Those that can actually think through second- and third-order consequences of this will be in a position for greater success versus those that just use the technology for technology’s sake, without thinking about the ripple-effects that it could have. You really need to reengineer your systems and how you do what you do.

ROSS: Who will drive the direction of brands and their priorities, the brands themselves or consumer demand? Is this a change from how this relationship has worked in the past?

ORANGE: It is very consumer-driven. I talk a lot about generational change, and even when it comes to household spending, it used to be very top-down and now it’s bottom-up. Now that we have a generation of very digitally savvy consumers, these Gen Z-ers – we call them Cybrids, cyber hybrids – they’re so well-versed that they are actually dictating the spending habits of their parents and, in some cases, their grandparents. This is influencing not only household spending, but it is having an exorbitant influence on brand positioning. The three luxuries today are time, trust and truth. These are the things that are becoming not just nice-tohaves but need-to-haves.

Consumers today have the ability to be fickle; there’s no more brand loyalty. Even with pricing and price-competitiveness, you can go on your phone and look up someone who’s selling it for a lower price.

So many people, particularly young people, are demanding transparency, authenticity, truthful messaging; the brands and retailers that don’t get it right are not winning eyeballs and dollars.

There’s a new set of standards to abide by because they’re totally in the consumer’s control. The nodes of power have completely shifted.

ROSS: How important is brand perception?

ORANGE: It is exceptionally [important].

Probably higher now more than ever.

One of the things that COVID has spotlighted were issues around diversity, equity, inclusion and justice. That is a new component here. Those things need to be fully embedded into both the mission and the vision of a company today. They need to walk the walk and talk the talk, because consumers are savvy and they see right through anyone doing this just for publicity.

The perception of those sorts of things have never been higher. You marry those with perceptions of trust and truthfulness, and those things are skyrocketing.

ROSS: Pre-pandemic, Baby Boomers were the dominant traveling group and they were primarily traveling for business purposes.

We know business travel is at a serious low right now and it’s not expected to come back for a while, leaving Millennials and Gen Z as the dominant traveling groups, traveling primarily for leisure. Should brands be acting on this generational shift?

What are some of the most significant ways brands can restructure their practices/ experiences to appeal to a new generation of traveler/consumer?

ORANGE: A few things are more important to [younger travelers] than to preceding generations. The emotional component of travel is something that is really important to them, so for anybody looking to attract a younger traveler, creating that emotional brand connection [is key]. Also [the younger] generations really want to feel the culture of a place. They value local food and tastes and textures and all those things. That’s another trend-counter-trend, - they want to immerse themselves in these environments, but they also want those Instagram-worthy experiences, because that matters to them.

Then there is the overarching trend, which is, of course, personalization and customization. They want those bespoke experiences that will be tailored to them, because if they’re going to be spending their money to go somewhere, they want something that feels unique.

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ACDBE Operators Weathered COVID While Prepping For Better Times

BY ANDREW TELLIJOHN

Below: Half Moon Empanadas actually grew during the pandemic, adding the right to open a kiosk at DEN and licensed locations at BNA and FLL, along with garnering space for frozen goods in a Concessions International location at SEA.

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Pilar Guzman Zavala had 13 Half Moon Empanadas locations across airports, universities and convention centers when the effects of COVID-19 hit in early 2020.

Almost overnight, business stopped.

“Everything closed,” says the CEO and business development officer for the fast casual concept that has focused on developing eateries in non-traditional markets. “By the day there were decreasing sales.”

So, she got creative. She looked to the community for help. The community came through.

“I started trying to sell empanadas to anybody I could,” she says.

Guzman Zavala kept employees busy making food for police officers and hospitals. She invested in a website with Shopify so people could order empanadas online and then pick them up through a small window in Half Moon’s off-site commissary kitchen.

“We became digital, when we never had done any digital,” she says. “That was a big learning [experience] for our company. We were non-traditional locations. When we focused on selling digitally, we started to pick up sales.”

She answered a Miami-Dade County “Meals for Seniors” ad, spent two months going through a certification process and then became a restaurant delivering food door-to-door for the senior population.

Great employees who showed tremendous teamwork and flexibility were key. Everyone took on different roles.

“Everybody that was in the stores became people preparing meals to go door-do-door,” she says. “Some of them became drivers, some of them began packaging, some of them were working in the kitchen. We were able to survive because we had that contract,” she says.

Adding New Locations While finding new ways to disperse her empanadas on the street side kept Half Moon Empanadas alive, persistence shown over several years started paying off for Zavala in airport settings, as well.

“We’ve been hustling for four years to get into other places,” she says. “Finally, we understood the model.”

