Airport Experience News - September/October 2021 by Airport Experience News

SEPTEMBER/OCTOBER 2021 / V19 N237

Infrastructure Backlog FUNDING THE NATION’S AVIATION NEEDS

AXC2021 Full Coverage! SESSIONS, CONNECTIONS AND MORE

P3 Model

MAKES INROADS

MSP’s TERMINAL 1 RENOVATION

A New Era of Brand Excellence Paradies Lagardère and Starbucks unveiled the first location of their new partnership recently at the Myrtle Beach International Airport. This store offers the full Starbucks customer experience, including mobile ordering and pay options through the brand’s app. We look forward to discussing opportunities for this iconic brand with our airport partners soon.

paradieslagardere.com

12 Cash Woes

Airports continue to run into the same issue, pandemic or no: funding. Even with Covid negatively impacting passenger numbers, airports say their infrastructure needs continue to expand. Once again, the key goal is an increase in the cap on Passenger Facilities Charges.

16 The Pandemic & P3s

P3s are still relatively uncommon in U.S. airports, but the pandemic hasn’t dampened interest from private partners. The question is, are airports willing to bite?

22 AXC 2021 In Photos

The 2021 Airport Experience Conference in Dallas was an exciting event full of dynamic people, sessions and connections. Take a look at some of what went on during those four days.

26 The 2021 Airport Experience Conference In case you missed it, we compiled all the most important points from the conference’s dynamic lineup of sessions. Check out our special section of conference coverage!

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

CXE and Airport Experience News collaborated on a survey to tap the industry for insight on both employee and customer experience efforts.

5 Latest Buzz

Minneapolis-Saint Paul International Airport is nearing completion of an overhaul that added much-needed space to baggage claim and ticketing, as well as expanded one concourse with new concessions and passenger amenities.

8 Director’s Chair

Scott Brockman, president and CEO of the MemphisShelby County Airport Authority, is grateful for returning leisure passengers but is looking forward to the sustained return of business travel as a sign of true recovery.

44 Advertising Index 45 Before You Take Off

When officials at San Francisco International Airport realized their free vaccine program was more popular with travelers than with employees, they noted another interesting trend: many vaccine patients were coming from abroad.

A X N E W S S E P T E M BE R / O C T O BE R 2 0 2 1

TEAM Desiree Hanson

Executive Vice President

Melissa Montes Publisher

Carol Ward

Editor-in-Chief

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Contributing Writer

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Group Marketing Director

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Senior Marketing Manager

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Marketing Coordinator

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President and Chief Executive Officer

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9 10/2021

Dear Readers, SEPTEMBER/OCTOBER 2021 / V19 N237

Infrastructure Backlog FUNDING THE NATION’S AVIATION NEEDS

AXC2021 Full Coverage! SESSIONS, CONNECTIONS AND MORE

P3 Model

MAKES INROADS

MSP’s TERMINAL 1 RENOVATION

We are a few weeks removed from the 2021 Airport Experience Conference, which took place in mid-August in Dallas. It was gratifying for the AXN team to reconnect the industry and to facilitate the conversations needed to move our industry forward. We appreciate all the support and enthusiasm we received from our airport and concessions partners, and we hope to carry it forward into the next year and beyond. This issue of Airport Experience News includes an in-depth look at the 2021 AX Conference, including full coverage of multiple sessions examining the way forward for airport-concessionaire relationships. This issue also explores new developments in our industry, including the latest approaches to infrastructure redevelopment and the funding necessary to make those upgrades and expansions. This autumn, we’ll be identifying and interviewing our Directors of the Year for 2021, with feature articles on each slated for the November/ December issue. At the same time, we’re gearing up for the 2022 AX Conference, which will revert to our usual spring timing. We’re eager to hear your thoughts about content planning for both the magazine and other media and for the conference. Please share your thoughts with me at carol@airportxnews.com.

Best regards,

Carol Ward Editor-in-Chief Airport Experience News

A X N E W S S E P T E M BE R / O C T O BE R 2 0 2 1

DATA CHECK

articipants rted g touchless nology as a t of the emic.

ENHANCING EMPLOYEE EXPERIENCES Airports Innovate With Engagement And Recognition Initiatives, Survey Shows BY CAROL WARD

W! SURVEY

Within the next year, what type of employee Recognition and Appreciation would you like to implement? (Select all that apply.) 25.8%

Employee-to-Employee Only Employee & Passenger-to-Employee

30.6% (+22.5% increase)

nications and Non-Monetary

19.4%

elect all that apply.) cing Incentive-Based

62.9% (+16.1%increase)

Celebration/Awards Events

10%

20%

30%

Almost

9090% 80% Almost of participants

% identified

one-on-one

of participants of respondents cited of respondents identified that theconversations talent shortages withone-on-one cited are that theimpacting talent conversations with negatively employees as theiras their employees airport operations as a shortages are most-used method of result ofmost-used the COVID-19 method negatively communication. pandemic. of communication. impacting airport operations as a result of the of participants indicated that COVID-19 they actively recruit talent via pandemic. their social media channels.

74%

% 100%

to attract talent? 4

Recruiting Methods

50% 0%

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40%

50%

60%

70%

80%

90%

100%

irports are gaining ground on improving customer and employee experiences despite the pandemicrelated uncertainty that continues to envelop the industry, a new survey from CXE shows. CXE’s Airport Now! Survey, conducted in partnership with Airport Experience News, reveals a new emphasis on the importance of employee recognition and appreciation; the value of integrating diversity, inclusion and equity training; creativity in overcoming hiring obstacles and more. Fully 90 percent of survey respondents say talent shortages remain their top workforce challenge as a result of the pandemic. Employee retention (43.3 percent) and budget constraints (38.3 percent) also emerged as key challenges for survey respondents. The dire labor situation within the industry is prompting respondents to shift how they recognize and reward employees now and in the future. Close to 57 percent of respondents indicated that their current recognition and appreciation programs are only employeeto-employee nominations. Other popular methods include celebration/awards events (46.4 percent) and incentive-based rewards (35.5 percent). But that’s likely to shift in the coming years. Respondents said they will

increasingly rely on incentive-based methods of appreciation over the next year, with 62.9 percent saying they would like to implement such programs. Employee and passengerto-employee recognition will also get a big boost, with 30.6 percent of respondents saying they would like to implement that approach in the coming year.

Of course, the bigger problem in the current uncertain environment is attracting new talent into the airport. Recruitment is overwhelmingly done through social media channels, with 74 percent of respondents using that avenue. Half of survey respondents said their organization uses job fairs, 45.2 percent offer incentives and nearly 40 percent used paid advertising. Survey respondents said monetary rewards – hiring bonuses (47.2 percent), increased hourly wages (45.3 percent) and referral bonuses (39.6 percent) – are among the more popular methods for recruiting new employees. But not all incentives are monetary. Respondents said growth and advancement opportunities (43.4 percent) are effective in their recruiting strategies, as are professional development opportunities (32.1 percent), the survey shows. Noting that 67 percent of job seekers consider workplace diversity an important factor when considering employment opportunities, the CXE survey asked respondents how their organization 21% approaches training. Just over 43 percent of respondents said their organization has offered training and specific company goals, while another 32.8 percent said their employer is just beginning to focus on DE&I education and training. Nearly one-fifth of respondents said their organization has not offered training in this area. Full results of the Airport Now! Survey can be found here.

LATEST BUZZ

ESCAPING THE SQUEEZE

MSP Adds Space With Expanded T1 Ticketing And Baggage Claim, New G Concourse BY DAVID WARD

Above: Among the highlights of the MSP Terminal 1 renovation is The Aurora, an art installation featuring thousands of LED lights – embedded in the shapes of five Minnesota lakes – that change depending on the weather

i ke ma ny U.S. air por t s, Minneapolis-St Paul International Airport (MSP) is finding that its expansion projects to accommodate future passenger growth are also proving valuable in helping provide the additional space needed for social distancing during the current COVID pandemic. MSP is nearing completion of several construction efforts, the most prominent being the long-term remodeling of Terminal 1’s ticketing and baggage claim areas, which also includes steps to improve the airport’s vertical circulation elements. The project began in late 2016 and is expected to be completed in 2024, with a price tag of $540 million.

Brian Ryks, executive director and CEO of the Metropolitan Airports Commission (MAC), operator of MSP, says the project was originally designed to accommodate an expected increase in annual traffic from slightly fewer than 40 million in 2019 to eventually 55 million by the middle of the next decade. “The biggest part of the project is adding 50 feet to the front of the entire Terminal 1 facility, both in baggage claim and in the upper-level ticketing,” Ryks says. “We’ve modified the entrance areas and we’ve created a sense of place throughout the facility and a consistent experience from curb to gate.” The additional space at the front of Terminal 1 has enabled the airport to accommodate social distancing in the airline queuing areas and at the TSA checkpoint. “It’s also allowed us to build out an east curb drop off area where Delta [Air Lines] has a ticketing and baggage drop off area and that has eased some of the road congestion around the airport that will serve us well long term,” Ryks adds. MSP also added dynamic digital signage to improve passenger flow. “We built in realtime, updated wait time signage for both our north and south security checkpoints,” Ryks says. “We’re also going to expand those checkpoints,” he notes about the ongoing project. “Our north security checkpoint expanded to 10 lanes and our south security checkpoint will be expanded to nine lanes.” On the Terminal 1 baggage/arrivals level, the project increased the height of the ceiling and added more windows to bring natural light throughout the facility. “We’ve added much larger baggage carousels, which has helped with social distancing, and the vertical circulation elements have been

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LATEST BUZZ

changed – large elevator banks with smart elevators that allow a better passenger experience,” he says. The project also includes technology to enable MSP officials to monitor queue lines throughout the entire terminal complex and features new terrazzo flooring throughout the terminal. “The improvements that we’ve made have really allowed us to create a consistent experience and allowed [passengers] to get a great feel for the Minnesota and Twin Cities regions, both coming and going,” Ryks says. To enhance the passenger experience, MSP also built the largest public art/

sculpture installation in Minnesota, featuring an interactive display called The Aurora that has thousands of LED lights and five of the state’s lakes embedded into the floor. “The Aurora is adaptive to changing weather conditions so as the weather changes, different lights are lit up,” Ryks says. “The other thing that we’ve incorporated with this project is new restrooms. These are much larger facilities that have art incorporated into them that have emerged as a highlight of not only this project, but of what we’ve been doing throughout the terminal to benefit passengers.”

