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This chapter outlines the steps required to prepare the spatial elements of the concession plan, considering the passenger profiles discussed in the previous chapter, and covers the following topics: â¢ Space planning â¢ Supportable concession units based on traffic levels â¢ Sizing of concession units â¢ Location criteria â¢ Adjacencies â¢ International terminals â¢ Wayfinding and concession signage â¢ Return on airport investments in concession space 5.1 Space Planning Concession space planning is a critical task in terminal program development. As airport operators have realized that excellent concession programs not only increase revenues, but are also closely related to passenger satisfaction with the overall airport experience, concession space planning has become an integral part of the terminal design process. In developing concession space plans and concession locations, the airport operatorâs goals are typically the following: â¢ Optimize concession revenues â¢ Increase customer penetration rates (the percentage of passengers and visitors using a conces- sion) and average transaction levels (the average amount spent per transaction) â¢ Provide a wide variety of concessions with a broad selection of services and product choices â¢ Create interesting and entertaining concession choices for the customer â¢ Integrate food and beverage with retail to create synergy and encourage spending across categories â¢ Allocate as much concession space as can be financially supported during the design life of the terminal â¢ Promote open-sell rather than over-the-counter sales to promote spontaneous purchases â¢ Establish a strong commercial image and identity As the airport concession industry has matured, a structured approach to planning has evolved. Although industry consultants recommend a structured approach, 67% of airport oper- ators surveyed indicated that they use a concession space planning metric or standard. About 60% indicated that they had adopted planning standards for concession support space. 52 C H A P T E R 5 Developing the Concession Space Plan
Although minor variations exist, the general approach to concession planning at airports is common throughout the industry, involving considerations of traffic volumes, customer characteristics, location of customers in the terminal, amounts they can be expected to spend, and anticipated sales per square foot and per enplaned passenger. The key objective in a struc- tured approach is to determine the supportable concession space in each area of the terminal. Supportable space is the amount of concession space that is financially viable for both the air- port operator and the concessionaire. It is determined for the planning year by estimating concession sales at reasonable levels of productivity using sales per square foot. The methodology of concession space planning as described in this chapter is illustrated con- ceptually in Figure 5-1. Each element of the structured approach to concession space planning is examined in the sections that follow. 5.1.1 Supportable Concession Space There is strong correlation between the amount of concession space at an airport and cus- tomer spend rates. Figure 5-2 presents a scatter diagram showing the strong correlation between space and spend rates for a number of large and medium hub airports, using concession space per 1,000 enplaned passengers on one axis and the combined food and beverage and retail spend rates on the other axis. The concession-space-to-passenger-spend-rate ratios shown in Figure 5-2 are quantitative, and do not reflect qualitative characteristics of the space or the passengers using these termi- nals. Unlike other characteristics of a concession program, such as the tenant mix, the amount of concession space to be provided is an investment decision with long-term implications, especially for new or refurbished terminals, where the cost of providing more concession space or reconfiguring existing terminal space to increase concession space allocations may be pro- hibitively expensive. Developing the Concession Space Plan 53 Source: LeighFisher. Goals Where will the customers be? Forecasts How many customers? Who will they be? Comparables and market research How much spending? How productive? Supportable space Concession program Locations, themes Space by zone Figure 5-1. Concession planning methodology flow chart.