During COVID-19, Zavala won the right to open a 400-square-foot kiosk in Denver International Airport’s (DEN) United Terminal, sold a license to a regional operator to operate a location at Nashville International Airport (BNA) that will open in 2023, and just started selling frozen empanadas in a Concessions International kiosk at Seattle-Tacoma International Airport (SEA). And she has agreed to sell a license to HMSHost Corp. to open a location at Fort LauderdaleHollywood International Airport (FLL).

“We’ve been hustling for a long time as an ACDBE,” she says. “COVID gave us a pause to focus on the foundation of that journey.”

She’s not alone. Sarah Imberman, owner of S. Levy Foods, also found time during a down year to open a second Sarah’s Candies store in partnership with Hudson at Midway International Airport (MDW), where traffic has been steadily increasing.

Above: It’s been a tough year for Pam Briere, owner of GPMM Group and operator of Kracky McGee’s at OMA (pictured), but with financial discipline and some PPP and EIDL assistance, she thinks she’s survived the worst of COVID.

“Hudson had done a lot of the buildout already,” she says. “Midway is one of the airports that has been good.”

Communication Key Imberman survived through 2020 by staying in close contact with prime, financial and airport industry partners.

Most of her locations are part of joint ventures. Imberman expressed appreciation to her prime partners for their role in helping cover the financial burden of the previous year and says she took the time during a call with the Federal Aviation Administration and other ACDBEs to talk up the virtues of that model as part of the reason she was able to survive.

“We didn’t have to foot the bill to cover our pro rata share of losses,” she says. “At some point ... there will be a truing up. … but it will come out of future profitability.

It would have wiped a lot of us out entirely.”

Imberman still had to draw down her line of credit to cover expenses. She would not identify her financial partner, other than saying it’s a private equity player who has been great to work with. “It was a lucky thing to have a great partner like that, as well,” she says.

Some of her locations at seven U.S. airports are still closed, while others have started opening.

Imberman says there are signs of hope, especially in places like MDW. She did have to cut labor costs by furloughing most hourly employees, so she also credited many salaried workers who stayed on at a pay cut to keep those locations that were open running well. “I was really impressed with how they stepped up and did every job,” she says.

Surviving With Assistance Pam Briere, who operates Kracky McGee’s and Simply Scrumptious Bakery at Eppley Airfield (OMA) in Omaha, Neb., also added another location just as COVID-19 hit the industry, a street side pub in Parker, Colo. called the West Main Taproom & Grill.

After launching that project, she flew back to Omaha to focus on her airport locations. When she got there at the beginning of a week, she was doing $3,200 in sales. By the end, sales had dropped to $300, as daily flight counts dropped from 44 to seven.

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“That’s how quickly it stopped,” says Briere, an accountant by trade. “It was pretty bad.”

She furloughed most of her staff, keeping only those on salary, and kept the restaurant open by mostly feeding airline crews.

Realizing she wasn’t generating enough sales to continue making payments on a loan incurred for a 2019 renovation of Kracky McGee’s, she began calling vendors seeking payment plans.

“I was burning cash,” she says. “Fixed expenses weren’t changing but the revenue wasn’t coming in.”

She sought and received assistance twice through the Paycheck Protection Program and additionally from the Economic Injury Disaster Loan assistance. Given the stimulus funds granted to airports, she had hoped for more assistance from the airport authority, which for a few months allowed her to pay percentage rent before recently reverting to a minimum annual guaranteed payment based on 2014 numbers. And she had to sign over concessions grant relief obtained from the U.S. Small Business Association to the authority.

But the assistance allowed her to pay off vendors. Traffic is increasing, though only slightly above the levels OMA saw in 2015. But Briere thinks she’s made it through the worst.

“I made it to the other side,” she says. “I feel the only way I made it is I have that accounting background and the financial background to make it.”

Labor Challenges Now, as the worst of COVID-19 seems to have passed, there are new challenges ahead.

Briere says she’s been operating Kracky McGee’s during the College World Series baseball tournament, one of the largest events each year in Omaha. Normally she’d have around nine employees on

Above: Just before COVID hit, Pam Briere, operator of two locations at OMA, opened a streetside restaurant in Parker, Colo.

Left, Below: Sarah Imberman, owner of S. Levy Foods, opened a second location at MDW in partnership with Hudson as the pandemic began lifting and traffic picked up.

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at any time during the tournament, but now she’s lucky to have two.

She’s had employees not show up for shifts on one day and show up the next without an explanation because they know she can’t afford to let them go.

“Now we’re dealing with labor shortages,” she says. “I have worked every day for the last two weeks. I cook, I cashier, I bartend, I wipe tables, I do everything I need to do.”

Imberman agrees. She has started handing out signing bonuses, referral bonuses, retention bonuses – anything it takes to find people to help keep stores and restaurants open.

“Some of our salaried employees really stepped up so we could stay open when and where we could,” she says.

Looking To The Future Whatever challenges the last 15 months brought, nobody is complaining too much. Imberman says she has an increased respect for good times.