Concourse Overhaul Another project underway is the buildout of MSP’s G Concourse to address passenger congestion during busy periods. “We’re not adding new gates but adding space down there,” Ryks says. “The restrooms didn’t have the capacity to accommodate demand and with this concourse our airlines, specifically Delta Air Lines, have many large gauge aircraft that use that facility for domestic but also international routes.” The G Concourse expansion allows gate areas to be connected, enabling better traffic flow. “We’re building them out and we’re connecting them and adding much more square footage,” Ryks says. “We’re also updating restrooms and building a large 40-foot-high rotunda and the end of the concourse that’s really going to allow more square footage for food and beverage and retail concessions.” OTG holds the food and beverage contract for the G Concourse. Plans thus far call for a Starbucks, Cibo Market, the sit-down restaurant Mill City, Crisp & Green, and the dual concept Poppy’s Bagel/ Custom Burger. All those locations will be opening in February when the airport’s portion of the G Concourse is completed. One impetus for the G Concourse project off was Delta’s desire to build a third SkyClub Lounge at the airport. “We are building the shell out and then Delta will come in and finish the space,” Ryks says. “We’ll be finished with our portion of it in Feb 2022 and then Delta will open the SkyClub about a year later.” MSP’s portion of the project cost $82.5 million and is expected to be completed early next year. Left Top: MSP airport officials focused on improving the vertical elements of Terminal 1 by incorporating new escalators and elevators so passengers can easily move from one level to another. Left: The renovated baggage claim area features more windows to bring in natural light and wider baggage carousels to facilitate social distancing among arriving passengers.

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LATEST BUZZ

Above: When completed in early 2022, the new G Concourse at MSP will have a rotunda and new food and beverage and retail outlets from concessionaire OTG. Below: The build-out of MSP Terminal 1 includes 50 square feet in front of the facility that provides a welcoming entry point for passengers while also easing road congestion around the terminal.

Leisure Traffic Dominates MSP is currently operating at 70%-75%of 2019 levels. Ryks says the airport expects to be that to grow to close to 85% of 2019 levels next year, with a full recovery anticipated by 2024. One key for reaching pre-pandemic traffic levels will be the return of international and business travel. In the near term, Ryks says, the added space in both Terminal 1 and the G Concourse will enable the airport to better accommodate leisure travelers. “Business travelers are usually in and out, whereas your leisure

travelers take more time and they have more bags to check,” he says. “It’s about having additional space that streamlines that process.” Melvin Tennant, president and CEO of the convention, travel and tourism group Meet Minneapolis, says the airport remains a key component in helping to drive the local economy and create a great first impression for attendees of events such as the NCAA Women’s Volleyball Championship, USA Taekwondo National Championships, the NCAA 2020 Men’s Final Four and next year’s NCAA Women’s Final Four basketball tournament. “In our industry, having an awardwinning airport that is a hub for a major U.S. airline, offers direct access to major international cities and provides our visitors with easy light rail access to downtown Minneapolis is a major selling feature for our domestic and international clients,” Tennant says. “We work collaboratively, particularly with the director of air service development, to attract new airlines and flights. Our marketing teams have also started working more closely together over the past several years to engage consumer media and to welcome major convention and event attendees to our region.” As for the Terminal 1 and G Concourse expansions, Tennant says, “We are certain that the improvements being made will keep MSP top of mind with travelers as a best-in-class airport and airport experience. We know a considerable amount of thought and care has gone into the visitor experience of MSP, and it is a pleasure to promote this asset to our clients.”

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DIRECTOR’S CHAIR

MEM ON THE REBOUND Cargo Is Booming, Passengers Are Returning And A Concourse Modernization Is Nearing Completion BY CAROL WARD

ditor’s Note: Memphis International Airport {MEM} has been through some significant ups and downs over the past decade. Delta Air Lines dehubbed the airport in 2013, causing a massive drop in passenger numbers and forcing a shift in the longtime business model for the airport. Traffic was coming back in subsequent years, reaching 4.64 million in 2019, a 5.1 percent increase over the previous year but fewer than half the 10 million passengers recorded in 2010. At the same time, MEM is the largest cargo hub in North America and vies for that title globally, primarily due to its position as the global hub for FedEx. The pandemic sent passenger numbers tumbling but cargo numbers shot up with the global increase in e-commerce. In the midst of it all, MEM is finishing up a concourse modernization that realigns the facility as an origin-and-destination airport. AXN’s Carol Ward spoke with Scott Brockman, president and CEO of the Memphis-Shelby County Airport Authority, which oversees MEM, for an update on the airport.

Above: Scott Brockman, president and CEO of the Memphis-Shelby County Airport Authority.

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WARD: Let’s start with passenger numbers. How did the summer go for MEM, and what’s the outlook as we move into the fall? BROCKMAN: Like everyone, we really had a struggle in 2020 starting in March and April. Over the course of the pandemic so far, we have fared a little bit better than the national average on TSA checkpoint numbers. The real turning point occurred in March of 2021. Numbers started going up exponentially in March. They grew every month from March through July – in July, we actually were at almost 85 percent of 2019 numbers. We’ve seen a fairly strong recovery, although most of that recovery has occurred in a leisure base, not in a business base. I think most of us in airport management are still waiting to see more suit coats and briefcases than flip flops and shorts. In August with the return of school, we saw our normal drop, but we still fared fairly well in August. Our budget was set based on a projection of a 60 percent recovery. We’re surpassing our budget. As for projection, this Delta variant of COVID has caused concerns about whether or not we will

continue to see the really good numbers that we’ve seen. And only time will tell. WARD: What about your cargo business? BROCKMAN: It’s like the tale of two airports. In March of 2020, we had actually come out of the worst year of air cargo operations in history worldwide. We were not down as bad as some airports, but 2019 was actually a small retraction. When the pandemic hit, it was like turning a switch. Cargo started to recover – with the shipping and transportation of PPE, along with all of the e-commerce that was taking off. People were locked at home and cargo has grown ever since. We passed 10 billion metric tons of cargo. In 2020 we returned to the number-one cargo airport in the world. We work every day on helping our largest partner, FedEx, continue to grow and develop. Ironically, FedEx started to prepare and work with us on developing property for e-commerce several years ahead of the pandemic, recognizing that the global e-commerce world was going to do nothing but expand.

DIRECTOR’S CHAIR

WARD: Do you expect continued growth, or will there be a shakeout when the pandemic recedes? BROCKMAN: I think that e-commerce will remain strong. Will it remain as strong as it did when the entire economy was locked down? It’s probably not going to mirror that. One of the challenges that e-commerce is having as well as box stores is just the supply chain – getting products to the distribution point. It’s hard to predict what supply chain disruptions will do. WARD: Let’s turn to your infrastructure project s. You have a concou r se modernization that is coming to fruition, correct? BROCKMAN: We are suffering through a bit of a labor and supply chain challenges as we try to wrap this project up, but we’re hopeful that that we’ll be able to open this fall and actually serve passengers out of the B Concourse. When that occurs, all our airlines will move to the B Concourse and every passenger will get to experience the expansive space that the B Concourse will offer. It’s been a long time coming. We started this project in 2014. Most people don’t know this, but Memphis is very close to an earthquake zone. Our buildings are 60 to 70 years old and were all built prior to modern seismic building codes. We’ve been replacing all of our buildings and other assets systematically, or seismically upgrading them, for about the last 12 to 15 years. This concourse is really important from the standpoint of traveler safety. And it’s a beautiful facility. It’s going to be a totally new presentation with all new

jet bridges; everything’s modern, there’s moving walkways and it will be hopefully a very convenient and technologically advanced offering. WARD: Can we dig into that a little bit more? What sort of passenger amenities and what customer-facing technologies have you added that might appeal to the passengers coming through? BROCKMAN: We’ve got a lot of upgrades in WiFi technology and being able to offer more for the business traveler and really for the leisure traveler. There is a really heavy need for that. We have a lot of amenities for some of the disabled travelers. We’ve built the concourse with amenities for the hearing impaired with what’s called a hearing loop, which basically cuts out all the background clutter when announcements are being made and communicates directly to someone’s [hearing aid] in a much clearer way. Since Memphis is the home of St. Jude Children’s Research Hospital, we get a lot of patients from around the globe coming to be treated. As part of this concourse, we’ve put in a St. Jude Children’s Room, where kids that have come to town to be treated have a place escape while they’re in the terminal, before their flight. Obviously the moving walkways are [important] when you have very long corridors and very long gate areas because it’s challenging on some of those mobility impaired people. We’ve upgraded all of our technology for devices, the mobile apps and upgraded the mapping functions. That, I think, will help tremendously. It still seems to be a challenge to get people

Top Left: Memphis International has seen leisure traffic return but business travel is slow to trickle back. Top Right: The new B Concourse is expected to open later this year. The airport will shutter Concourses A and C and move all passenger traffic to the new facility. Below: HMSHost holds the food and beverage contract at MEM, while Paradies Lagardère operates retail concessions. Both concessionaires are building out new locations in Concourse A.

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DIRECTOR’S CHAIR

comfortable going into a restaurant and actually sitting down to eat. We build most of our restaurants more open air – they’re not really confined by walls. Even the gift shops are not constrained by walls. It’s meant to make things more open, more efficient, more effective and just easier for travelers. WARD: Was that planned pre-COVID or is that in response to the pandemic? BROCKMAN: It actually was planned pre-COVID, but once COVID began we made some tweaks with some of the vendors to enhance the openness of those facilities. WARD: Let’s turn to your concessions program. You will have all new concessions in the new concourse, correct? BROCKMAN: Not all concessions will be in the concourse. We have some in the ticketing lobby and some out in between the checkpoint and the concourse, but all of them will be in the centralized corridor through to the B Concourse. The A and C Concourses will be closed, which is where the airlines are operating today. The biggest challenge now as we’re ready to open is whether or not the concessionaires will have the workforce to allow them to truly open. It’s really much more difficult

Right: As the global hub for Fedex, MEM’s passenger footprint is overshadowed by its cargo operations. MEM is onwe of the largest cargo airports in the world.

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for a restaurant – it takes a lot of much bigger investment of staff in order to open. WARD: Who are your concessions operators? BROCKMAN: We have two primes: Paradies Lagardère is our gift shop operator and HMSHost is our food [operator]. We did not go out for public bid on this current contract, mainly because we had five operators pre-dehubbing and only two of the operators were willing to stay and ride the downward spiral of being dehubbed and work through all those challenges with us. Those are the two that are currently being rewarded with a contract. We worked through that with the FAA and they concurred on a longterm contract. We have a tiered approach for development because at the time that we started the build out we were at 40-45 percent [of 2019 traffic]. We have certain things that had to be done in Phase 1, then at 85 percent of passengers we move into Phase 2. There’s a Phase 3 when we get to 100 percent. It’s likely we’ll be in Phase 2 by the time we open and working our way to Phase 3. We thought it was an interesting approach to really work with our vendors to conserve some of the

capital dollar expenditure upfront when there wasn’t enough demand. WARD: What else notable is happening at MEM? BROCKMAN: I’m almost done with a master plan update, which really looks at the entire facility for the first time as an origin and destination airport. The last master plan we did we were still a hub. We’ll have some pretty high-ticket items in this post-pandemic or pandemic world. No airport was built to socially distance in any reasonable way. So, we’re looking at how do we do that in such a way that not only modernizes things but also creates the space that we’ll need. We’re looking forward to finishing the master plan around the end of this calendar year and starting to chart the path towards what the ultimate development of the site will be over the next twenty. Another piece is really not exciting, not sexy. It’s a centralized de-icing pad. When you combine that with the concourse modernization, those two projects alone are about a half a billion dollars. I think both are very important to the national aviation system and are certainly very important for Memphis.

