National Academies Press: OpenBook

Planning for Offsite Airport Terminals (2010)

Chapter: Chapter 3 - Market Determination

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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Suggested Citation:"Chapter 3 - Market Determination." National Academies of Sciences, Engineering, and Medicine. 2010. Planning for Offsite Airport Terminals. Washington, DC: The National Academies Press. doi: 10.17226/14424.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

This chapter presents the steps required to conduct a market analysis for an offsite terminal. In this application, the market analysis focuses on the location and number of potential customers and provides an objective measure for estimating offsite terminal use. Identifying a location con- venient to the largest number of potential customers establishes a standard against which other offsite terminal locations can be measured. As presented in Chapter 2, there are various reasons to develop offsite terminals; analyzing the customer market provides valuable data for a proposed development regardless of the underlying rationale. The following topics are discussed in this chapter: • Information sources, data requirements, and data processing for the market analysis; • How to conduct an offsite terminal market analysis and considerations when using the analysis results; and • A checklist for the offsite terminal market analysis. The procedure described in this chapter is flexible and can be used to analyze various offsite terminal scenarios. For example, it can be used to evaluate the customer market for multiple off- site terminals or the market associated with a specific location. It is based on an understanding of airport ground access customers—those who travel to and from an airport by some form of ground transportation. The information presented in this chapter is based on an analysis of offsite terminals serving Los Angeles International Airport (LAX) and Boston Logan International Airport (BOS) and on the application of market factors from four additional airports: Seattle-Tacoma International Airport (SEA), Denver International Airport (DIA), Phoenix Sky Harbor International Airport (PHX), and Houston George Bush Intercontinental Airport (IAH). LAX and BOS are the only commercial airports in the United States with offsite terminals operated by the airport operator. A complete discussion of the research supporting this chapter is found in the Final Report for ACRP Project 10-02, which is available on the TRB website (trb.org). Data Requirements and Processing The most important information needed to analyze the market for an offsite terminal is the location where potential customers start their trip to the airport. Determining how many cus- tomers originate from individual locations requires an understanding of an airport’s local ground access market. Importing this information into a database that can be used for analysis is accomplished using geographical information system (GIS) software. Although it is possible to conduct an offsite terminal market analysis without the aid of GIS software, it is not recom- 7 C H A P T E R 3 Market Determination

mended since an important part of the analysis is spatial—the geographic relationship between the airport and the origin points for airport customers’ access trips. Airport Customer Segments Market segmentation is used in all facets of research and planning today and helps target a product or service to the group or groups most likely to find it useful. Market segments are important to this analysis because they divide airport users into distinct groups having one or more characteristics in common. Empirical data from existing offsite terminals provides infor- mation about market segments that can then be applied to the analysis of new market areas. In other words, analyzing who uses existing offsite terminals aids in identifying the market for new offsite terminals. Air Passengers The principal user of an offsite terminal is the air passenger, the customer an offsite terminal is designed to serve. Airports serve both origin/destination (O/D) and transferring air passengers while offsite terminals serve only origin/destination air passengers. Origin/destination air passen- gers travel to the airport by some form of ground transportation and can be further divided into two groups: residents who live in the region served by the airport and non-residents who live out- side the local region. Segmenting air passengers into residents and non-residents is important because it reveals two factors that influence air passengers’ decisions to use an offsite terminal: private vehicle availability and origin location type. Collectively, the access mode choices of air passengers and the origin points for their trips to the airport result in patterns of activity that can provide useful information when planning new facilities. Resident air passengers have the following characteristics: • They live within the region. The airport is their home airport. Residents typically have a personal vehicle available for their use. The majority of residents start their trip to the airport from home. • They are familiar with available ground access choices to reach their home airport. • They are the primary customer of the long-term parking supply at the airport since their private automobiles are based in the region. • They are responsible for a significant number of pick-ups/drop-offs by private automobile. Non-resident air passengers have the following characteristics: • They live outside the region. Their home airport is elsewhere. All non-residents start their trip to the airport from somewhere other than their own home—for example, someone else’s home, a hotel, a school, or a place of work. • They are less likely to be familiar with specific ground access choices for the airport they are visiting and are probably only familiar with generic choices such as taxi, door-to-door van, and subway. • Pick-up/drop-off by private automobile is only available if they know someone who lives in the area. • They are responsible for 100% of rental car use. They typically use a rental car for day-to-day travel and for the trip to and from the airport. Airport Employees The second group or segment of potential offsite terminal customers is airport employees. Many major U.S. airports have significant numbers of employees. Distinguishing characteristics are their work schedules, how many days per week they work, and the on airport location of their employment. 8 Planning for Offsite Airport Terminals