5.1.2 The Customers Passengers are the core customers for concessions. Within the passenger category of cus- tomers, however, there are subdivisions with very different characteristicsâoriginating, termi- nating, connecting, international, and domestic. As described in Chapter 4, passenger spends vary by passenger characteristics, including the following: â¢ Passenger residence and nationality. Nonresidents typically spend more at an airport than residents. As nonresidents include tourists, these travelers are more likely to purchase local souvenirs and gifts, generating greater sales volumes for the retail program. Certain national- ities also spend more than others. â¢ Originating passengers. Originating passengers typically spend more time in the terminal than connecting or terminating passengers and tend to spend more. â¢ Dwell time. International passengers typically spend more time in the terminal than domes- tic passengers and spend more money on both food and retail. â¢ Trip length. Long-haul passengers typically travel in a relaxed and leisurely vacation mode. They tend to be away from home longer and therefore are more likely to make purchases for family and friends. Long-haul travelers usually spend considerable time in the terminal, cre- ating enhanced opportunities to frequent retail shops and restaurants. â¢ Leisure travelers. Leisure travelers, compared to business travelers, prefer to arrive earlier at the airport; these passengers often represent the largest category of souvenir and gift buyers at the airport. They are more price sensitive and value oriented than business travelers. â¢ Business travelers. Business travelers tend to spend less time at airports and less time shop- ping. They are good customers for convenience retail (newspapers, magazines) and for food and beverage services, including alcoholic beverages and higher-quality restaurants. Business passengers, often traveling on expense accounts, are less price sensitive and more service ori- ented than leisure travelers. Business passengers may also be good customers for so-called âguilt giftsâ for spouses and children. â¢ Frequent flyers. Generally, the more frequently passengers travel, the less time they are likely to spend in the terminal building, and their propensity to spend is lower. 54 Resource Manual for Airport In-Terminal Concessions - 2.0 4.0 6.0 8.0 10.0 12.0 14.0 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 $11.00 $12.00 Passenger spend rate - food and beverage and retail (excluding duty free) Co nc es si on s pa ce p er 1 ,0 00 e np la ne d pa ss en ge rs Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009). Figure 5-2. Relationship between concession space and salesâ2008.
â¢ LCC passengers. Passengers on LCCs often spend as much or more than passengers on legacy airlines. Airport surveys indicate that LCC passengers do not necessarily spend less than legacy airline passengers in duty free and specialty retail units and are likely to spend more on food and beverages. â¢ Spend per enplaned passenger. Of the airport operators surveyed, 81% reported that they use the spend per enplaned passenger metric for planning and for evaluating concession perfor- mance (100% of concessionaires indicated this as well). 5.1.3 Passenger and Other Customer Group Spend Rates Figure 5-3 summarizes the average food and retail passenger spend rates by hub size at 93 air- ports for which data are provided to Airport Revenue News. For both food and retail, there is a pattern of increased spending with increased airport size. The factors behind this pattern include more supportable offerings as traffic grows (more choices in food and retail) and increased numbers of long-haul travelers in the mix at larger airports. There are large variations in spend per enplaned passenger from airport to airport, even within each hub category. Table 5-1 summarizes the average spend and the 95th percentile upper limit (two standard deviations) by concession category and airport size. Airports that generate sales above two standard deviations from the mean are likely to have exceptional characteristics that make for an unreasonable comparison. For example, in 2008, Pittsburgh International Airport produced the nationâs highest specialty retail spend rate of $6.49, twice that of the next highest performing airport, due to a combination of factors that included terminal configuration, con- centrated passenger flows, and the expertise and contracting flexibility of a third-party devel- oper. In categories other than specialty retail, however, the airportâs performance was within two standard deviations and would be reasonable for comparison. Developing the Concession Space Plan 55 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 Large Hub Medium Hub Small Hub Non Hub Airport Category Sp en d Pe r En pl an ed P as se ng er Food Retail Total Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009). Figure 5-3. Average food and retail concession spending per enplaned passenger by airport categoryâ2008.
