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Market Determination 11 Customers of Offsite Terminals in Suburban Locations The existing offsite terminals for which empirical data is available are found in highway based suburban locations. By necessity, the description of the market analysis in this chapter will rely heav- ily on the characteristics of the suburban type. Suburban offsite terminals are primarily used by res- ident air passengers. Many non-resident air passengers, if not visiting friends or family in suburban locations, are destined for areas focusing on business and pleasure activities, which tend to be con- centrated in specific areas of the region (e.g., downtown or tourist attractions). Most resident air passengers begin their trip to the airport from home, making them ideal customers for conveniently located suburban offsite terminals. Customers of Offsite Terminals in Downtown Locations Currently, there is only one offsite terminal at a downtown location with nonstop express trans- portation to the airport--the Union Station FlyAway serving Los Angeles International Airport. It is located at an intermodal facility having local, regional, and long-distance public transporta- tion access. The airport is located 20 miles away and prior to the introduction of the Union Station FlyAway, there was no direct access from the terminal to the airport except by taxi. The Union Station offsite terminal has been in existence for less than 2 years, so minimal data about customer segments is available. Early indications from Union Station suggest that down- town offsite terminals will differ from suburban offsite terminals in the way customers access them and the proportional use by resident and non-resident market segments. Although resident air passengers appear to be the primary market segment using the downtown offsite terminal, there is a higher proportion of non-resident air passengers using them compared with their use of sub- urban offsite terminals. Offsite Terminal Market Analysis The typical offsite terminal in the United States is the suburban terminal. This is the proto- type for which most of the historical data is available. As previously mentioned, the downtown offsite terminal is emerging as a second type of facility for which much less information is avail- able. Conceptually, the location and market principles described in the following sections apply to either type of facility; however, in practice, the suburban facility is tied to the road network and the downtown facility is tied to the public transportation network, resulting in significant differences in the way each type of terminal is accessed. Step 1: Review the Regional Roadway and Transit Network for Offsite Terminal Locations and Select an Anchor Node and Zone for the Market Analysis Identify Potential Offsite Terminal Locations on the Transportation Network The first task uses a large scale view of the transportation infrastructure of the region to eval- uate the primary travel paths to the airport. It is important to consider the regional roadway net- work and the location of the airport within the network. The objective of the following guide- lines is to identify locations for offsite terminals that would serve the major regional highway corridors in the region without overlap in their coverage. Distance from the Airport: Identify Points on the Roadway Network at Least 10 to 15 Miles from the Airport. Existing offsite terminals are typically located at a minimum distance of 10 to 15 miles from the airport, or at least 30 minutes driving time, to optimize potential ridership.

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12 Planning for Offsite Airport Terminals The purpose of ascribing a minimum distance from the airport reflects the willingness of trav- elers to stop somewhere along their customary travel path to the airport and transfer to another mode. At points close to the airport, the majority of the airport access trip has been completed for airport users who have traveled significant distances and, therefore, there is less perceived convenience and/or time savings for the traveler to change modes. The potential customer will weigh the time it takes to exit the highway, park at the terminal, and wait for the next departing bus to the time it takes to continue directly to the airport in a private automo- bile or taxi. At closer distances to the airport, an offsite terminal may not be viable without a high concentration of air passenger origins in proximity to the offsite terminal. Furthermore, if the offsite terminal is too close to the airport, it will compete with off-airport parking facil- ities that typically offer frequent complimentary shuttle service (the shuttle price is built into the daily parking fee). Directness of Path: Identify Major Highway Corridors Where Airport Access Routes Are Crossed by Other Major Highways. A location accessible from more than one highway cor- ridor will attract more air passengers than a location with poor accessibility. Few air passen- gers will backtrack or divert from their normal travel path to reach an offsite terminal. Air pas- sengers and airport employees are potential customers for an offsite terminal if it is located somewhere along the typical route they use to reach the airport. When the offsite terminal is located along the airport user's typical route to the airport, it is perceived to be a stop along the same route the customer would have taken to the airport rather than a detour. For a ter- minal that offers good intermodal connections, some air passengers and airport employees who want to avoid driving or taking a taxi to the airport may be willing to take public trans- portation to and from the offsite terminal even if it requires backtracking or sacrificing direct- ness of path. The directness of path guideline also applies to automobile access to terminals with intermodal connectivity. Relationship to the Regional Transportation Network: Proximity of Offsite Terminal to Roadway and/or Transit Networks. The location of an offsite terminal within a regional trans- portation corridor is crucial to its success. For a suburban terminal, it must be close to one major regional highway or freeway, or the intersection of two major highways, so that the roadway net- work can channel airport-bound traffic toward the facility. In particular, intersecting radial and circumferential highways or the intersection of any two major routes are desirable locations for offsite terminals. The combination of proximity to the transportation network and a location at a distance of 10 to 15 miles from the airport ensures good access for customers from greater dis- tances in addition to those who are close by. The suburban offsite terminal should be at a location that offers good access from the regional road network, ideally not more than a 5-minute drive from the on and off ramps of a major regional access route. In some cases, a less than optimal location will be perceived as being read- ily accessible if it is visible from the major regional route used to reach the site. It is preferable to locate the offsite terminal at a transition point between a relatively non-congested route and a congested route to the airport. If the route to the airport also offers a high-occupancy-vehicle (HOV) lane, customers will realize additional time savings compared with driving to the airport alone. A downtown offsite terminal must have excellent connections to regional and long-distance rail and bus services and be accessible by automobile and taxi. Proximity to Regional Activity Centers. An offsite terminal located near a significant regional facility will benefit from its exposure to traffic generated by that facility. A major regional shop- ping center of at least 500,000 square feet or an entertainment complex is optimally positioned for maximum visibility and accessibility by large numbers of potential customers. This applies to both suburban and downtown terminals.