Although offsite terminals are planned primarily for use by air passengers, an increasing num- ber of airport employees are also using them. Airport employees should be considered a supple- mental market to be served by the offsite terminal and transportation link when they live in the same area as those in the air passenger market. Employees can be segmented into the following categories: • Airline (flight crew and non-flight crew); • Airport operator; • Full-time and part-time; and • Shift and non-shift workers. • Workers with multiple part-time jobs. As with air passengers, airport employee travel patterns will vary by segment. Information Sources for Airport Customer Segments Air Passengers The principal source of information about air passengers is usually an air passenger survey. An offsite terminal market analysis cannot be completed without reliable and detailed data indicating where air passengers begin their ground access trip to an airport. This statement can- not be overemphasized. Furthermore, the number of records included in the survey sample must be of sufficient quantity to distinguish geographic patterns of air passenger activity. Often, an airport conducts a survey for another purpose such as determining passengers’ satisfaction with various airport services and amenities or to understand the activity associated with peak travel periods. The type of survey used is not relevant as long as the crucial origin data is collected. However, there is a problem if the results from peak-period surveys are used. By definition, these surveys are measures of an extreme period of airport activity and will not be representative of activity patterns for the majority of the year. Therefore, if peak-period surveys are used, the results must be adjusted to represent average patterns of activity at the airport. An important consideration when using air passenger survey data for offsite terminal market analysis is the size of the survey sample. For market analysis, the sample size should provide data for the majority of analysis zones (zip codes or other geographic units) within 30 miles of the air- port for the two major segments of air passengers, residents and non-residents. Based on average annual day enplaning passengers and assuming 50% resident and 50% non-resident air passen- gers, the recommendation is to have a minimum sample size of 25%—that is, if there are 30,000 originating air passengers on an average day, the minimum sample size is 7,500 completed surveys, 3,750 resident and 3,750 non-resident. The basic information that should be collected in an air passenger survey includes • Whether the respondent is a resident or non-resident of the region (the definition of resident is determined locally); • Where the respondent started their local trip to the airport (i.e., zip code, address, or landmark); • The primary purpose of the air travel (i.e., business or non-business); and • The mode of access used to the airport. Only the first two pieces of information are needed to conduct the market analysis; however, trip purpose and access mode data provide additional information that is useful when planning an offsite terminal. Airport Employees An employee travel survey is an excellent source of information about airport employees, but very few airports have conducted this type of survey. In the absence of employee surveys, there Market Determination 9

are ways to estimate the distribution of employee origins in the region. Today, all airports have security badge systems that include most or all airport employees. Aggregating the number of badges by zip code or other geographic unit provides a way to estimate the number and origin locations for airport employees. Then, assuming some proportion of total employees comes to the airport on an average day and applying that percentage to total badges provides an estimate of average day employees. Airport employee home zip codes should be scaled to represent aver- age annual day inbound airport trips. When making the estimation about average daily employee trips to the airport, the analyst should keep in mind that employees are required to staff the air- port during all operating hours, which at many airports is 24 hours per day, 7 days per week, and 365 days per year. Processing Airport Customer Origin Trip Data The discussion of airport customer data will focus on air passengers. The suggested zonal sys- tem for the market analysis is zip codes, although any type of zonal system can be used. Zip code zones provide sufficient detail for conducting a market analysis, and there is a wealth of second- ary data available in the same format. Processing air passenger survey data involves the preparation of a file listing the number of res- ident air passengers by zip code and the number of non-resident air passengers by zip code. In many cases, there will a limited number of non-resident records with zip code information because many non-residents do not know the zip code for their local origin. As discussed in a later section, zip code origins for resident air passengers is the most important information needed for the mar- ket analysis because resident air passengers are the principal customers for offsite terminals. Survey records for resident and non-resident air passengers are scaled to represent average day enplaning air passengers in 2006. Any measure of air passengers can be used to describe the pri- mary market; however, the analysis completed for this project uses average annual day enplaning (AADE) air passengers as the standard metric. To compare analysis results from an individual airport to the benchmarks provided, one must use the same measure of air passengers. If non- resident air passenger and airport employee information is available by zip code, the same pro- cedures apply. Total annual passengers can be easily calculated by doubling average day enplaning air passengers to equal total daily passengers and then multiplying by 365. The scaled air passenger data—resident air passengers by zip code and non-resident air pas- sengers by zip code—should then be linked to a geographic data base so that the information can be displayed spatially on a base map of the region. The base map should include major regional roadways, the location of transit and rail stations, and the zip code zones (or other geographic zones used in the analysis). The product is a zip code–based map file with survey data represent- ing AADE air passengers. Employee trip data, if available, should be factored to represent aver- age annual day inbound airport trips. Table 1 illustrates the steps taken to estimate 2006 AADE resident air passengers. 10 Planning for Offsite Airport Terminals Table 1. Estimation of average annual day enplaning (AADE) resident air passengers. Formula Product Step 1 (2006 O/D air passengers x percent residents) / 365 / 2 2006 AADE resident air passengers Step 3 Link air passenger survey file to map, summarize by zip code, and weight by resident scaling factor 2006 AADE resident air passengers by zip code zone Source: MarketSense Consulting