As Table 5-1 shows, the variation in spending per enplaned passenger within each airport size category is smallest (as a percentage) for food. Specialty retail shows high variations from airport to airport, which is to be expected as some older terminals have very limited airside retail pro- grams, and the terminal configurations preclude easy expansion. In addition to passengers, there are other customer groups at the airport, including those who accompany passengers to the airport or meet them there and airport and airline employees. Each of these customer groups has access to different parts of the terminal and has different spending characteristics. Well-wishers and meeters/greeters accompany travelers to the airport to see them off or arrive to pick them up. More specifically, well-wishers are nonpassengers accompanying departing pas- sengers into the terminal. Meeters and greeters are nonpassengers meeting and greeting arriv- ing passengers and accompanying them in the terminal. The numbers of well-wishers and meeters/greeters vary widely from airport to airport. Typically, the ratio of well-wishers and meeters/greeters to passengers has declined over time, as flying has become more commonplace. Currently, these ratios are often in the range of 0.2:1 but can vary widely. There can be large vari- ations from airport to airport in the ratio of well-wishers accompanying passengers to airports and meeters and greeters visiting the airport to meet an arriving passenger. International termi- nals typically have higher meeter/greeter and well-wisher ratios than domestic terminals. Airport, airline, and other terminal employees use the concessions. Each airline operating from the terminal has its own set of employees, including check-in and ticket agents and cabin and cockpit crews. In addition, ground-handling, Immigration and Customs, and security staff are key components of the terminalâs employees. These airline and airport employees represent a significant potential target market for airport retailers, particularly for the outlets that are eas- ily accessible pre-security. Airports with street pricing or employee discounts and branded food court units generate higher employee spend rates. Estimating average spend per employee can be difficult. Often the numbers of daily average airline/airport employees in the terminal are not well known. Nonetheless, estimating this number is better than ignoring it. Employees can account for a significant percentage of food court sales at many airports. Although spend per enplaned passenger is used as the yardstick, this unit number obviously varies by the type of customer, with arriving passengers, well-wishers, meeters and greeters, and employees typically spending far less than enplaning passengers. Customer surveys at a number of airports have indicated that the spending of enplaning passengers exceeds that of all other types of terminal users by a wide margin. Table 5-2 illustrates the typical spending of these groups as a 56 Resource Manual for Airport In-Terminal Concessions Table 5-1. Average and upper 95th percentile range of concession spending per enplaned passenger by airport size categoryâ2008. Average 95% Average 95% Average 95% Food and beverage $3.49 $5.37 $4.50 $5.97 $5.34 $7.39 Convenience retail $2.17 $3.65 $1.95 $3.24 $1.88 $3.06 Specialty retail $0.27 $1.03 $1.21 $3.87 $1.71 $4.20 Total retail $2.42 $3.90 $3.15 $7.11 $3.53 $6.20 Total food and beverage and retail $5.92 $8.46 $7.66 $11.29 $8.87 $12.79 Duty free $0.00 $0.00 $4.98 $16.66 $7.05 $16.29 Small Hub Medium Hub Large HubCategory Note: At the 95% percentile passenger spend rates are independent. Performance in each category is independent of performance in other categories. Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009).
percentage of the spending of originating/enplaning passengers (in other words, each customer category is presented as a percentage of the spending of enplaning/originating passengers). Note that the average spend per enplaning passenger is the sum of spending by all customer categories divided by the total number of enplaning passengers at the airport. Therefore, the overall average spend rate per enplaning passenger may be higher or lower than the average spend rate per for only originating/enplaning passengers when connecting passenger spending and non-passenger spending by meeters and greeters, well-wishers, and employees is taken into account. One additional factor in determining spend per enplaning passenger is the performance of the existing concession program. A concession program that is too small, contributing to crowding in restaurants and shops, or a program that does not meet customer needs will have a lower spend per enplaning passenger than a successful program. 5.1.4 Space per 1,000 Enplaned Passengers Space per 1,000 enplaned passengers is a standard metric used for comparing concession space within and between airports. Figure 5-4 shows the average space per 1,000 enplaned passengers for a range of enplaned passenger levels. Figure 5-4 also shows the reported space in square feet for each major concession category. The ratio of concession space to enplaned passengers gen- erally falls as passenger traffic volumes increase. Figure 5-5 shows the data provided in Figure 5-4 expressed as a percent of the total available space for airports within the same ranges of enplaned passengers. As passenger levels increase, the share of total space devoted to convenience retail decreases, while the share of space devoted to specialty retail increases. The share of total space devoted to food and beverage is fairly constant, except for airports with numbers of annual enplaned passengers lower than one million, where the share of space devoted to food and beverage increases to nearly 75% of all concession space. An important step in determining the amount of supportable space is forecasting spend rates per enplaned passenger by concession categoryâfood/beverage, convenience retail, specialty retail, and duty free. These spend rates are typically forecast using the following: â¢ Customer surveys (passengers, employees, well-wishers, and meeters and greeters) on current spending habits, desires, dwell times, etc. â¢ The performance of existing concession units in terms of spend rates per enplaned passenger and sales per square foot â¢ The performance of concessions at airports with terminals of similar size and passenger mix â¢ The concession plannersâ experience in achieving increases in spending rates at other airports Developing the Concession Space Plan 57 Table 5-2. Range of per person spend rates of customer groups as a percentage of spend rates per originating/enplaning passenger. Customer Category Food Retail Originating Enplaning Passengers 100% 100% Deplaning Destination Passengers 0%â5% 0%â5% Connecting Passengers 40%â60% 40%â60% Well-wishers/Meeters and Greeters 30%â40% 30%â40% Employees 10%â20% 5%â10% Employee spend is the average per employee workday. Source: LeighFisher from airport customer surveys.