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

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As Capital Needs Mount, Airports Again Turn To Infrastructure Funding Push BY CAROL WARD

A X N E W S S E P T E M BE R / O C T O BE R 2 0 2 1

Right: A renovation project that began in July 2021 at Los Angeles International’s Terminal 6 will upgrade gate areas and lounges. The renovation is expected to cost $230 million

Over the past 18 months, airports in the United States have looked to government to infuse money to help them survive. Now, with air travel ratcheting up again – albeit at an uneven pace throughout the country – the industry is pushing again for funding tools to allow them to address aging or constrained infrastructure, as well as other needs. Airports Council International North America (ACI-NA) says the need continues to grow even though the COVID19 pandemic put the brakes on what was a strong growth streak for the industry. This year, as the pandemic continues, passenger levels are still far from where they were in 2019 at most airports. “We did our needs study last year and we have $115 billion in well-documented infrastructure needs over the next five years, and that number continues to go up each time we do this study, which is every two years,” says Kevin Burke, president and CEO of ACI-NA. “When I started in April eight years ago, I think we needed $71b, so we’re talking a big jump in a relatively short period of time.”

Burke says the need is less about expanding to accommodate growing numbers of travelers than about replacing aging infrastructure. “The need is really based upon the age of the infrastructure itself and the fact that our average airport is around 40 years old,” he says. Burke notes there are new terminals throughout the system, but by and large “we have a lot of old terminals around the country…and across the board it’s more a patchwork of repairing older rather than building newer. “We’d like to build airports for the 21st century,” he adds. “Going forward that’s our battle plan. The need will be there, passenger traffic will be returning and frankly this benefits the airlines, because if you modernize the airports, you basically provide not only the needs of the passengers and the traveling public but the needs of the airlines that are using the airports.” Joel Bacon, executive vice president of government and public affairs for the American Association of Airport Executives (AAAE), says needs have actually been exacerbated by the pandemic

with “the need to create more spacing and the need to move toward touchless in the terminal and airport environment, the need to look at HVAC upgrades…” he says. “These are among a host of pandemicrelated expenses that airports are now dealing with and will have in front of them. “We’re upgrading facilities that were built in the ‘50s and ‘60s if not before, and they need to be updated to deal with the realities on the ground for airports today, post-9/11, post-pandemic,” Bacon adds.

First Up: The Infrastructure Bill Airport industry leaders’ near-term hopes hang on the $1 trillion infrastructure bill, which passed out of the Senate with bipartisan support in August. At press time, the bill was awaiting consideration by the House. The bill includes $20 billion for airports and another $5 billion for Federal Aviation Administration upgrades. “We can make a significant amount of progress with $20 billion toward the needs that airports have,” says Bacon. “Those needs far exceed $20 billion so we’re not going to be done after an infrastructure package, but it will help us make a lot of forward progress obviously.” While passage wasn’t guaranteed, at press time many were optimistic about chances. “If I had to bet, I’d bet it will pass,” says Steve Van Beek, a director at Steer.

Left: The new Terminal 1 at John F. Kennedy International is being constructed under a public-private partnership that will spend $7.4 billion in stages through 2025.

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Above, Right: Pittsburgh International Airport has begun a $1.39 billion Terminal Modernization Program that will right-size facilities and reduce longterm costs. The projects is slated for completion in 2025.

“One thing I do like about it is the recognition that terminal projects at larger airports are something that should be eligible and supported,” he continues. “In the past [Airport Improvement Program] discretionary money has not gone for terminal projects on anything but non-hub airports.” Van Beek notes that AIP money typically is constrained to a narrow band of projects, but there are talks about using the much broader project criteria used for Passenger Facility Charge funds on the allocation in the infrastructure bill. Marc Scribner, senior transportation policy analyst at the Reason Foundation, also is cautiously optimistic. “I think the odds right now [early September] seem pretty good, but things have been vacillating pretty wildly and the pandemic has certainly played a role in that,” he says. He’s also supportive of the broader project criteria. “The match looks like AIP, but the project eligibility is the PFC,” he says, noting that will allow airports to address critical terminal projects.

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Another PFC Push But while the infrastructure bill, if it passes, will provide a much-needed infusion of cash into the national aviation system, the airport industry is gearing up for yet another push to increase the cap on PFCs. The $4.50 cap has been in place for more than two decades, and the industry has been seeking an increase for almost that long. Scribner says the $20 billion given to airports during the pandemic and the $20 billion for airports in the infrastructure bill might prompt some lawmakers to rethink their stances. “I don’t think having airports on the federal dole in perpetuity is something anyone wants,” he says. “Going forward and getting airports self-sufficiently again, that is something critical that they’ll need to address.” Bacon says AAAE is gearing up for another lobbying push for the PFC cap increase.

“First things first, we want to get through this current infrastructure package and then turn the page and start thinking about the next step, which is the reauthorization bill,” notes Bacon. Current funding for airports expires on October 1, 2023, so airports have roughly two years to make their case. Burke says the next reauthorization bill is the most likely avenue to push through an increase, although hypothetically such as measure could be pushed through beforehand. A bill introduced earlier this year would have increased the PFC cap to $8.50 over multiple years, but the bill never made real progress through the legislative system. “In realistic terms, we’ve decided we could get a PFC in the next reauthorization bill, so in my view it’s never too early to be planning for this,” Burke says. “We’re going to build upon the success we’ve had in the past in getting nearly 100 groups around Washington that were activated and have an interest in seeing the PFC passed and could be activated again in working with airports around the country. It’s been 20 years since they increased the PFC and the dollar value of that is now around $2 to $2.50.” Van Beek agrees that the next reauthorization bill is the most likely vehicle for a PFC cap increase. “Those standalone bills have never succeeded, and I think a PFC increase is always more likely in a very big bill where both airlines and airports would be getting something,” he says. “If you just make it a standalone bill then the airlines can draw all the fire on it. If it’s a big bill where they have something they want too, that changes the calculus politically.” That said, Van Beek isn’t betting on passage. “I don’t see any movement on a PFC that would give me any more optimism than I had five years ago or 10 years ago,” he says. “Am I hopeful? Sure. But I don’t see anything that would change the political dynamic.”

Other Approaches? Bacon believes that PFCs remain the best option for tackling some of the long-term financing challenges most commercial airports face, and he says AAAE will fight to include a cap increase in the 2023 reauthorization bill. But he’s also cognizant of the current reality.

Above, Left: Orlando International’s new South Terminal C is expected to reach substantial completion in early 2022. When operational, the new terminal’s 15 gates will accommodate up to 20 aircraft and support an additional capacity of 10-12 million annual passengers.

“The model that we have has been pretty stagnant,” Bacon admits. “The AIP has been roughly the same. We’ve been successful in getting additional funding here and there, and this infrastructure package provides a significant infusion. But we have a stagnant AIP program that hasn’t been adjusted and the cap on PFCs hasn’t been adjusted for 20 years. The world in 2021 is a heck of lot different than the world of 2000 for airports yet our finances structures are the same.” Public-private partnerships offer a good alternative for some airports although inviting the private sector in to take on long-term airport leases has been spotty thus far (see related P3 article on page 16). Bacon admits that “the fact that we’re close to getting this infusion of federal dollars will probably color how airports look at some of these things,” he says, adding that “there will be different realities on the ground for different airports and whether or not that ends up being an attractive option for them.”

Bigger picture, Scribner suggests a new approach could be in the works. “PFCs could be very helpful in getting large commercial airports self-sufficient again, but there are other models that have proven successful in other parts of the world. Maybe the U.S. is finally going to catch up with a lot of our peer countries and move from this kind 1940s, 1950s style of airport governance and funding. “It remains to be seen and we’re still in bailout mode,” Scribner continues. “Maybe the infrastructure and reconciliation bills will mark the beginning of the end of that.” Van Beek also notes some appetite for change, and points to shifts in the industry that may warrant a new approach. “ J u s t r e m e m b e r, t h e FA A reauthorization isn’t until 2023, so as we come out of COVID, we’re going to have this two-year period where we’re going to have a brand-new industry compared to

what we had in March of 2020,” he says. “We’ll still have traffic, but the way that traffic spills across airports is going to be significantly different. “You have to ask yourself if a legacy FAA authorization that basically has had the same rules for the last 20 years is one that’s really going to apply to this new industry,” Van Beek continues. “I’m hoping that first we’re going to have first a giant white board industry discussion.” Exploring various options within the industry and including the trade groups like ACI-NA and AAAE, airports and other airports is the first action, he explains. Then, Van Beek suggests pulling in airlines and other stakeholders for discussion on a better way forward. “The approach would be, ‘hey guys let’s put our PFC biases to the side for the moment and let’s just try to figure this thing out’,” he says. “Because the model that we have now may not be suited going forward.”

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BY ANDREW TELLIJOHN

Above: It wasn’t opened without controversy, but Paine Field in Seattle, operated by Propeller Airports, has become an award-winning small airport.

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Tweed New Haven Airport (HVN), a small, city-owned airport in Southern Connecticut in search of a longer runway, a new terminal and regular commercial service, has received private financing in order to meet those goals. The project will be funded by Avports, a private company owned by Goldman Sachs that runs several airports, including HVN. Avports will, in turn, manage the airport for the next 40 years. Along with the plans, which include a 74,000-square-foot terminal with four gates and the 1,000-foot extension of its runway to allow for larger aircraft, come commitments from two airlines – legacy carrier American Airlines and startup Avelo Airlines – to begin service at HVN by 2023. “Obviously there was a level of trust and relationship already there because we’ve been working with them,” says Sean Scanlon, executive director at HVN. “It wasn’t just a random person who called me one day and said ‘hey, I have $100 million and some beachfront property in Idaho.’ We knew these guys and had a good relationship with them.” HVN did not put out an RFP seeking bids on the project, but Scanlon says his understanding of the market leads him to believe there would have been interest. “It’s kind of the hot trend right now,” he says. This project has been under discussion for several years and may not have come to fruition without the private sector assistance. HVN does get some state money, but neither the state of Connecticut nor the city of New Haven currently has enough cash to help expand, Scanlon says. And the situation at HVN, he adds, likely mirrors those at other airports around the country. “So, having an outside person come in with financial backing and credibility, and combining that with what we do here on the public side, I think is an interesting recipe for where we’re at,” Scanlon says. “It is something I think is going to be more common in the United States in the next few years.”

Right: Tweed New Haven Airport will get an extended runway and a new terminal as a result of its partnership with Avports. Commercial service from American and Avelo airlines is expected to start in 2023.