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Market Determination 13 Selecting an Anchor Node and Zone for the Market Analysis The anchor node is used to represent the location for an offsite terminal and serves as the focal point of the analysis. It is then referenced by the zip code zone in which it is found. If the anchor node is on the boundary of two or more zones, select the smallest or closest zone to the anchor node. Generally there are two types of locations to consider when applying the guidelines out- lined in the previous section: 1. At an important junction of two highways, the anchor node/zone is the one where the two roads intersect. 2. Along a major airport access route without an intersecting highway. In this case, once the gen- eral area for an anchor node has been identified, one zone is selected because it has a higher concentration of airport trips than surrounding zones or it has some regionally significant attraction. The map of the Seattle region in Figure 1 illustrates the selection of anchor nodes for Seattle- Tacoma International Airport (Sea-Tac). This example does not cover the entire Seattle region where additional anchor nodes may be found. Not all guidelines can be followed when selecting a particular location. The analyst will need to use good judgment when applying the guidelines, taking into account the geography of the region, the roadway network, and the airport under consideration. Once a zone representing each anchor node has been selected, it should be highlighted on the regional base map for use in the next step. Source: MarketSense Consulting Figure 1. Seattle-Tacoma International Airport anchor nodes.

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14 Planning for Offsite Airport Terminals Step 2: Delineate Primary Market Area and Estimate the Number of Resident Air Passengers in the Primary Market Area In this step of the analysis, the market area associated with the anchor zone is identified. The analyst builds the market area based on the anchor zone(s) from the first step and selects zip code zones or partial zones to include in the market area. The results of this step should be reviewed by someone familiar with regional travel routes to the airport. This is necessary to ensure the market area includes only those zones where it is reasonable to assume a traveler would find the anchor zone a reasonable stop on the way to the airport. The concept of a primary market area is used in this analysis. The number of air passengers in the primary market area is one of the critical factors to consider when evaluating the develop- ment of an offsite terminal at a specific location. Defining a primary market area requires a map or GIS software. This provides the analyst with a visualization of the regional roadway network, intermodal centers and stations, and the local street network superimposed on the boundaries of the zip code zones. The shape of a primary market area will vary considerably depending upon the configuration of the roadway network. Definition of Primary Market Area A primary market area refers to a geographic area encompassing the origin zones (starting points) for customer trips to the airport. It is an area responsible for 70% to 85% of all customers attracted to a specific location. The remaining 15% to 30% of customers come from a much larger geographic area called the "secondary market." In the context of offsite terminals, a pri- mary market is the geographic area from which the majority of offsite terminal customers begin their ground access trip to the airport. It is the logical core area that can be served by the offsite ter- minal and does not include fringe areas where there is less certainty of a customer base. Figure 2 illustrates the geographic relationship between the primary and secondary market area for an offsite terminal serving BOS. It is unlikely that any analyst, regardless of their familiarity with the region under considera- tion, could identify all the zip codes where air passengers might start their trip to a new offsite ter- minal. However, defining a primary market for an offsite terminal is achievable. More impor- tantly, empirical data has shown that the concept is useful in describing the ground access patterns of customers using large U.S. airports. It is a way of providing a "geographic normalization" for studying market areas at different airports. Offsite Terminals at Suburban Locations It is not possible to provide a comprehensive list of criteria applicable to all geographic regions served by commercial U.S. airports. To illustrate some primary market characteristics applied to an actual airport, the area served by Sea-Tac is used as an example and shown in Figure 3. Direc- tions are given for defining a primary market, using the map of Seattle as a reference. Note that the entire market area for SeaTac is not being used in this example, only a portion to the north and east of the airport. Directions for Defining a Primary Market. To define a primary market using the map of Seattle as a reference, use the following 3 steps: First, draw a straight line connecting the airport to the anchor node previously selected. This is the primary axis. Select zones for the market area within 5 miles of the anchor zone in the direction toward the airport (along the primary axis) and approximately 20 miles from the anchor zone along the major access routes in the direction away from the airport. Air passengers will not travel backward, in the opposite direction from the airport, for more than a few miles. This is verified by reviewing the market areas for existing offsite terminals.