58 Resource Manual for Airport In-Terminal Concessions 10.6 7.9 7.9 6.8 5.6 6.5 4.4 6.0 4.2 0.4 1.1 2.1 1.8 2.2 2.0 1.6 1.4 1.7 3.7 3.4 2.0 1.8 1.8 1.8 1.2 1.5 1.0 0 2 4 6 8 10 12 14 16 Under 1 million 1 to 2 million 2 to 3 million 3 to 4 million 4 to 5 million 5 to 7 million 8 to 10 million 10 to 12 million More than 15 million Range of annual passenger enplanements Sq ua re fe e t o f c o n ce ss io n s pa ce p er 1 ,0 00 a n n u a l e n pl a n e d pa ss e n ge rs Specialty retail Convenience retail Food and beverage Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009). Figure 5-4. Space per 1,000 enplaned passengers by major concession categoryâ2008. 61% 68% 62% 63% 59% 66% 66% 64% 73% 24% 15% 22% 19% 23% 17% 17% 9% 2% 15% 17% 16% 18% 18% 17% 17% 28% 25% 0% 25% 50% 75% 100% More than 15 million 10 to 12 million 8 to 10 million 5 to 7 million 4 to 5 million 3 to 4 million 2 to 3 million 1 to 2 million Under 1 million Range of annual passenger enplanements Pe rc e n t o f t ot al fo o d a n d be ve ra ge a n d re ta il sp ac e Food and Beverage Specialty Retail Convenience Retail Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009). Figure 5-5. Percentage of space by major concession categoryâ2008.
5.1.5 Productivity per Square Foot The productivity, or spend, per square foot is a planning number required to determine sup- portable space. The productivity factor is the sales per square foot for each concession category that would provide a reasonable return for both the airport operator and the concessionaire. A number that is too low will result in too much space. It is important to select a productivity num- ber that will result in a suitably sized concession program in the planning year. A number that is too high will result in space requirements that are understated. Of airport operators and conces- sionaires surveyed for this research project, 70% and 71%, respectively, indicated that they mon- itor sales per square foot. As concessions become heavily used, they lose sales at some point because customers see that the units are congested. Many passengers will not wait in line to make a purchase, particularly if it is a discretionary purchase. The specific productivity planning number selected for an airport concession program will be a function of the following: â¢ Airport size. Large hub airports will tend to have higher productivity numbers than smaller airports. The operators of smaller airports tend to make decisions to have a reasonably sized food and news/gift program that may result in low productivity. â¢ Peaks in passenger traffic. At airports with high daily peaks relative to total daily traffic, low productivity numbers should be used for planning purposes to avoid overcrowding and lost sales during peaks. â¢ The ability to provide space. For some renovations of existing terminals, airport operators need to use high productivity numbers for planning purposes, simply because insufficient space exists to allow the use of lower numbers. Figure 5-6 illustrates the average productivity levels per square foot for food and retail for each airport size category. Average or current productivity may not be appropriate for use in deter- mining supportable space, as many terminals are undersized relative to current demand. Developing the Concession Space Plan 59 $114 $453 $821 $1,271 $285 $651 $976 $1,329 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Non Hub Small Hub Medium Hub Large Hub Airport Category Av er ag e Sa le s Pr od uc tiv ity p er S qu ar e Fo ot Food and beverage Retail Source: Airport Revenue News 2009. Figure 5-6. Average food and retail productivity by hub sizeâ2008.