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Smaller Airports Getting Noticed The HVN project could be indicative of a couple things. First, the private market’s appetite for investing in airports remains as strong as, if not stronger than, it was before COVID-19 decimated travel in March 2020. Second, smaller airports might be getting a bigger bite of the apple than they were pre-pandemic, even when public-private partnerships started becoming trendy a few years back. So, when former New York Gov. Andrew Cuomo announced in August that the Port Authority of New York and New Jersey had reached an agreement with JFK Millennium Partners, which includes JetBlue Airways and the Vantage Airport Group, to build a new international Terminal 6 at John F. Kennedy International Airport (JFK), it was a big deal, but not necessarily a surprising one. The Port Authority has entered several P3 arrangements to update its airport infrastructure, most visibly the $8 billion overhaul of LaGuardia Airport (LGA). The new Terminal 6 at JFK will be an impactful project. It will connect to Jet Blue’s Terminal 5 and will be equipped with capacity for 10 new gates and 100,000 square feet of commercial dining and retail amenities. “This historic private investment will not only fortify New York’s reputation as our nation’s front door to the world, but also sets an example for how this country can tackle bold infrastructure projects that will jumpstart our economy with thousands

of good paying jobs even amid profound challenges like the pandemic,” Cuomo said at the time. But more surprising might be news that HVN and several smaller airports across the U.S. are expressing interest in P3 projects – and are getting nibbles back. Peter Kirsch, a partner at Kaplan Kirsch Rockwell LLP, says a handful of smaller airports are in various stages of discussion with P3 partners. In addition to HVN, Kirsch mentioned interest in a mixed office, entertainment and shopping complex that would connect Long Island Railroad to a relocated passenger terminal at Long Island MacArthur Airport (ISP) in Islip, N.Y. There hasn’t been a lot reported publicly on the project yet, he says, but “it is a very large, fascinating project.” Another small venue, Jack Edwards National Airport (GUF) in Gulf Shores, Ala. filed in August a statement of interest seeking a public-private partnership to develop and operate a passenger terminal there as part of its efforts to convert from a general aviation facility to a commercial service airport, according to Inframation, a media group that covers opportunities in infrastructure development. Sources also mentioned Paine Field (PAE) in Seattle, where commercial service started up in 2019 under the operation of Propeller Airports. There are communities surrounding PAE that have fought against commercial service originating there, but PAE has won awards, including being voted one of America’s Best Small Airports in USA Today’s “10 Best” reader poll in both 2020 and 2021.

Right: JFK Millennium Partners, which includes JetBlue Airways and Vantage Airport Group, will build a new international Terminal 6 at John F. Kennedy International in New York.

While it’s not been unheard of for smalland medium-sized airports to consider or receive private investments, Kirsch says he expects significant private interest in the mid-sized airports in the years ahead. “New Haven is the exception because it is so small, but I think mid-market airports, mid-sized airports, are ones that are going to be much more attractive because they can bite off a chunk that is big enough to get private interest but not so big that it’s overwhelming,” he says.

Driving The Push Regardless of airport size, there are a couple of phenomena driving private airport investment right now, Kirsch says. First, unlike after the Sept. 11 attacks 20 years ago, airports recognize that traffic will return, so while they have suspended some large capital projects, they have not terminated them. In the past, he says, airports canceled them and then, upon realizing traffic had returned they had to restart, costing them several years of progress. Second, airports are realizing that for various reasons, projects are more expensive than they thought. So, even with three COVID-19-related federal bailouts and, potentially, a significant infrastructure bill, projects still need additional funding. Add in the faster-than-expected return of traffic this past summer and airports are, again, looking into capacity enhancement projects. Subsequently, he adds, while the initial failure of a P3 project at Denver International Airport (DEN) aimed at redoing the Great Hall there has “cast a pall” over all P3 projects, subsequent successes at other airports along with the need for funding have industry leaders looking into them anyway.

“They are showing a fair amount of interest, flexibility, whatever in private financing options,” Kirsch says. “We have seen in the last couple months or so a fair number of airports tentatively beginning to stick their foot in the water of P3 projects.”

Money To Spend Furthering the push, says Elizabeth Dubeck, a partner with the Californiabased law firm O’Melveny & Myers, is that despite a rough 18 months, there is still significant money available with firms ready to invest. “People are encouraged by what we have seen so far and hopeful about the continuing improvement of the industry,” she says. “I think that is borne out by the excitement and enthusiasm for additional capital projects, redevelopment, privatization and P3s.” That enthusiasm is likely to be bolstered if promising movement on President Biden’s proposed infrastructure bill continues. Dubeck recently attended the 2022 P3 Airport Summit in San Diego and, while attendance was down, she says the idea of 400 people getting together to talk about the topic in this environment “is indicative of the desire folks have to get back to work in these areas. And I think there is still a huge amount of private equity money and other investments interested in these projects.”

Private Money Likely Project Based With all the airports looking for ways to fund projects, and with all the potential investors – which include global airport companies, infrastructure investment funds and public pension funds – the Reason Foundation suggests that long-term publicprivate airport leases would be one way governments could raise money to use on general governmental purposes. The study indicated that the market value of 31 large and medium U.S. airports could be $131 billion in total. “Over the past 30 years, numerous governments have corporatized or privatized large and medium airports and received direct financial benefits from doing so,” writes Robert Poole, director of transportation studies for the Reason Foundation, in a write-up of the study. Yet there are no examples of full-scale privatization in the continental U.S. Only Luis Munoz Marin International Airport (SJU) in Puerto Rico exists as an example at this time. And industry observers aren’t expecting that to change anytime soon. Even with smaller airports getting more nibbles on projects than ever, it’s unlikely that will lead to full-scale privatization of any airports, says Stephen Van Beek, a director with Steer. A long-time supporter of privatization, he pointed to the federal stimulus packages that airports benefited from during the height of the pandemic.

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“For one, you just got tens of billions of dollars for the industry from the government – and at the same time, you say ‘maybe I want to detach from that system and privatize,’” he says. “That doesn’t make a whole lot of sense to me, because the U.S. industry has been supported at a far greater amount than in other countries that have privatized their airports. … I have to admit that the government has provided far more support than I thought they would have when we got into Covid. And I give them great credit for that.” So, while there is money to be invested, it’ll likely continue to be on a project basis. “I’m probably called by half a dozen equity funds every couple months that have big balances in their equity funds asking me for projects where they might deploy that money and what I think the credit risk might be,” he says. “So, there is a lot of activity going on.” Kirsch ag rees. “W hole air por t privatization, either under the FAA’s program or as part of a P3, is not going to be the model,” he says. “That’s going to be the exception. I think you’re going to see a lot more private investment in this facility or that facility. Because the success stories of all-airport privatization are countered by a number of airports that simply have not figured out how to do it.”

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Left: The overhaul of LaGuardia Airport has been perhaps the most highly visible P3 project in the U.S. It is replacing a dilapidated terminal with a state-of-theart venue.

All this rings true with Alexis Higgins, CEO of Tulsa Airports Improvement Trust. She also attended the P3 airport event looking to learn about whether private partners might be the right move or even a viable one for some individual projects under discussion at Tulsa International Airport (TUL). Traditionally, P3 content was focused on terminals, concourses, operating revenues. “It was a way for an airport to update their services – terminals, facilities, rental car – without shelling out their own money,” Higgins says. “For an airport our size, that doesn’t make sense. They would have to take over the entire airport to make the

numbers work – that’s not something we’re interested in.” But she does have some non-aeronautical revenue-related projects simmering. The airport has five fixed-base operators, but all are full, so TUL may look for a partner to help build more. She might be looking at expanding the airport’s cargo capabilities and she also is looking at the infrastructure bill proposals. “I want to wait and see what comes out of that bill and then see how our projects line up with those priorities,” she adds, suggesting that she’s interested in private funds, but not gung-ho. “My concern is losing control. It’s important to me that the airport still has some control.”

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RECONNECTING THE INDUSTRY After Long Pause, Key Players Join For Networking, Education and Forward Planning The 2021 Airport Experience Conference brought airport and concessions executives together in the industry’s first concessions-focused event since the start of the pandemic. These images represent just a few of the many connections made over course of the four-day event.

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CO NF E R E NC E C OV E R A GE 2021

1 Fraport’s Mike Mullaney welcomes attendees to the 2021 Airport Experience Hall. 2 The inaugural Women in Leadership breakfast draws a large and enthusiastic crowd to kick off the 2021 AX Conference. 3 Hartsfield-Jackson Atlanta International Airport’s Marlene Coleman samples the pizza at the Prepango booth.

4 George Kennedy of Elevate Gourmet Brands and Dallas/ Fort Worth International Airport’s Michael Baldwin connect at the AX Conference. 5

Matt Von Klemperer and Michael Nedelkovich, both of Focus Brands, connect with Derryl Benton of HMSHost in the Experience Hall.

6 Patrick Wallace of Paradies Lagardère spiffs up with the help of the Classic Shine.

7 Laura Schmidt of Notes To Self showcases her brand. 8 Ellery Plowman and Christine Gallo, both of IP Program, kick off their AX Conference experience at the Women in Leadership Breakfast.. 9 Dan Solomon of Minute Suites embraces the Texas spirit.

10 Members of the Dallas/Fort Worth International Airport team connect at the annual Speaker’s Dinner. 11 Gameway’s Erik Ward checks in before starting his AX Conference experience. 12 A Jackmont Hospitality chef wows the crowd with an inhall cooking demonstration.

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13 The industry connects in the AX Experience Hall. 14 Steve Bass of EConnect, Patrick Murray and Charles Bush of SSP America, Renee Brooks of RHB & Associates, and George Johnson of SMFG at the Speaker’s Dinner.

15 Members of the Phoenix-Sky Harbor International Airport team at the annual Speaker’s Dinner. 16 The Experience Hall was bustling throughout the conference.

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17 Attendees spent late afternoon Sunday checking out Dallas Love Field. 18 DFW staff led attendees on a partial airport tour to kick off the AX Conference.

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AX CONFERENCE CONNECTION After A Brutal 16 Months, The Industry Draws Together For Networking, Learning And Camaraderie BY SHAFER ROSS

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CO NF E R E NC E C OV E R A GE 2021

After some brutal months in the aviation industry, and after a five-month delay, the airport and concessions industries gathered once again in August in Dallas for the Airport Experience Conference. This year’s overall attendee numbers were a bit smaller, reflecting an industry that has been through the wringer, but enthusiasm was high as shoots of recovery continue to form. Melissa Montes, publisher of Airport Experience News, welcomed guests to the four-day event that proved to be a catalyst for revitalizing businesses and restoring confidence. Ken Buchanan, executive vice president, revenue management for Dallas/Fort Worth Internatonal Airport (DFW), gave a warm welcome from the city and his airport. He voiced the thoughts of many as the industry seeks to navigate into the post-pandemic environment. “We want our customers to come back and we want them to feel safe, and we want them to trust that all business partners at DFW want to keep them safe,” Buchanan said.

Keynote Launch It often happens that the keynote address at the Airport Experience Conference each year tends to reflect an unofficial theme to the event, and 2021 was no different. This year’s keynote speaker, Erica Orange, executive vice president and chief operating officer of trend consulting firm the Future

Below: Melissa K. Montes, publisher and portfolio director of Airport Experience News, opened the 2021 Airport Experience Conference, held in August after a five-month delay.