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Market Determination 15 Source: MarketSense Consulting Figure 2. Primary and secondary market area for Braintree terminal. The distance air passengers will travel to the offsite terminal (in the primary market area) is not more than 30 miles based on empirical evidence. Air passengers will, however, travel much greater distances from areas in the secondary market area. Next, on a second axis that is oriented 90 degrees to the primary axis, select zones up to 10 miles away. The selected location must fall along the typical travel path from the zip code to the airport. If a zip code is large or encompasses an area that is only partially convenient to the selected location, the analyst can overlay a detailed street network. This will indicate the more developed areas and help the analyst estimate what proportion of the zip code would access the offsite terminal location. In the Seattle example, zones along I-90 are selected up to 10 miles away. Zones further than this distance have alternative access routes to the airport and are not part of the primary market area. Finally, include zones or portions of zones in the primary market area if travelers would pass by or through the anchor zone on their trip to the airport. The size of primary market areas is variable but usually falls between 200 and 600 square miles. In larger zones, where part of the zone is beyond the primary market, review the local street network to estimate the res- idential development that is within the primary market. Assume the air passenger trips within the primary market are directly proportional to the residential street network within the zone under review.

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16 Planning for Offsite Airport Terminals Source: MarketSense Consulting Figure 3. Seattle-Tacoma International Airport--primary market. After selecting the zip code zones to be included in the primary market area, the number of resident air passengers and the land area of each zone are compiled in a table such as the one shown in Table 2. Table 2 illustrates the critical data needed for this step of the analysis: the selected zip code zones, the land area of each zone, and the percent of the zip code zone within the primary market area. If airport employee and non-resident air passenger data is available by zip code, it should be added to the table by zip code zone. Offsite Terminals at Downtown Transit/Rail/Intermodal Centers The guidelines for determining the primary market for an offsite terminal at a downtown intermodal center are more general because of the lack of information about this emerging type of offsite terminal. Similar principles of access and location apply, but because the principal access to the terminal uses a transportation network composed of intermittent stops along fixed routes all converging at a downtown intermodal center, the primary market area is determined differently. It consists of a series of small areas around the access points to the transportation sys- tem and the immediate area around the downtown intermodal center. Access to the transit network at each supporting station must be examined to determine whether it is logical for air passengers to reach the airport by first traveling via transit or rail to the downtown offsite terminal and then transferring to the airport transportation link. The via-

