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138 Resource Manual for Airport In-Terminal Concessions 12 10 8 Years 6 4 2 0 Advertising Duty Free Food & News/Gift Services Specialty Beverage Retail Large Hub Medium Hub Small Hub Non-Hub Source: LeighFisher using data from the airport surveys conducted for ACRP Project 01-11. Figure 9-1. Typical term lengths in concession agreements. is generated in a potential concession opportunity, a longer term may be needed for the con- cession opportunity to be viable. • The contracting approach. Term lengths of concession agreements in the Direct Leasing and Prime Concessionaire approach are similar. The term lengths of Third-Party Developer agree- ments are longer because of the additional front-end hard (construction) and soft (marketing, leasing, and management) costs inherent in Developer agreements. • Airport development plans. New concession locations or anticipated closures of existing locations for terminal redevelopment may justify longer terms to maintain continuity during periods of change, to offer additional periods of time to compensate for additional investment, or to offset sales decreases. • Concession concept types. Customarily, the term lengths for convenience retail agreements are longer than the term lengths for specialty retail agreements because of the narrower mar- gins in newsstand merchandise. Food and beverage agreement terms are longer than retail agreement terms because of the additional equipment required and higher buildout costs. 60% 50% Percent of reporting airports 40% 30% 20% 10% 0% 1 Year 2 Years 3 Years 4 Years 5 Years Other Advertising D uty Free Food & Beverage News/Gift S ervices Specialty Retail Source: LeighFisher using data from the airport surveys conducted for ACRP Project 01-11. Figure 9-2. Typical term extension option periods in concession agreements.

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154 Resource Manual for Airport In-Terminal Concessions Cost of constructing improvements Design review processes Lack of transparency in solicitation process Length of term Mid-term refurbishment requirements Minimum annual guarantees Percentage rents Performance standards in concession agreements RFP processes Concessionaires Airport operators Street pricing 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 No Importance High Importance Source: LeighFisher using data from the airport surveys conducted for ACRP Project 01-11. Figure 9-7. Airport concession industry business practices in need of improvement. include, among other types, in-terminal concession agreements. An accompanying CD-ROM provides sample agreements. The CD-ROM included as part of ACRP Report 33 is also avail- able for download from the Transportation Research Board’s website as an ISO image. The report and sample agreements may be downloaded at http://www.trb.org/Publications/Blurbs/ Guidebook_for_Developing_and_Managing_Airport_Cont_164803.aspx.