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Above: Ken Buchanan, senior vice president, revenue management, at Dallas/Fort Worth International Airport, welcomed AX Conference attendees to the event and to Dallas. Right: Erica Orange, executive vice president at The Future Hunters, spoke on managing through change and embracing flexibility in navigating businesses into the future.

Hunters, has built her career on looking toward change, toward shifts in trends and toward, of course, the future, and when speaking to a room full of airport industry executives seeking insights into how things are changing and what they can do to keep up, she had a lot to share. “We are going through this period of accelerated change,” Orange told the audience. “Things are happening faster and faster than ever before.” While this was news to few in the room, she also stressed the importance of flexibility, of accepting changes as they present themselves and moving forward with new strategies. “We tend to think of trends and the future as being binary,” said Orange. “We think of trends going one way and countertrends going the opposite, kind of like a fork in the road.” This is hardly the case, she continued. “We need more flexibility in strategy,” she said, stressing the importance of understanding both trends

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and countertrends, the popular and the emergent, to meet as many customers’ needs as possible. Orange reflected on the recent past, on the events of the past two decades that have created the unique economic situation in which we currently find ourselves, but was resolute that while things are changing, they have also already changed, and retailers and restaurateurs need to be keeping abreast of what the new consumer is doing. “We need to rethink the whole nature of consumer segmentation, and we need to redefine generational names too,” she said, even suggesting that there is too little maintenance of the way we view these groups and their needs. “We do need to reevaluate [the generational divides] and rethink their values and attitudes every two to three years. “Your workforce is not five or six broad generations working together at once, but 20-25 microgenerations simultaneously working together,” she added, illustrating the ways in which both similarities and differences can present when groups are broken down and examined more thoroughly. Also, the term “Gen Z” is out - the new vernacular is Cybrids, said Orange, waving away the old term and describing the “Cyber hybrids; the first generation

in history to have a truly symbiotic relationship with the technology around them.” According to Orange, this group represents over 40 percent of consumers, and they have a significant influence over the purchasing choices of other generations in their households. Trying to force them to adhere to the shopping habits of their predecessors is “putting young brains into old, bad systems,” Orange said. These Cybrids are looking for transparency, authenticity and honesty. “How do you create and communicate truly honest messaging? Just put it all out there, and if you do, they will come,” she advised. “Whatever it is, it has to come from a place of integrity and purpose.” On the labor side of things, Orange believes tech-forward solutions like automation, AI, augmented and virtual reality aren’t going anywhere. She advises operators to “start rethinking how we distribute jobs, because automated jobs aren’t coming back to people.” Instead, look at existing programs and decide what could be enhanced using technologically advanced solutions that allow associates to concentrate their attention where it’s needed. “It’s not humans versus machines, it’s us and them to work together and work efficiently at a greater scale.”

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TACKLING THE ISSUES

Airport And Concessionaire Representatives Begin To Map The Way Forward BY SHAFER ROSS AND SALLY KRAL

Below: Unison Consulting’s Ken Buckner (far left) led a panel discussion of the labor challenges airports and concessionaires are facing as traffic ramps up again.

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The 2021 Airport Experience Conference featured an array of educational programming, but arguably the most important among them was a series of three sessions devoted to assessing the way forward into the post-pandemic environment. The operating landscape has changed dramatically over the past 18 months and most in the industry agree change is needed if all are to thrive. Over the course of the three sessions, 12 airport and concessions representatives came together, along with three moderators, to discuss how the changes are impacting business, and what can be done to forge new strategies for success.

Labor Issues In recent months labor has emerged as one of the most challenging issues for both airports and concessionaires. Labor

is a holdover issue for operators of all sizes in airports, but it is newly much more difficult to find workers than it had been pre-pandemic. Four airport concessions professionals discussed the issue and others affecting the bottom line during the Labor And The Cost Of Operating In Airports panel at the 2021 AX Conference. Staffing is a struggle. Further, in addition to being its own issue, it contributes to the supply chain woes that have choked many restaurants’ and retailers’ offerings throughout the past 18 months. While stores may not have enough associates to staff adequately, they may also be missing merchandise due to lack of delivery drivers or essential employees somewhere else along the chain. “It’s not just the people who work inside, it’s a global problem,” said Dawn Hunter, director, aviation commercial management for the Port of Seattle. “We’re having supply

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Body

chain issues… we have food shortages; it’s a trickle-down into the operations.” Port of Seattle, which manages Seattle-Tacoma International Airport (SEA), has even taken to a campaign that reminds people that the airport is struggling with shortages and asks that they have patience. “All of these things are challenging,” said Brian Quinn, deputy CEO at Hudson, discussing how these issues and more have affected his company’s operations. “But we’re starting to see better results in the last month than we have in the previous three or four months combined.” Optimism is certainly in the industry air but translating that optimism into actionable change that solves problems is tough. One possible solution is automation and technology, freeing up limited human labor to be strategically placed where it’s needed the most. “If we can make transactions faster, that helps the customer because then they’re able to move through quicker,” said Richard Schneider, chief operations officer for Areas USA. Technology like automated checkout or scannable QR codes for additional information or shopping options, he said, could “drive revenue, but also make the guest experience more frictionless.” In addition to technology that can help supplement struggling labor forces, Jim DeCock, director, revenue generation and partnership development for San Diego International Airport (SAN), said information is king.

“One positive of this struggle is that we’ve developed a relationship with the airlines where they’re sending us information on a daily basis,” said DeCock. This new sharing of traffic patterns, flight times and crowd size can certainly help airports and operators alike to better manage staffing, offering and timing to better serve the travelers in their terminals.

Above: Andrew Weddig of AWeddingConsulting (far left) moderated airport and concessionaire representatives as they grappled with how to solve the rising and unsustainable capital costs incurred in airports build-outs.

Capital Challenges The second panel in the series zeroed in on capital challenges faced by concessionaires as they seek to build out the spaces passengers most want to see in an airport. The Capital Conundrum panel at the 2021 AXC assembled representatives from two concessionaires and two airports to discuss the realities of trying to make money. “One of the things I love about this industry is the optimism,” said Robert Salarano, airport properties manager for St. Louis Lambert International Airport (STL). “But maybe optimism doesn’t have to be rose-colored glasses,” he added. Salarano believes that, while operators should be realistic about which concepts and buildouts can be supported in any given airport, the airport itself should also manage expectations on its end. “Some airports can really sustain beautiful concepts – and we can all have concepts that treat travelers to what they want – but not every airport can do every concept,” he said.

David Charles, president and chief operating officer of Marshall Retail Group, feels that the company’s airport partners have made a good showing of being cooperative and assisting where they can. “We’ve gone through this together and huge kudos to the airport partners who have seen the pressures that we’ve had and been willing to come to the conversation and ask how they can help us weather the storm,” he said. Paradies Lagardère’s vice president of marketing, John Cugasi, touted the airports as well, and encouraged both parties to be conscious of the strains that exist everywhere and be understanding of what that means for spending. “I wouldn’t say it’s a reluctance to invest, I would say you’re in business to make a return and you have to be careful about making assumptions,” he said. “Everybody here believes in this industry. And I believe this industry will be around a long time. …People that finance this business understand and believe in it as well.”

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Above: The looming issue of minimum annual guarantees was tacked by airport and concessions representatives in a conversation led by ICF’s Alan Gluck (far left).

The sentiment was echoed by Charlene Reynolds, assistant aviation director at Phoenix Sky Harbor International Airport (PHX), who said “I think what we’ll see in the short term is concessionaires being very precise.” She added, “Where I would normally expect to receive six responses on a food and beverage [RFP], I may receive only two now.” But, of course, there are no hard feelings. “If they have to sit out this one because it’s not the right time and they don’t have the capital to invest, from the airport standpoint I understand that.”

Spotlight On MAG The next conversation centered how the pandemic has exposed some serious flaws in the lease agreements governing partnerships between airports

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and concessionaires. Most notably, the inclusion of a minimum annual guarantee, or MAG, has come under scrutiny. Airport leaders Zenola Campbell, vice president of concessions for Dallas/Fort Worth International Airport (DFW), and Marlene Coleman, concessions director for Hartsfield-Jackson Atlanta International Airport (ATL) joined representatives from top concessionaires – Bryan Loden, vice president of business development for HMSHost, and Patrick Murray, executive vice president of SSP America – to share their insights on the MAG and other lease requirements and what the future may hold. A l a n Glu ck, s e n io r av i at io n management consultant for ICF, served as moderator and his first question cut right to the chase: “What should be done with the damn MAG?” Murray pointed out that the answer to this continues to fluctuate with the pandemic, but that in the short-term he hopes that airports will continue to waive MAGs until restaurant and retail operators are better positioned to succeed. “And the future is unknown,” he added. “Perhaps we’re putting too much pressure on ourselves to try to solve all of this right now, considering we’re still in the middle of the worst time in American history since World War II. It might not be the time to figure it all out, but there are a lot of components to discuss.”

Campbell noted that for DFW, the MAG has been viewed as one of the smaller components of the overall RFP process. She suggested that perhaps the focus should be on other areas. “It’s about looking collectively at where else we can change our costs, such as with construction or automation,” she said. As for the MAG, she said that both restaurants and airports need to be realistic about their expectations. “If we have a restaurant partner that says they’re going to do $15 million, but we know there’s no way in the world with that footprint that they’re going to be able to do that, we as the airport need to have to have the courage to say that,” she said. “No matter how badly we want that concept, it just is not going to be able to produce those transactions to make it a viable piece. There needs to be a give-andtake on both sides in regard to how we look at the model in the future.” Coleman pointed out that as an industry, this is the perfect opportunity to reconsider all the terms of lease agreements, including hours of operation. “Maybe some stores don’t really need to be open at certain times to still provide the level of service needed,” she said. Bringing it back to the MAG, Loden noted that he agreed with Murray that both short-term and long-term solutions are needed. “For the short-term, abatements of MAG until traffic returns to a certain level certainly makes sense, but

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then going forward, we would definitely have to build in a new lease model that if something catastrophic happens we can make a swift change,” he said. Gluck then asked that as traffic is returning, is it fair of the concessionaires to continue requesting relief on the MAG and other lease agreements? Murray pointed out that there is still a lot of instability right now. “There’s really no comparable time to right now and it’s completely uncertain how long it will last – where we used to bid on contracts that depended on having ten years of stability, we can’t even rely on having ten days of stability at this point,” he said. “And as it relates to the MAG, I think there’s disproportionate pressure on concessions when most have just come up above the water line of making money after losing it for a year and a half.” Coleman noted that just because a business signed a lease five years ago, airports should be understanding of the current situation and make adjustments accordingly. To this Gluck argued that airports don’t have that kind of money or flexibility. “And in the end, a legal

Below: ACDBE operator Pady Regnier shared her experiences in a panel focused on the unique challenges faced by small concessionaires during the pandemic.

document is a legal document,” he said. Coleman responded by pointing out that MAGs and lease agreements are effectively useless if there are no passengers coming in to spend money. “You can’t get blood from a turnip,” she said. Gluck then asked the panel to look past the pandemic and inquired why it should be the airport’s responsibility to give relief if a business signs a lease that it ultimately can’t commit to. “Part of it is the fact that we want to have viable businesses because it creates better programs and better competition,” Coleman replied. “So, I do think it’s an airport’s responsibility to be understanding. We set the tone, and with the documents that we put out, we’re the ones that really control the industry.” Campbell stressed that it’s incumbent on the airports to put less emphasis on the MAG. “If we can take the pressure off the MAG and focus instead on finding a reasonable percentage rent, I think the discussions around this would be a little bit different because the business will make money and the airport will make money. And then you can really look at what the concept is able to do and deliver.” Indeed, the future of the business is going to be a process and is going to take a lot of on-going conversations, Murray noted. “We all want to be in the bright future, but it’s going to take work to build it back, and we need to make notes along the way so we can make it better in the future, rather than trying to leap ahead and figure out the future faster than we can.”