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Market Determination 17 Table 2. Offsite terminal primary market area calculation. 1 2 3 4 5 6 Zip code Percent of 2006 AADE resident Area (sq. mi.) of 2006 AADE Zip area zip code zone air passengers in zone in primary resident air code (square in primary primary market area market area passengers miles) market area (col. 3 x col. 4) (col. 2 x col.4) Anchor 98005 7.76 72 100% 72 7.76 zone 98004 6.67 151 100% 151 6.67 Zones in primary market area 223 14.43 Primary Market Total AADE Total Square Resident Air Miles Passengers Source: MarketSense Consulting bility of a downtown intermodal location is determined by the geographic relationship of the air- port, the intermodal station, and the start of air passenger trips to the airport. Step 3: Compare Analysis Results to Offsite Terminal Primary Market Area Benchmarks The research conducted for ACRP Project 10-02 used market data from existing offsite termi- nals in suburban locations at LAX and BOS to develop the analysis procedure that was then tested at four additional airports. The results for each test case airport market analysis were then veri- fied and discussed with the respective airport operator. Table 3 provides primary market bench- marks developed from the offsite terminal analysis conducted for the six airports. The majority of examples in Table 3 are suburban offsite terminals. There are two down- town intermodal terminals included in the table, Union Station in downtown Los Angeles and a test case scenario in downtown Houston (there are proposals to transform Union Station in downtown Houston into a multimodal transportation center). Nine out of the sixteen subur- ban examples have average densities of 4.0 to 5.0 resident air passengers per square mile in their respective primary market areas. The two downtown examples have densities much higher than those of the suburban examples as well as significant numbers of non-resident air passengers. Although there is considerable variation in the primary market areas for the six airports, there are some thresholds that apply. Only one airport has a primary market area with less than 1,200 AADE resident air passengers. All the other airports have resident air passengers above this threshold in their primary market. All but one of the examples has a primary market between 200 and 600 square miles, and the distance from the airport for all examples is between 14 and 35 miles, including the downtown intermodal examples. Step 4: Estimate the Number of Air Passengers in the Total Market Area The total air passenger market can be estimated using empirical data about the proportional relationship between primary and total market areas of existing suburban offsite terminals. Res- ident air passengers account for 80% to 85% of all air passengers originating in the primary mar- ket area and subsequently using the connecting transportation link between the offsite terminal

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18 Planning for Offsite Airport Terminals Table 3. Offsite terminals primary market area benchmarks. Existing Test Cases Down - Down- Suburban Suburban town town LAX LAX IAH BOS DIA IAH PHX SEA Offsite Terminal Van Union Union 4 sites 3 sites 2 sites 3 sites 3 sites Nuys Station Station Offsite terminal or anchor zone 24 1420 20 2535 1530 15 1520 20 distance from airport (miles) Primary market area size (square 450 310550 250 300700 240275 275600 200460 25 miles) AADE resident air 1,400 1,730 1,120 1,440 1,260 2,300 4,260 1,300 passengers 2,160 2,190 1,220 1,940 2,900 AADE resident air passengers per 5.1 4.05.0 17.0 2.57.0 4.05.0 2.47.0 2.712.0 50.0 sq. mi. AADE non 1,100 resident air 850 980 3,790 NA 400500 NA 2,530 1,900 passengers Source: MarketSense Consulting based on air passenger survey data from LAX, BOS, DIA, IAH, PHX, and SEA. and the airport. In addition, empirical data indicates that the number of air passengers in the primary market represents approximately 80% of the air passengers in the total market area. The ratio of primary market to total market is typically 80%; however, there can be market configu- rations where the distribution of an airport's customers results in a somewhat different ratio of as low as 70% or as high as 85%. The total air passenger market for an offsite terminal can be estimated by factoring resident air passengers to total air passengers in the primary market and then factoring the primary mar- ket up to the total market. First, AADE resident air passengers are divided by 0.8 or .85 to estimate total air passengers (residents and non-residents) in the primary market. Next, air passengers in the primary market are divided by 0.8 to estimate the total air passenger market for an offsite ter- minal. These ratios do not apply to downtown offsite terminals because of the different config- uration of their markets. No rules of thumb are available for downtown terminals, but Step 2 described some general guidelines for estimating the passenger base according to the number and type of intermodal linkages to the terminal. Offsite Terminal Market Share There are only a few examples of offsite terminals in operation today (Los Angeles International and Logan International Airports) where the airport operator sponsors the offsite terminals. Each conducts customer surveys and also maintains counts by ridership category for the transporta- tion link. In addition, these airports conduct large-scale surveys of air passengers on a regular basis. Using the three sources of information it is possible to estimate the air passenger market share for the offsite terminals. In the primary market, the proportion of resident travelers using the offsite terminals ranges from 15% to 30% and the proportion of non-resident travelers ranges from 5% to 15%. The market share estimates from the Boston and Los Angeles regions can be used to estimate market share for new services.