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compliance of tenant and concessionaire leases and
contracts.
ADVERTISING PROGRAMS
Airport advertising can reach an exclusive and upscale audi-
ence, and can be an important complement to the standard
media mix. With longer dwell times, airport customers can
now take the time to read advertisements. Modern airport
advertising programs specialize in the sales and maintenance
of advertising sites at airports. Table 1 shows the revenues
generated by advertising for a cross section of U.S. airports.
The range of media described here are just some innovative
and creative approaches to advertising seen at airports today.
Optimize Technologies
art, tourism, history and industry.
Technological innovations also offer opportunities for airport
FIGURE 23 Memphis International Airport--Concession
revenue enhancements.
program redevelopment.
· Touch-screen directories--Touch-screen airport directo-
ries provide passengers with a complete directory and
Terminal Concessionaire Contracts way-finding system. Most systems include a directory of
area hotels, car rentals, restaurants, and shopping, as well
In addition to shorter airline agreements, airport operators are as area maps. Some listings are even linked to a floor plan
taking a more competitive look at retail space as contracts showing the current location as well as a guide to their
begin to expire and retailers aggressively bid for space. desired destination.
Also available are real-time flight information dis-
· Revisit percentage fees--Traditionally, airports have plays, including arrival and departure status and gate
charged percentage rents that were payable on a monthly information. Information can be viewed interactively
or quarterly basis, with an annual reconciliation when with a touch-screen interface. The touch-screens kiosks
total gross sales for the year are known. As the impor- require less space and provide tremendous customer ser-
tance of percentage rent continues to decline, airports (as vices as well as another revenue opportunity.
landlords) are now using other methods to increase value · WiFi applications--Airports that are providing wireless
from tenants when renewing or releasing space. Those Internet service for travelers find that short-term con-
methods include tying rental increases to the Consumer
tracts allow them to assess their needs as technology and
Price Index, implementing fixed-percentage increases, or
the needs of users evolve. Under some agreements, the
aggressively renegotiating leases to raise minimum rents
airport receives a percentage of the user fees (e.g., Des
by 10% or more.
Moines International Airport). Opportunities also exist
· Control minimum annual guarantees--Airports that
to provide wi-fi for free, but also to sell advertising on
identified a fixed-income guarantee in concessionaire
contracts were able to minimize their losses following
the effects of the terrorist attacks of 9-11. Because airport
concessions contracts are bid competitively, operators TABLE 1
often bid more than what they can afford to get the con- ADVERTISING REVENUE AT SELECTED AIRPORTS
tract. Therefore, airport operators may want to consider 2005 Advertising Advertising Revenue per
setting a reasonable minimum annual guarantee, using a Airport Revenue (in $ millions) Enplaned Passenger ($)
Atlanta--ATL 7.8 0.18
percentage for the first year and then reevaluating annu- Chicago--ORD 11.1 0.29
ally based on enplanements. Cincinnati--CVG 1.8 0.16
· Establish point of sale procedures--The drive toward Denver--DEN 4.7 0.22
Detroit--DTW 1.8 0.10
increased cost-effectiveness means maximizing opera- Fort Lauderdale--FLL 1.2 0.11
tions integration and information technology consolida- Houston--IAH 3.0 0.24
tion to minimize retail payment challenges. Las Vegas--LAS 16.3 0.74
Miami--MIA 4.4 0.29
· Monitor pricing and inventory--Incorporating regular Minneapolis--MSP 33.3 0.18
audits into concession contracts allows airports the flex- New York--LGA 9.6 0.74
Philadelphia--PHL 3.4 0.22
ibility to monitor pricing and inventory and ensures