ACDBE Challenges While not part of the three-part mega-session on Tuesday afternoon, the challenges faced by Airport Concessions Disadvantaged Business Enterprises are also in the spotlight as the industry continues to weather the pandemic. In a Monday morning session, three airport businesspeople with close ties to the ACDBE program shared their experiences leading their companies through hardship. “Since and during COVID, I found this to be an interesting opportunity to reset,” said Pady Regnier, CEO and founder of Airport Retail Group LLC. Like many businessowners, she saw the pandemicinduced dearth of customers as, among other things, a chance to make changes that could push the business forward once things begin to pick up again. In addition to a new outlook on business, Regnier hopes other ACDBE operators see the pandemic as an opportunity to reevaluate their relationships with each other. “What are the key things that we want to make some change in and make better?” She asked. “I’m worried that we’re not seeing much growth in the ACDBE program. …There’s a lot of reasons for that. My dream is that ACDBEs team up.” Nicholas Crews, president, CEO and managing partner of Crews Hospitality, also believes company-airport relationships have room for improvement. Looking at things differently, he said, could also help alleviate money issues. “It’s going to take creative solutions from local airports,” he said. “It’s going to be a combination of the local airports and a change, I think, in the guidance and regulation of how you’re able to obtain financing and [different financing options].” He added, “As we’re approaching this, we all have to continue to drive the purpose of the ACDBE program, which is to level the playing field for concessions opportunities.” “Being financially conservative really helped,” recalled Adrian Beard, president of Whitman May Enterprises Inc. “Getting the PPP loans really helped. The forgiveness was even better.” Beard said getting creative with loans and where they came from gave his business a boost in the beginning. More recently, he said, he was impressed by the way primes at some airports came to the table to talk with ACDBEs and help them plan through until the return of a more stable traffic level.

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DIRECTOR INSIGHTS

Four Airport Directors Discuss Way Forward For The Industry BY SHAFER ROSS Each year, Airport Experience News convenes a handful of the industry’s most dynamic airport leaders to discuss the hardships they face as well as the opportunities they see on the horizon at the Airport Experience Conference. This year, four distinguished airport executives took the stage for the Airport Directors Panel. The 2021 Directors Panel was sponsored by HMSHost. Derryl Benton, executive vice president of HMSHost, thanked airport partners for working with operators to stay afloat during the recent unprecedented downturn. “Without our airport partners, I believe the concessionaires – all of us – would not be in business today,” he said, adding that they “stepped up and helped and worked with operators to find workable solutions.” Air travel rebounded at many airports in summer 2021, even while the pandemic continued to wreak havoc throughout North America and the world. Fort LauderdaleHollywood International Airport’s (FLL) Mark Gale, CEO and director of aviation, acknowledging the juxtaposition of the recent upswing in traffic caused by the adoption of the coronavirus vaccine with the even more recent emergence of the Delta variant of the virus, which has proven to be even more contagious than its predecessor and is keeping infection rates across the country high. “I wish you would have asked me about the look-ahead a few weeks ago, before the Delta variant,” he joked, but added, “The outlook for us is very, very positive. We’re a destination market and have a reputation as a low-cost facility with many airlines flying through it.” Gale said he considers himself to be a “glass half full and rising” type of person.

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Jamie Rhee, commissioner of the Chicago Department of Aviation (CDA), shared the optimism but acknowledged that the lessons learned during COVID should not be forgotten once the spread is under control. “There has to be some reset and we have to look at things in a different way,” she said. “This isn’t the last time we’re going to see some disruption like this, so we need to take these lessons learned.” Everyone with ties to the aviation industry suffered through

Above: Mark Gale, CEO and director of aviation, Fort Lauderdale-Hollywood International Airport.

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Top Left: Jamie Rhee, commissioner, Chicago Department of Aviation. Top Right: Tom Ruth, president and CEO, Edmonton Airports.

COVID, she said, and the inconsistency of protocol regarding travel, distancing, precautions and guidelines isn’t helping, even as traffic comes back. That said, at least in the U.S., airport stakeholders were able to claim support from the federal government when it was offered at various times over the last eighteen months. Airport directors in Canada, like Edmonton Airports’ President and CEO Tom Ruth, had to hold their teams and facilities together with little support from the government. “I’m just so proud of how our employees have worked within the airport environment, how they handled everything,” he said. “We were all fighting to save our businesses and save aviation.” Ruth’s team was able to collaborate heavily with their in-airport partners instead, working together with their concessions tenants particularly to find new marketing solutions to drive whatever revenue they could generate. Looking more to the immediate future, Ruth said he hopes for more collaborative efforts between governments and industries to streamline the process of getting back to normal. “I think it’s really critical, particularly for international travel, that we’re able to have consistency,” he said. “It’s going to take a lot longer to come back if people don’t have trust in efficiency.” Cathryn Stephens, acting airport director at Eugene Airport (EUG), said that for her airport, that struggle is already presenting itself. She said EUG is “fully above 2019 numbers now,” and that return of traffic has put new strains on the facilities that she doesn’t feel the airport is yet equipped to address.

Left: Cathryn Stephens, acting airport director, Eugene Airport.

“Without fully financially recovering yet, we still need to build more space,” Stephens said. One source of funding for infrastructural improvements should be, of course, Passenger Facility Charges (PFCs), but as Stephens mentioned, that program, too, is behind the times. “Somehow, we’ve got to figure out a better model around funding our airports,” she said. “if we’re not investing in those economic drivers, the rest of the community suffers for it.”

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CELEBRATING DIVERSITY AX Conference Features Women In Leadership Breakfast; DE&I Panel BY ANDREW TELLIJOHN AND SHAFER ROSS The Airport Experience Conference broke new ground this year with its firstever women-centric event, a Women in Leadership Breakfast. The event included a panel discussion with three powerful industry leaders who detailed how they advanced their storied careers and shared thoughts on paying their successes forward to the next generation. Zenola Campbell, vice president of concessions at Dallas/Fort Worth International Airport (DFW); Rhonda Hamm-Niebruegge, executive director at St. Louis Lambert International Airport (STL) and Pilar Guzman Zavala, CEO of Half Moon Empanadas, each have faced and overcome challenges in reaching and maintaining their current leadership roles. Guzman Zavala talked of the fear she felt during the early days of COVID-19 as her small but growing restaurant chain all but shut down when the pandemic decimated traffic. To keep her staff employed, her company became certified to cook and deliver meals for seniors in the community until business began returning to airports. That involved learning to work with an app, making several different meals and running trucks for deliveries. Top Left: Melissa K. Montes, publisher and portfolio director at Airport Experience News, moderated both the Women in Leadership panel and the Diversity and Inclusion panel. Top Right: Pilar Guzman Zavala, CEO, Half Moon Empanadas. Bottom: Zenola Campbell, vice president of concessions, Dallas/Fort Worth International Airport (left); and Rhonda Hamm-Niebruegge, executive director at St. Louis Lambert International Airport (right).

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“Our team, which is mostly women, they all got onboard, and we reinvented ourselves,” she said. “I’m really proud that it allowed us to have a team after COVID.” Before Hamm-Niebruegge became STL’s director, she had a career in airlines, beginning with Trans World Airlines (TWA). While at TWA, she had risen from working on the ramp at STL to overseeing operations at 101 North American airports. But after helping integrate TWA into American Airlines, she declined to move to the airline’s Dallas headquarters, instead choosing to stay in St. Louis. She took a

step backward to run the hub, which she ultimately helped shut down as the airport was dehubbed. While it was bittersweet to see that happen, Hamm-Niebruegge says it put her back in touch with city officials in St. Louis who, upon her retirement from American, helped convince her to take the role leading the airport. “I wouldn’t trade my career for anything,” she said. “That’s the story we have to tell. You can take a million different career paths in this industry. Some of mine, I went backwards, but at the end of the day, it’s been a great career.”

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Right: The Diversity & Inclusion For A Better Workforce panel discussed the benefits of acceptance and inclusion of diverse individuals.

During a similar career crossroad after the advertising agency she was working with lost a large account, Campbell was ready to move to another agency when she got a call from a former boss who talked her into an interview and ultimately a job. That decision paved the way for her to end up at the airport. “There are times you do have to pivot and there are times you do have to step back in order to move forward,” Campbell said. “Don’t be afraid of that, because each time I’ve done that, it always has ended in something greater.” Participants talked about making sure they use their successes as a platform for bringing other women to the table. A group of female airport directors, HammNiebruegge said, not only meet together to talk shop amongst themselves, but they also share their wisdom with up-and-coming leaders who could take the helm in the future. “We help mentor them and have an organization where they can come together with us through the year and learn and hopefully move them up,” she said. Beyond that, she added, school-aged kids need to be a target. “It really is trying to reach out on that junior high, high school level and getting women to think about the opportunities inside aviation,” HammNiebruegge said. Campbell agreed. She has worked closely mentoring local kids in the National Society of Black Engineers’ junior chapter in Dallas, giving them an opportunity to experience aspects of the airport they might not otherwise think about. “Their eyes open when it comes to what is available at the airport,” she said. “They start to see that ‘wow, this is something that I can do.’” The speakers encouraged women to speak up and be heard. Zavala recalled an opportunity to meet President Joe Biden.

She filled him in on her belief that small businesses needed to be the focus of his relief efforts during COVID. “You don’t have to be afraid to raise your voice. I said ‘I have this floor and you are going to listen to me.’”

