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24 Guidebook for Developing and Managing Airport Contracts
2.4 Specialty Retail/News and Gifts
Additional Issues for specialty retail/news and gift concessions include the following:
· Definition of product categories
· Carts and kiosks
2.4.1 Definition of Product Categories
As concessionaires have continued to add more brand names to their portfolios, they have
increasingly been able to offer not just specialty retail brands, but branded merchandise in the gift
sections of newsstands. This makes classifying certain products a challenge. "Gifts" typically bring
different percentage rents than "Specialty Retail." Airports are encouraged to be specific in describ-
ing which product categories are expected in which locations (the RFP process should reflect these
desires).
2.4.2 Carts and Kiosks
Many airports supplement their retail offerings through product carts where there is insufficient
space or passenger exposure to support a full retail unit. Product carts are also sometimes used to
sell individual specialty products (e.g., Rosetta Stone language software). Some airports are begin-
ning to offer electronic vending kiosks selling electronics, cosmetics, and even over-the-counter
medical supplies. Concession agreements for carts and kiosks typically have a shorter term, reflect-
ing the reduced investment and different rental structures to reflect the margins. Similarly, conces-
sion agreements for these types of operations typically will need provisions for flexibility in
changing out product mix with airport approval in order to adjust to changing market preferences.
2.5 Passenger Services
Airports offer various passenger services. Historically, such services were limited to shoe shine
stands and business centers, but now these services range from battery-charging stations and
massage stations to full-service spas and pharmacies and medical centers.
These services typically carry a different range of rental levels and may have either only percent-
age rents or a fixed rental amount, depending on the service and the level of investment required.
2.6 Parking
Additional issues for parking concessions include the following:
· Management responsibilities
· Revenue control procedures
· Additional services
2.6.1 Management Responsibilities
As with all airport functions involving direct contact between contractors and customers, great
care must be taken to ensure that the governing contract language explicitly states the requirements
of the contractor in all facets of the operation. For parking managers, various functions and ser-
vices are often required or contemplated that may not be directly related to vehicle parking. It is
especially important to call out such functions in contract language.