“I think it makes you more appreciative of when business comes back and of every single customer,” Imberman says. “There was this perception pre-COVID that these customers aren’t going anywhere.

People are going to travel and they are going to want water and food. … Now, we have a whole new appreciation for when passengers return.”

Kurt Schwager, vice president of bu si ne s s a nd op er ation s at Jacobsen|Daniels, also sees the light at the end of the tunnel. His rising hopes follow a difficult 2020 during which the company adopted the mantra “Survive in 2020, stabilize in 2021 and set the tables to succeed in 2022 and beyond.”

Part of that meant proactively going out to partners in lounges, rental car valet parking operations and other aspects of the business and seeing what needed to close, what needed to stay open and what needed to be done to operate safely.

The company also spoke regularly and candidly internally about how they were doing, not just as a business but as people. Jacobsen|Daniels upped the frequency of its town hall meetings, held some joint online events and tried to maintain camaraderie while working apart.

“It was sad at times, but we went through it all together. We stayed connected,” Schwager says. “We took the attitude of no surprises, good news or bad news, we’re going to share it quickly.”

Now, as the world emerges from the pandemic, he says business is coming back faster than anticipated. A couple of projects the firm had won that were postponed have come back inline.

Interest in lounge space is growing.

“We’re just reacting to what our clients want to do,” he says. “Their research and their customers are telling them this is what they want.”

One final important component of getting through 2020 and preparing to move forward and grow in the coming years was the decision to slow down and take stock of what was working and what wasn’t.

“It was a real rare opportunity to take a pause,” he says. “We had rapid growth the last five years. It’s not all good - you step on some land mines when you have that. To have the chance to hit pause, sort of clear your desk and go back and reflect on what did we do well, what did we learn, knowing that when we come out of this, we’re going to have the chance to go through that rapid growth again with all the knowledge we gained over the last five years. We really needed that.”

Above: The Jacobsen|Daniels team spent much of 2020 debriefing on past successes, looking at what worked and what could improve.

Company officials say that reflection has set the course for better years ahead.

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ONE-ON-ONE

BRAND OPPORTUNITIES New Strategies Emerge For Pushing The Specialty Retail Boundaries

BY CAROL WARD

ditor’s Note: The summer months have finally brought some vibrancy back to the airport concessions business. But one challenge – present prior to the pandemic but exacerbated by it – is how to position specialty retail within the airport terminal. People have become accustomed to shopping online, thus making the airport offering less compelling to many travelers.

Marco Passoni is a senior executive vice president with London-based TW.O & Partners, a firm dedicated to positioning luxury and premium brands in the travel retail environment. Passoni connected with AXN’s Carol Ward for a discussion on what needs to change to ensure longevity for specialty retail in airports.

E

Above: Marco Passoni is a senior executive vice president with London-based TW.O & Partners

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WARD: Travel retail has been hard-hit throughout the world due to the pandemic.

Can you share what you’re seeing as markets begin opening up again?

PASSONI: There is a real hunger for travel and for shopping; people have saved up money and they want to spend on travel and travel retail. But two things have shifted: what they shop for and how they shop for it. We are seeing more interest in luxury products as people seek to treat themselves. We are also seeing a desire – no, a demand – for experience and digital engagement. We are truly in an omnichannel world now. Shoppers must be inspired online and sold on the brand’s story and experience. But that must then be carried on into the store. The physical experience is still going to be vital.

WARD: How are travelers spending patterns shifting?

PASSONI: There is a demand for luxury – buying less but buying better – but there is almost a bigger demand for something special and unique. Shoppers want to spend on something truly special.

They can get ordinary goods at home or online, but travel retail must offer unique collaborations and exclusive products.

Travelers want to buy something with a story. That is what will capture the imagination.

WARD: Which travel retail categories are best positioned for revitalization as the pandemic (hopefully) eases?

PASSONI: We have seen luxury fashion and accessories come back in a big way, the same goes for high-end spirits too. The real winners will be those brands and sectors which can bring stories to life for shoppers.

WARD: You’ve written about the need to create a travel retail experience, since brands connect with consumers online to a great extent these days. What does that travel experience look like?

PASSONI: It looks like something the shoppers cannot just [access] at home.

It must be something they cannot find online or even in the domestic market.

The experience must begin the moment they buy their ticket, with brand engagement which excites and inspires.

But the real magic must happen in the airport. There is no one-size-fits-all answer here, the experience must be the brand’s digital storytelling brought to life.

It must be seamlessly moved from online, it must be accessible in a tactile and hand-

ONE-ON-ONE

free manner, and it must offer something which is not found anywhere else.

More and more now, we are seeing shoppers buying into the brand experience and the product is almost a memento of that experience – a piece they can take with them.

WARD: If traditional travel retail operators move toward an experiential model, with fewer in-store transactions, how do the financial arrangements among brands, store operators and airports shift?