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. Market Determination 11

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. 12 Planning for Offsite Airport Terminals

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. Market Determination 13 Source: MarketSense Consulting Figure 1. Seattle-Tacoma International Airport anchor nodes.

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. 14 Planning for Offsite Airport Terminals

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. Market Determination 15 Source: MarketSense Consulting Figure 2. Primary and secondary market area for Braintree terminal.

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- 16 Planning for Offsite Airport Terminals Source: MarketSense Consulting Figure 3. Seattle-Tacoma International Airport—primary market.

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 Market Determination 17 1 2 3 4 5 6 Zip code Zip code area (square miles) 2006 AADE resident air passengers Percent of zip code zone in primary market area 2006 AADE resident air passengers in primary market area (col. 3 x col. 4) Area (sq. mi.) of zone in primary market area (col. 2 x col.4) Anchor zone 98005 7.76 72 100% 72 7.76 98004 6.67 151 100% 151 6.67 Zones in primary market area 223 14.43 Primary Market Total AADE Resident Air Passengers Total Square Miles Source: MarketSense Consulting Table 2. Offsite terminal primary market area calculation.

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. 18 Planning for Offsite Airport Terminals Existing Test Cases Suburban Down -town Suburban Down- town Offsite Terminal LAX Van Nuys BOS 4 sites LAX Union Station DIA 3 sites IAH 2 sites PHX 3 sites SEA 3 sites IAH Union Station Offsite terminal or anchor zone distance from airport (miles) 24 14–20 20 25–35 15–30 15 15–20 20 Primary market area size (square miles) 450 310–550 250 300–700 240–275 275–600 200–460 25 AADE resident air passengers 2,300 1,400– 2,160 4,260 1,730– 2,190 1,120– 1,220 1,440– 1,940 1,260– 2,900 1,300 AADE resident air passengers per sq. mi. 5.1 4.0–5.0 17.0 2.5–7.0 4.0–5.0 2.4–7.0 2.7–12.0 50.0 AADE non– resident air passengers 850 980 3,790 NA 400–500 NA 1,100–1,900 2,530 Source: MarketSense Consulting based on air passenger survey data from LAX, BOS, DIA, IAH, PHX, and SEA. Table 3. Offsite terminals primary market area benchmarks.