The increase in productivity with airport size is not a factor that has been well discussed in the industry. Using a productivity factor appropriate for a small hub airport at a large hub airport would not account for the high labor and operating costs and higher investment requirements at large hub airports. Conversely, use of high productivity numbers appropriate for large hub airports at smaller airports can result in programs that may be undersized, inefficient, and less productive. Table 5-3 presents a summary of the range of productivity numbers recommended for use in planning. The high end of the ranges should be used if the terminal is space constrained. In some cases, a terminal may be incapable of providing the optimal amount of concession space indi- cated by the supportable space analysis. The lower end of the ranges is recommended for new terminals where flexibility is desired. In selecting a productivity number for planning at smaller airports, some flexibility is required. For example, a calculation of forecast sales per square foot for a specialty operation at a small hub airport when combined with a typical productivity number may yield a shop that is unrea- sonably small. The planner needs to consider either eliminating the shop entirely and including a retail merchandising unit (cart) instead, or using a lower, yet still reasonable, productivity number to arrive at a shop footprint that makes sense. One element that may cause confusion is that the productivity number used for planning may be lower than the current productivity at the airport. High sales per square foot do not, in them- selves, indicate a successful concession program. As sales per square foot increase to a level well beyond recommended levels, spend rates per enplaned passenger and total concession sales will be lower than they could be with sufficient space as sales may be lost during peak or busy peri- ods. Figure 5-7 illustrates this point conceptually. Table 5-4 shows the five large hub airports with the highest sales per square foot among the 25 large hub airports for which data were submitted for the Airport Revenue News Fact Book 2009 (Airport Revenue News 2009). The airport with the highest sales per square foot, Chicago OâHare International Airport, ranked 16th overall in passenger spend rate. Hartsfield-Jackson Atlanta International Airport ranked 3rd in sales per square foot, but 22nd out of the top 25 air- ports reporting data in sales per enplaned passenger. Both airports are among the most chal- lenged in terms of providing concession space to meet demand and could undoubtedly produce higher average sales per enplaned passenger (and revenue per enplaned passenger) if more space were available for concessions. 5.1.6 Optimum Productivity The optimum productivity is the highest amount of space consistent with not losing a sale as a result of congestion. Unfortunately, a mathematical model cannot be used to determine the perfect number. The optimum productivity varies by airport and by concession type. As traffic grows, sales can be lost due to congestion during peak periods, when passengers may bypass a 60 Resource Manual for Airport In-Terminal Concessions Non Hub Small Hub Medium Hub Large Hub Restaurants/food courts (incl. seating) $100 â $200 $400 â $700 $800 â $1,300 $1,250 â $2,000 Retail $300 â $600 $650 â $1,200 $1,000 â $1,600 $1,300 â $2,000 Duty free $500 â $1,700 $2,200 â $3,600 Range of Sales per Square Foot Concession Category Source: LeighFisher. Table 5-3. Recommended range of productivity for planning (sales per square foot).
concession rather than wait. At an airport with relatively high daily flight peaks, sales will start to be lost from congestion effects at a lower average productivity than at an airport that has rel- atively even traffic throughout the day. This is particularly important at connecting hub airports, where passengers changing planes may have limited time after locating their departure gates. When concession space is limited, sales will vary depending on the type of concession. Some effects of limited concession space on food, convenience, and specialty and duty free concessions are the following: â¢ People are more likely to queue for food, so sales at undersized food units may continue to increase. However, some sales will be lost as the units become more crowded and customers are turned away. The level of passenger service deteriorates over time. â¢ At convenience units, people will tolerate some congestion and small queues for payment, but, in general, these units are more sensitive to undersizing (the optimum productivity point exceeded) than food or bar units. â¢ Specialty and duty free products are impulse buys, and if the unit looks to be difficult to nav- igate because people with towed luggage are in many areas of the unit, or if there is a substan- tial queue for payment, sales are certainly lost. With high-end merchandise, customer service expectations may also increase as the amount of the purchase increases. Developing the Concession Space Plan 61 Table 5-4. Comparison of sales per square foot and sales per enplaned passenger for selected large hub airports. Airport Average sales per square foot Rank among top 25 airports (1) Sales per enplaned passenger Rank among top 25 airports (1) Chicago O'Hare International Airport $ 2,453 1 $ 8.58 16 Los Angeles International Airport $ 1,817 2 $ 8.93 12 Hartsfield-Jackson Atlanta International Airport $ 1,812 3 $ 7.55 22 Charlotte Douglas International Airport $ 1,775 4 $ 8.12 23 Las Vegas McCarran International Airport $ 1,721 5 $ 10.10 5 (1) Top 25 large hub airports submitting data for Airport Revenue News Fact Book 2009 (Airport Revenue News 2009). Source: âSpace Plan for Tom Bradley International Terminal,â unpublished, prepared by LeighFisher, 2010. Figure 5-7. Effect of congestion on spending per enplaned passenger.