PASSONI: Done correctly, there does not need to be a drop in transactions. But the whole model needs to shift. It is time to modernize. We cannot have brands constrained by simple stores and units anymore. We need to be able to take the experience out to the shopper, to engage and sell to them, and then there will be collection points to pick up the sales which have been made both in stores and online. We have been talking about this for far, far too long and it is time to finally see some change.

WARD: Are there airports/operators who are doing the retail experience approach well? Can you provide specific examples?

PASSONI: At the moment, most airports are struggling with the lack of traffic, of course. [Singapore] Changi and its online offer are excellent examples of using

What is refreshing to see is that international hubs around the world are working hard to set up a seamless omnichannel experience for shoppers. But they must do it well – and fast.

digital correctly, as is London Heathrow, which does excellent work through its Heathrow Boutique. What is refreshing to see is that international hubs around the world are working hard to set up a seamless omnichannel experience for shoppers. But they must do it well – and fast.

WARD: Airports in the U.S. typically have a different retail offering than their overseas counterparts. Here, artisan products, local products and “sense of place” items are big sellers in travel retail, while luxury products aren’t as prevalent in most airports. Does that alter the approach operators should take in a postpandemic environment?

PASSONI: I do not believe so, as the key ideas remain the same. Shoppers need to be inspired by unique offers. Travel retail has the opportunity to showcase collaborations and partnerships which we do not see anywhere else; that must be the aim.

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BEFORE YOU TAKE OFF

TERMINAL SKATES

Skateboarders From Across The U.S. Temporarily Took Over An MSY Terminal

BY SHAFER ROSS

nyone who’s been at the airport either very early in the morning or very late at night knows there’s a particular atmosphere to an empty terminal. Normally bustling, loud and busy with people, a half-lit and empty airport corridor can hold a lot of potential.

One group of people to which an empty terminal is “a dream,” is skateboarders, according to Josh Greene, president and senior project manager for Throwing Star Collective. Throwing Star was hired by energy drink maker Red Bull to put up the Red Bull Terminal Takeover, a two-day skateboarding event that took place in early May at Louis Armstrong New Orleans International Airport’s (MSY) dormant baggage claim and concourse D. “To get to invite 45 skateboarders to take over a terminal and make it their own [was great],” says Greene. “[The skateboarders] really got to have their own interpretation of… the airport, how they looked at the features we built, how they looked at things that were already existing there. It gave perspective to the creativity of skateboarding [and] the airport gave us such open access.”

Though not a public event, the Takeover took about a year to plan. Just to coordinate the crews and event staff that would be onsite for filming required multiple site visits beginning in late 2020 and close collaboration with airport officials, Greene says.

“We did months of pre-planning and visits there,” he says. “The airport team was incredibly collaborative and supportive.

A

Top left: Five crews made up of skaters and filmmakers took over MSY to film their submissions for the online video contest.

Credit: Jonathan Mehring/Red Bull Content Pool

Top Right: New York Design And Construction was brought on to optimize the terminal and outfit the escalators, baggage claim carousels, countertops and more to be more conducive to pulling off impressive stunts.

Credit: Jonathan Mehring/Red Bull Content Pool

Bottom: Just to coordinate the crews and event staff that would be onsite for filming required multiple site visits beginning in late 2020.

Credit: Justen Williams/Red Bull Content Pool

Bringing this project to New Orleans and working with them, they gave us a lot of access and let us get really creative with the space.”

Five crews made up of skaters and filmmakers took over the dormant MSY terminal to film their submissions for the online video contest.The winner will be chosen by an online vote that was still open to the public at press time. The event brought in crews from across the U.S. South. The crew with the most highly voted two-minute video will receive $5,000 toward the enrichment of their local skate scene.

“I think you can skate baggage claim once in a real [operating] airport,” said Adrianne Sloboh, one of the competing skateboarders, in a promotional video for the contest. “That’s the last time you might be at that airport.”

While the crews’ tricks wouldn’t be appreciated during normal business operations, New York Design And Construction was brought on to optimize the terminal for the Takeover and outfit the escalators, baggage claim carousels, countertops and more to be more conducive to pulling off impressive stunts.

“The big thing with the terminal was the accessibility – it was not an abandoned terminal, just not operating right now,” says Throwing Star’s Greene. “It still had all the amenity needs for production with power, restrooms, access and parking – everything you would need to build that out.”

While it may seem like a case of the stars aligning perfectly, with the event team for the Takeover finding the out-of-commission airport terminal at seemingly just the right time, event organizer Greene believes this could possibly be an inspiration and successful precedent for similar events.

“I think this opens up opportunity,” Greene says. “Hopefully we have the chance to go back and build on what we started in New Orleans next year. I think when you do projects like this it opens up people’s minds a little bit to what is possible, how it can be done and be done safely.”

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