Inclusive Strategies In addition to the new focus on women, the 2021 AXC also held a Diversity & Inclusion For A Better Workforce panel. Four industry professionals sat down to discuss how driving acceptance of diverse individuals and inclusion of differing ideas is a benefit to any organization, as well as a responsibility of leadership. Jamie Rhee, commissioner for the Chicago Department of Aviation (CDA) discussed how important she feels it is to incorporate new ideas from new people, especially as someone in a position of power. To this end, she encourages frequent meetings to discuss how the CDA could improve, both as an employer and as a community leader. Rhee emphasized how much fresh input can be offered when the people in charge seek it out. “We have that seat at the table, and we have to make sure we’re reaching way out with it.” Joe Thornton, who was appointed executive vice president and chief operating officer of HMSHost on March 9, 2020 – mere days before the pandemic plunged the world into uncertainty – feels similarly. He insisted on creating a committee of existing employees to identify and discuss the shortcomings of the company in an honest, open forum which gives employees at every

level the opportunity to speak directly to management. Thornton said, “If you work in an organization where the top of the organization is not engaged on this – you may be somewhat successful, but you won’t be totally successful.” He added, “Giving a voice to people in this is critical.” Indeed, the visibility and volatility of political discourse, race relations and other hot-button topics has created high tensions in both public and private spheres. Floria Washington, program manager, learning/development, diversity and inclusion for the Columbus Regional Airports Authority (CRAA), said her team felt the immediate need to address certain issues, but not blindly. “We needed to step back and ask ourselves… what was it that we were going to do? We started with listening. We listened to our employees,” she said. “Our strategic blueprint is based on what we’ve heard from our employees.” A theme of the discussion was open and honest communication. Jeffrey Jackson, vice president, Landrum & Brown, explained his strategy of “tell the truth meetings” – one-on-one, off-the-record sit-downs in which employees can be honest with their superiors about their feelings regarding the company, the work environment and how things could change for the better. “Some of the best ideas come from the quietest people in the company,” Jackson said. “If you’re listening to the loudest, you’re probably not doing great.”

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MAKING IT HAPPEN

Business Pitch Showcase, Airport Opportunities, Spotlight Inroads Into Airports BY SHAFER ROSS AND SALLY KRAL

Despite the hard hits many businesses have taken since the beginning of the pandemic, innovation hasn’t stopped. There’s no better illustration of this than the 2021 AXC Business Pitch Showcase, an attendee favorite in which business owners were given a few minutes to pitch their product to a panel of airport professionals, who provided insight and feedback to help the companies on their path into the airport space. First on the stage were Ellery Plowman and Christine Gallo, both of IP Program, which produces a variety of UV light sanitizing technology, including autonomous robots, disinfecting mats for shoes and cleansing boxes for small personal items. Supported by a study done by the Pentagon at El Paso International Airport (ELP), the machines use ultraviolet light to kill pathogens both on surfaces and floating in the air. “I think everything is now a hospital and we’re trying to fight various pathogens and infections in every environment,” said Gallo, principal owner and founder of the company. “This is a great way for you to say that your airports are safe, and these are the extra things you’re doing, and that’s important.” Gallo said her robots can disinfect the entirety of a terminal in as little as two hours.

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Another hopeful pitch came from Zach Rubin, founder of Sleepy Sleeves. Deceptively simple and conveniently sized, Rubin’s sleeves are soft and slide onto the arm to provide a cushioned surface against which to rest one’s head. The line included headbands featuring a similar pillow for weary travelers who prefer to rest their heads against the window. “We’re envisioning undercutting the neck pillows… which typically retail for about $30 in the airport space,” Rubin told the judges. With the advantage of both size and cost, Rubin insisted that Sleepy Sleeves are “the most revolutionary travel and leisure accessory since the neck pillow.” Another new idea brought was to the stage by Barry McGowan, CEO of Fogo de Chão, a Brazilian steakhouse chain that operates serves meat churrascaria-style across the country, but not yet in airports. “The secret to our model is customization, immediacy and providing each guest their own experience,” McGowan said. He emphasized the speed with which Fogo de Chão can push through customers, a must in the busy airport space – specifically in international hubs, which McGowan said the company is targeting, at least for now. Back in the retail space, Vive Organic co-founder JR Simich pitched his company’s

Above: Zach Rubin (far left), founder of Sleepy Sleeves, makes his product pitch to judges (l-r) Alea Larocque of Mission Yogurt, Roddy McOwan of Marshall Retail Group, Jeffrey Taylor of Jacksonville International Airport, and Mike Rawson of Salt Lake City International Airport.

fresh-pressed juices and juice shots to the showcase judges. Packaged in 100 percent recycled materials and utilizing “ugly produce” – fruits and veggies that can’t be sold in grocery stores due to imperfections – and formulated with the help of doctors, Vive Organic is already partnered with Hollywood Burbank Airport (BUR), but is looking to branch out. Last to present was Greg Gasparini of THE DRIPBaR, a clinic-style service offering IV therapy treatment to walk-in visitors who could use a boost. THE DRIPBaR offers different drips and packs that are administered intravenously, and which can refresh and boost health. Already a trend pre-pandemic, the mainstream’s interest in wellness carries over even to unorthodox treatments like vitamin IVs. “People are keen on their immunity these days,” Gasparini said. “It’s been nothing but a silver lining for us, because our numbers are up 3 percent from previous years.”

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Airport Opportunities Airports, too, took to the stage at AXC. Airport construction and renovation has slowed considerably due to the pandemic and the resulting downturn in passenger traffic, but there are still major projects pushing ahead throughout North America. Leaders from five major airports shared what plans are currently underway and discussed upcoming opportunities in their concessions and other revenue-generating areas. Jim DeCock, interim director of revenue generation and partnership development for San Diego International Airport (SAN), focused on the project scope for the airport’s new Terminal 1, which involves building 38 new gates, 19 of which are scheduled to open in December 2024, with the remaining 11 opening in December 2026. Spots for concessions opportunities in the new terminal include 52,000 square feet and 20 locations for food and beverage; 25,000 square feet and 21 locations for retail; and 20,000 square feet and 2 locations for club space. “For our RFP process, we’ll start our development work early next year and get the RFP out probably by late 2023,” DeCock said. He then discussed upcoming retail concession opportunities at the airport’s Terminal 2. There are 13,500 square feet and 20 locations available, and the RFP will be sent out early next year, with leases executed by September. Next, Kevin Lemmons, assistant vice president of concessions for Dallas/Fort Worth International Airport (DFW), noted that due to the pandemic, the airport’s active RFP in early 2020 had to be terminated and the airport allowed for temporary closures without penalties for its existing concessions and extended all leases by two years. “So, the spaces that were available for our RFP last year are now going to be coming back around for a future RFP,” he said. At the start of the pandemic DFW was initially planning construction for Terminal F but has now had to postpone that project and will instead be focusing on Terminal C updates, including the construction of a pier and new gates, which will occur from October 2022 to October 2024. “So probably around that same time, maybe a little earlier, you’ll start seeing some RFPs for upcoming opportunities in the Terminal C Pier and future phases of C,” Lemmons said. In addition, there will be a pier and new gates added to Terminal

Above: Jim DeCock, interim director of revenue generation and partnership development for San Diego International Airport, shared upcoming opportunities in the airport’s new Terminal 1. Right: Jaimini Erskine, director of the office of commercial management for Maryland Aviation Administration, outlined upcoming concessions opportunities in Terminal A and the A/B Connector, with RFPs expected to be released in Q1 2022.

A from May 2023 to July 2025, with RFPs sent out 18 months to two years prior to project completion. Brad Wolfe, commercial manager for Salt Lake City International Airport (SLC), shared the latest for Phase 2 of the airport overhaul. The RFPs for Phase 2 will be published in October, and the airport is looking to fill 19 locations with a mix of food and beverage, retail, news and gifts, and services. Two of these locations will have liquor licenses. “We’re definitely looking for more food and beverage, especially more affordable options, more fast food and a balanced mix of local and national brands,” Wolfe said, noting that they’re looking for branded concepts rather than generic airport brands. Phase 3 will begin in about a year, with RFP publication in fall 2022, and then Phase 4 will occur “in the not-too-distant future.” Representing Baltimore/Washington International Thurgood Marshall Airport (BWI), Jaimini Erskine, director of the office of commercial management for Maryland Aviation Administration, shared the latest from her airport. BWI had to pause its new 26-acre Southwest hangar project during

the pandemic, but it is now moving forward, and construction of its new gas station is also back on track. In 2019, BWI started its $48 million Terminal A expansion project, which is 55,000 square feet and was supposed to be completed in March 2020 and only ended up being a few months behind schedule. The next big project is upgrading the A/B connector area, which will begin this fall and be completed in 2025. “This will add about 45,000 square feet of new concession space, restroom renovations and other upgrades,” Erskine said. RFPs will be released in the first quarter of 2022 and will include spaces in both Terminal A and the A/B connector area. Finally, Brandon Mark, manager of aviation properties for Port of Oakland, presented on behalf of Oakland International Airport (OAK). Leases on OAK’s current retail program, which covers its two terminals, are set to expire in the middle of next year, though this will likely be extended slightly due to the pandemic. “We have quite a range of successes and sales per square foot, so we believe there’s some really great opportunities to increase sales at some of these units,” Mark said. “Plus, we’re relocating some kiosks and working on getting at least two or three new spaces.” He added that since the airport is a heavy O&D market with very low dwell times, they’re not looking at a lot of special retail but rather grab-and-go options and coffee brands. “We’re looking at getting the RFP out in October, and October 2022 is when we expect that the new contracts will be in place,” he said. “Our board is very interested in a sense of place, so we’re really hoping that there will at least be representation from local vendors and the products within the stores.”

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AXINNOVATION THEATER Added Stage Brings Dynamic Content Into Experience Hall BY SALLY KRAL

Top: Michael Beacham, president of REEF Kitchens. Above: Lise D’Andrea, president and CEO of CXE, Inc.

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A new addition to the 2021 Airport Experience Con ference wa s t he AXiNnovation Theater, a stage within the Experience Hall that provided a platform for fresh ideas and innovative conversations about the airport space to reach an audience of engaged industry professionals. First up, Michael Beacham, president of REEF Kitchens, took to the stage to discuss how REEF, the world’s largest ghost kitchen operator, is transforming today’s restaurant delivery business model. REEF was founded in 2013 and today brings in more than $2.5 billion in revenue. Partnering with nearly 200 different brands, REEF operates 3,000 ghost kitchens in streetside venues across North America, Europe, South America and the Middle East that are strategically placed in close proximity to consumers in need of fast delivery of food and beverage and retail items. “At REEF, we believe and we’ve proven that we can build a network of enabled real estate and leverage the proximity of that real estate to bring goods and services closer to our consumers,” Beacham said. But Beacham added that REEF does not pose a threat to other restaurants and businesses. “We’re not looking to come into the airport space that’s already struggling to steal market share from other people.” Rather, REEF seeks to help airports and concessionaires substantially increase revenue by reaching underserved passengers throughout the airport. For the airport, REEF can serve as a franchisee food and beverage operator, and for concessionaires REEF can license its brands at negotiated rates. “We want passengers to be happy – we want them to get what they want when they want it,” Beacham said.