Table 5-5 provides a summary of the propensity of customers to wait and other key decision factors that affect productivity. 5.1.7 Benchmarking of Concession Space Once the amount of supportable space has been estimated, it may be useful to benchmark the estimated space against such space at other airports and contact peer (comparable) air- ports to discuss their planning standards. At Dallas/Fort Worth International Airport, for example, a planning standard of 10 square feet per 1,000 enplaned passengers has been adopted. In setting planning standards, such factors as the following should be taken into account: â¢ The efficiency of a terminal in terms of concentrating passenger flows â¢ Exposure to passengers â¢ The allocation of space pre- and post-security to reflect customer demand â¢ Configuration of the space in terms of frontage and depth preferred by concessionaires â¢ Passenger/customer characteristics â¢ Clustering of concessions to create desirable retail density Figure 5-8 provides the concession floor areas per 1,000 enplaned passengers for selected air- ports and, for comparison, selected international terminals at U.S. airports, and some airports outside the United States to illustrate the range of concession space provided. Caution should be exercised when using any airport as a benchmark. Many older termi- nals are space constrained. Using these terminals or a group of terminals that includes space- constrained terminals can result in unrealistic numbers. Similarly, concession units at some airports may be oversized relative to demand because of changes in airline service, an over- supply of pre-security space, the number of security checkpoints and separate passenger flows, or other factors. For these reasons, use of a detailed supportable space analysis that indicates concession space by terminal zone is recommended over a rule of thumb or comparison with other airports. 62 Resource Manual for Airport In-Terminal Concessions Table 5-5. Customer propensity to wait, level of service requirements, and range of transaction values by concession type. Required Level of Service Indicative Category Propensity to Wait Low Medium High Range of Transaction Values Restaurant High $12 to $25 Specialt y coffe e H igh $2 to $5 Bar Low $7 to $12 Quic k- serv e H igh $5 to $10 Convenience retail Moderat e $1 to $15 Specialt y retail Low $10 to $100 Duty fr ee Per fu me & cosm et ic s Low $30 to $300 Liquor & tobacco Moderat e $20 to $125 Conf ectioner y M oderat e $20 to $75 General me rchandi se Moderat e $20 to $1,000 Fashion Low $50 to $5,000 Je welr y and watches Low $200 to $20,000 Fashion boutiques Ver y Lo w $100 to $5,000 Source: LeighFisher.
5.1.8 Where Will the Customers Be? With the amount of supportable space in the terminal determined, the next step is to allocate this supportable space to the optimum locations. The first step in this allocation process is to deter- mine where the customers will be in the terminal. Passenger volumes diminish as the distance from the central core increases and the passenger flow is split to the terminal concourses. The approach to determining customer locations is to split the terminal into zones. The actual number of zones depends on the size of the terminal, but a typical subdivision into zones includes the following: â¢ Landside departures â¢ Airside core area departures â¢ Airside concourses â¢ Airside arrivals â¢ Landside arrivals Developing the Concession Space Plan 63 Source: LeighFisher. U.S. airport data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009). Figure 5-8. Comparison of concession space per 1,000 enplaned passengers for selected airports and international terminalsâ2008.