Other Considerations Moving Away from the Optimal Location The analysis, up to this point, has dealt with hypothetical locations for offsite terminals with- out regard to the reality of the real estate landscape. Although an ideal location for a suburban offsite terminal may have been identified through the analysis, there may not be an available site or facility at the ideal location. For developing an offsite terminal, the objective then becomes one of finding an affordable site that is close to the optimal location. Once a potential site is identified, its characteristics must be compared with the location cri- teria stated previously. Should one or more location criteria not be met, a determination must be made about how much the characteristics of the potential site deviate from the optimal and the likely impact on ridership. A case in point is the Peabody offsite terminal serving Boston Logan International Airport. While the resident air passenger market base is in line with other offsite terminal market areas, the poor access (only in one direction) and the location of the site on a secondary road have resulted in minimal use of the facility. During this process, the project sponsor will also determine whether the properties under con- sideration meet the minimum parcel size requirement as well as any timing requirements due to site preparation, permitting, and rezoning requirements. The minimum parcel size is discussed further in the next chapter. Existing Operators Once the market analysis is complete and offsite terminal locations are identified, it is impor- tant to research the availability of privately operated bus service to the airport with and without offsite terminals. In some cases, there may be existing private operators providing airport access service from one or more of the potential offsite terminal locations or providing service to a por- tion of the potential market area. The operation and performance of these services should be incorporated into the analysis to determine the true market potential of the offsite terminal and transportation link under consideration. If the goal of the project sponsor is to serve unmet HOV demand to the airport, the project sponsor must determine if it makes more sense to provide an offsite terminal and transportation link in a primary market area that is not served by an airport transportation link or in an area that is underserved by a private-sector service. In an underserved area, it may be more cost effective for the project sponsor to collaborate with the private opera- tor on ways to improve its market share instead of introducing a new or competitive service. Checklist for Offsite Terminal Market Analysis The offsite terminal/transportation link will only be successful if it serves a sufficient number of customers, based on the goals defined by the project sponsor. This requires placement in an area that will serve as a collection point for a large number of airport customers with a propen- sity to use such a service. The trip origins of airport users in relation to the location being con- sidered for the offsite terminal and air passenger demographics are the primary determinants of this decision. There are four steps in this analysis: 1. Review the regional roadway network and transit network in the region and select a starting zone for the market analysis, 2. Delineate the primary market, 3. Estimate the number of resident air passengers in the primary market area, and 4. Compare analysis results with market area benchmarks for offsite terminals. Market Determination 19

Step 1: Review the Regional Roadway and Transit Network in the Region and Select an Anchor Node and Zone for the Market Analysis Use the following guidelines when selecting an anchor zone: • Distance of at least 10 to 15 miles from the airport; • In one of the major highway corridors to the airport; • Intersection of two major highways (particularly the intersection of radial and circumferen- tial routes) or a zone on a major highway having a higher concentration of airport trips than surrounding zones; • Proximity to major intermodal centers or regional shopping malls or other major activity center; and • Locate where roadway congestion increases in the direction of the airport. Step 2: Delineate Primary Market Area and Estimate the Number of Resident Air Passengers in the Primary Market Area Develop estimates of AADE resident air passengers by zip code, prepare a regional base map, and select zones in the primary market area using the following guidelines: • Select zones within 5 miles of the anchor zone in the direction toward the airport (along the primary axis); in the direction away from the airport, select zones up to 20 miles away from the anchor zone. • On a second axis, oriented 90 degrees to the primary axis, select zones up to 10 miles from the anchor zone. Consider the roadway network and be aware of the typical travel paths air pas- sengers would take from the selected zone to the airport. • Include zones or portions of zones in the primary market areas if travelers would pass by or through the anchor zone on their trip to the airport. The size of a primary market area is vari- able but usually falls between 200 and 600 square miles (with the exception of a downtown offsite terminal). • For larger zones, portions of which are beyond the primary market, review the local street net- work to estimate the proportion of the zone’s street network within the primary market. Assume the air passenger trips within the primary market are directly proportional to the res- idential street network within the zone under review. Step 3: Estimate the Number of Air Passengers in the Total Market Area The estimation of the market-area passengers is as follows: • Total resident air passenger market = AADE resident air passengers / 0.8; and • Total air passenger market = total resident air passenger / 0.8 or 0.85. Step 4: Compare Analysis Results with Offsite Terminal Primary Market Area Benchmarks To compare analysis results with benchmarks, undertake the following tasks: • Determine the number of AADE resident air passengers in the primary market area; • Calculate the resident air passengers per square mile; and • Compare the results of the analysis with the benchmarks found in Table 3 and use a minimum 1,200 AADE resident air passengers (approximately 900,000 annual resident air passengers) as a primary market area supportive of an offsite terminal based on existing empirical data. 20 Planning for Offsite Airport Terminals

Next: Chapter 4 - Project Definition and Planning »
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TRB’s Airport Cooperative Research Program (ACRP) Report 35: Planning for Offsite Airport Terminals explores issues related to providing originating passengers with remote terminal facilities. The report examines how to identify potential customers for an offsite terminal and how the concept fits into airport planning.

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