Employee Retention Strategies Employee retention was the next topic on the stage. Lise D’Andrea, president and CEO of CXE, Inc., came to the AXiNnovation Theater to share ways to boost employee engagement and satisfaction, which in turn improves customer service. Her presentation came against the backdrop of unprecedented challenges in filling customer-facing positions at airports. CXE seeks to help industry leaders attract, retain and support employees beyond just pay raises by designing and delivering customized, interactive coaching and training that positively influences employee behavior and performance. D’Andrea noted that while money is a large and important element of employee retention, it alone is not enough. “How can we reimagine the employee experience and overall service culture in our organizations and create a workplace environment that’s interesting, rewarding and fulfilling instead of just a paycheck?” D’Andrea advised that leaders create a strategic plan that looks at the following areas for improvement and optimization: employee onboarding and training; tools and guidance needed for employees to perform their jobs effectively, confidently and safely; lines of communication between employees and leadership; employee coaching and mentoring; and employee recognition and appreciation.

Tech And The Travel Experience The evolution of travel technology and how the entire ecosystem can work together to strengthen the travel experience, rebuild

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confidence and adapt to a changing landscape were next in the spotlight. Chris Gwilliam, vice president of business development for Airport Dimensions, and Jeff Livney, chief experience officer of Servy (formerly Grab), led the panel, which included Chris Hartman, chief experience officer of AtYourGate; Eileen Hanson, senior vice president of commercial strategy for Unibail-RodamcoWestfield (URW); Zenola Campbell, vice president of concessions for Dallas Fort Worth International Airport (DFW); and Dana Pouwels, lounge general manager for JPMorgan Chase. The pandemic brought about a paradigm shift with increased safety measures, changing traveler behaviors and the need for technology solutions. This accelerated

the speed at which consumers adopt both existing and new digital offerings, created new consumer travel expectations and new opportunities to enhance the airport guest experience. QR codes, for instance, were a dying technology in early 2020 but are now featured everywhere, as touchless technologies are more in demand than ever. This was a common thread throughout much of the discussion: whether when visiting an airport restroom, concession or lounge, passengers want contactless tech solutions. At DFW, Campbell noted the success of things like delivery apps, food lockers, ghost kitchens, and grab-and-go kiosks. Hanson noted that what customers want – variety, value, speed – hasn’t changed since the pandemic, but how they want it

Above: Airport Dimensions’ Chris Gwilliam (far left) and Servy’s Jeff Livney (far right) brought together a panel of industry executives to discuss the evolution of travel technology and its impact on the passenger experience.

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Below: ReachTV convened a panel to discuss the role of airport television in developing business and enhancing the customer experience.

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has. “They want options for how and where to order, how to pay and how to pick-up or have their items delivered to them,” she said. “A seamless digital experience is just as important moving forward as a seamless physical experience and the two must be completely integrated.” She added that URW’s approach has been to completely digitize the retail and food and beverage experiences at several airports by having mobile-friendly menus and product offerings, pointing out that the company’s data shows that consumers are much more likely to make in-store purchases if they’re able to browse selections on their phones ahead of time. “And during COVID we partnered with Servy and AtYourGate to seamlessly plug in the preorder function,” she said. “These ongoing enhancements to the digital platform to ease the customer experience and reduce pain points are something that we’re greatly focused on.” For JPMorgan Chase, which partnered with Airport Dimensions to launch the Chase Sapphire Lounge brand in select markets, Pouwels noted that the main areas of changing behaviors that the company is focusing on are personalization and curated experiences; digital, on-demand, contactless interactions; and intentional travel. “Our customers have had to change and evolve over the last 18 months, and we’re interested in meeting them where they are,” she said. Hartman noted that joining forces and working collaboratively will be necessary

to creating a fully integrated digital experience that meets traveler needs. “I think we all realize that the travel day does not begin and end in the same airport – we’re all stakeholders in the stewardship of the travel day,” he said. “There need to be consistencies and relevance to create that network effect.”

In-Airport Programming Airport executives and the operators of the biggest airport television network took to the AXiNnovation Theater stage to discuss the multi-faceted value of airport television in developing airport business and ensuring the best possible airport experience. Holly Firfer, head of programming and development and on-air host for ReachTV, moderated the panel, which included Lynnwood Bibbens, CEO and founder of ReachTV; Atousa Ghoreichi, vice president of marketing and communications for HMSHost; and Demetria Wideman, senior manager of business development and marketing for Hartsfield-Jackson Atlanta International Airport (ATL). Television is an integral element of the airport environment. “It’s about driving awareness,” Wideman said. “The biggest challenge in the airport, especially of ATL’s size, is to communicate all the great options that we have here. It doesn’t do us any good to bring in all these great concessions if nobody knows that they

CO NF E R E NC E C OV E R A GE 2021

exist. Being able to show travelers the breadth of our offerings on ReachTV screens is extremely important to our bottom-line revenues.” And, of course, this is helpful for concessionaires like HMSHost, as it promotes their concepts and helps them share important messaging, Ghoreichi noted. And with so much signage about safety procedures around the airport these days, screens provide a more appealing approach to sharing information. “The screens attract attention in a different way, so anything that goes up there is going to have a much more impactful, lasting impression than a static sign,” Ghoreichi said. Beyond sharing information about the airport and its protocols, Reach TV also offers uplifting programming to entertain and relax passengers. “We have a mixture of short-form and long-form content to engage them,” Bibbens said. “We come from a place of truth and positivity in everything that we do and that provides what we call a ‘lean back experience’ so they feel comfortable to stay in front of that screen, which helps drive revenue – the longer they stay, the more they pay.” Indeed, the screens help remove passengers from all the stress of their travel, Wideman noted. “Allowing our customers to sit back, relax and not think for a little while as they watch TV before their flights is huge and even more important now as we’re coming out of this pandemic.”

Above: Southwest Airlines’ Andrea Goodpasture joined AXN’s Andrew Tellijohn for a discussion about the airline’s plans as the industry moves beyond the pandemic.

Southwest’s Take Finally, not unlike airports and concessionaires, airlines have had to pivot in the wake of the pandemic. Andrea Goodpasture, airport affairs director for Southwest Airlines, joined Airport Experience News senior writer Andrew Tellijohn on the AXiNnovation Theater stage for a one-on-one conversation about the current landscape and hopes for the future. Goodpasture noted that despite a summer surge, recovery is still tentative. “Due to the emergence of the Delta variant, we have seen a softening in bookings, and a full return to 2019 numbers hinges on the return of business travelers, but as the pandemic continues to evolve, so does that timeline,” she says. Indeed, business as well as international travel are the lagging pieces of the puzzle right now. “We’re seeing more and more onboard every day and we’re always engaged with our corporate customers and talking with them about their needs and expectations so we can be ready for those returning travelers,” Goodpasture added. She added that another dynamic that the airline is pivoting around is the change to a more leisure-focused traveler, which requires

some operational adjustments. For instance, leisure travelers tend to have a higher checked bag ratio. “It’s just a different dynamic that we’re working on very diligently,” she said. Telljohn brought up the new routes that many airlines, Southwest included, have been adding and expanding. “Can you talk about that strategy and how you were able to do that at a time when everything is really up in the air?” he asked. Goodpasture noted that when the pandemic first hit, Southwest became very focused on taking a balanced approach through cost management and expansion. “And that expansion added 18 new airports to our route structure opening between November 2020 and November of this year, which is about ten years’ worth of progress,” she said. “The thought behind that was to add airports in the places that are our customers who are traveling are looking to go to at this time, such as vacation locales. And it also comes back to Southwest’s focus on job preservation for our employees. We were very thankful for the federal government’s payroll support program that helped us retain jobs – we did not have any involuntary layoffs due to the pandemic. That’s been a real tribute to our leadership and our focus on protecting jobs, as well as serving our customers with where they want to go.” Telljohn then asked Goodpasture about Southwest’s current and future plans for construction and infrastructure updates. “Like many, we were growing rapidly pre-pandemic and so a lot of plans had to be reassessed, but some did move forward through 2020 and we opened several new facilities…,” she said, pointing to the newly upgraded Terminal B of LaGuardia Airport (LGA) and the entirely new Salt Lake City International Airport (SLC) as examples. As for projects that are currently underway, the new terminal project at Kansas City International Airport (KCI) is moving forward after being halted by the pandemic and is slated to open in mid-2023, and there will be eight new Southwest gates opening at Phoenix Sky Harbor International Airport (PHX) next year, as well. “We really value our partnerships with our airports and the airport ecosystem – that collaboration is so important, as none of us succeed without each other,” Goodpasture added. “I think that’s the only way to approach things. It’s what’s kept us going through the pandemic and is critical to our ongoing recovery and restoration.”

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Assessing the Post-Pandemic Traveler

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10/28/20 12:30 PM

BEFORE YOU TAKE OFF

VACCINE TOURISM

International Travelers Get The Jab At SFO’s Free Vaccine Clinic BY SHAFER ROSS

s recently as the beginning of this year, many airport officials probably didn’t think they’d be offering COVID-19 vaccinations right in the terminal. On-premises testing centers were at the height of their popularity, but no one was sure how accessible jabs would be once the general public was approved to begin getting them, or whether there would be demand in the space. Those questions were quickly answered. A handful of airports across the country are now offering vaccines to staff and travelers alike and interest is buzzing. At San Francisco International Airport (SFO), which has been offering free vaccines to all travelers since May of this year, officials have noticed a trend in the number of international travelers taking advantage of the opportunity. “This really began in early May when the airport hosted a vaccine clinic located in the international terminal. The original target audience for this vaccine clinic was airport workers but …by the time we reached early

Top and Above: SFO has administered more than 30,000 jabs of the single-dose Johnson & Johnson vaccine since it began offering the vaccine in February,. More than 1,000 of those having gone to travelers from non-U.S. countries since the end of May.

May a lot of the people around us had already found a way to get vaccinated elsewhere,” says Doug Yakel, public information officer for SFO. “Then we opened it up to travelers at large and that’s really when we began hearing that there were people in other countries – maybe they had already planned to be at SFO, they had already had a trip planned – starting to make this a part of their visit to San Francisco.” Yakel says the airport has administered more than 30,000 doses of the single-dose Johnson & Johnson vaccine since first beginning to offer the vaccine in February, with more than 1,000 of those having gone to travelers from non-U.S. countries just since the end of May. At press time, more than 80 percent of upcoming vaccine appointments were with non-U.S. citizens, establishing this trend for at least the foreseeable future. “A month ago, we began to see this trend in which foreign countries were poised to begin overtaking U.S. citizens in being vaccinated at our medical clinic,” Yakel says, noting that travelers from Taiwan were, at press time, about to be the largest group getting vaccinated while passing through SFO. “Our hope is that this trend will help to inspire a further opening of travel to some markets like Asia, which have been recovering more slowly.” While Yakel isn’t certain that the United States’ abundance of vaccine doses are the only pull bringing international travelers to SFO, only to jump right back on a plane home after getting jabbed, he does acknowledge that the future success of and demand for vaccine centers at airports depends largely on the ever-changing rules regarding entering the U.S. “We’re starting to hear from the Biden administration that there may be a requirement forthcoming that calls upon all people entering the U.S. to be vaccinated before they fly here,” says Yakel. If that happens, he believes, there would be little need for vaccine options to be offered right in the airport, specifically in international terminals.

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