Each concourse would represent one or more zones. Where a terminal has multiple traffic sec- tors (domestic, international), zones are typically developed for each area within each traffic sec- tor. Table 5-6 presents an example of how customer volumes are determined by zone. It is frequently useful to create traffic density diagrams to present the traffic volumes visu- ally. Figure 5-9 is an example of this type of diagram. The determination of where customers will be and the visual presentation of this information can prevent a frequent error in conces- sion planningâthe provision of excessive concession space where traffic volumes are low, such as at the end of concourses. The forecast supportable space can be determined by multiplying the expected spend rate in each area of the terminal by the number of potential customers using each area. This produces an estimate of gross sales by area of the terminal. Dividing these estimated gross sales by the pro- ductivity factor illustrated in Table 5-3 produces the concession space by category for each zone of the terminal. Table 5-7 presents space allocations by zone and category based on estimates of customers in each zone and spend rates in each zone. At this stage in the concession program development, individual units are not yet sized, but space by category can be determined within each zone. Table 5-7 is an example of space alloca- tion to each zone by category. Allocations representing small amounts of space may not be viable. It may not be possible to provide the optimal amounts of space in each zone of the terminal. In older terminals, or terminals operating at high levels of passenger activity relative to their 64 Resource Manual for Airport In-Terminal Concessions Table 5-6. Example of determining traffic by zone (annual customers in the planning year). Terminal Zones Transit passengers Enplaned passengers Deplaned passengers Well-wishers Meeters and greeters Employees (workdays) Transit lounge 275,000 â â â â â â â â â â â â â â â â â Landside â 5,500,000 1,100,000 180,000 Airside core â 5,500,000 â â â â â 90,000 Departures lounge south â 2,970,000 Departures lounge north â 2,035,000 Baggage claim â â 5,500,000 Arrivals lobby â â 5,500,000 1,100,000 45,000 Note. Dashed lines indicate no value. Figure 5-9. Example of traffic density diagram.
design capacity, providing optimal amounts of concession space may be impossible. Neverthe- less, performing a supportable space analysis will help concession planners understand the rel- ative magnitude of the shortfall, identify areas where additional concession space may be viable, and provide inputs for future terminal planning studies. 5.2 Supportable Concession Units Based on Traffic Levels Within the framework of the supportable space, determining the types, numbers, and sizes of individual concession units is a function of passenger traffic and the practical sizes for conces- sion units. The scale effect can most easily be understood by considering very small local airports. Typically, the concession program at these airports consists of a single food outlet and a news- stand, possibly one with some gift items such as T-shirts. Considering the low traffic levels at very small airports, specialty retail and service offerings are seldom viable. As traffic levels increase, thresholds are reached at which multiple food offerings and specialty retail offerings are support- able. For example, of the small hub airports in the survey conducted for this research project, 70% reported that they had food courts with multiple units. This percentage increased to 87% for medium hub airports. At larger airports, multiple convenience retail and food offerings become essential as walking distances to gates increase. Table 5-8 presents an estimate of the enplaned passenger levels nec- essary to support various types of concessions. Duty free is an unusual category in that, if the air- port offers international flights, duty free offerings can be provided by mobile units at very low traffic levels because of the high margins inherent in duty free sales. Also of interest is that the Airport Revenue News Fact Book 2009 data appear to show an approx- imately 10% âcannibalizationâ or reduction of convenience retail spending where a significant Developing the Concession Space Plan 65 Table 5-7. Example of concession space allocation by zone and category. Terminal Area Food andbeverage Convenience retail Specialty retail Duty free Services Total Transit lounge 742 160 510 1,412 Landside departures 9,616 1,100 63 10,779 Airside core 14,253 5,516 5,113 21,197 402 46,481 South concourse 1,524 917 582 3,023 North concourse 1,044 628 399 2,071 Baggage claim â â â â â â â â â â â â â â 48 48 Arrivals lobby 2,455 456 47 2,958 Total 29,634 8,777 5,113 22,688 560 66,772 Table 5-8. Estimated minimum enplaned passenger levels to support concession units. Concession Type Enplaned passengers Range of Unit Sizes (square feet) Specialty Retail Units1 400,000 800â2,000 Three Unit Food Court2 900,000 1,500â2,400 Five Unit Food Court1 1,600,000 1,500â2,400 Multiple News/Gift Units 450,000 800â2,400 1. Excluding retail merchandising units (kiosks). 2. Including seating area. Source: LeighFisher using data from the airport surveys conducted for ACRP Project 01-11.
specialty program has been introduced (Airport Revenue News 2009). This likely reflects com- petition among concession units as well as a shift in sales of some items in newsstands or news/gift shops to specialty retail shops. Overall, specialty retail programs add incremental rev- enue in the retail category. 5.3 Sizing of Concession Units The dimensions of concession units are often determined by the basic terminal configuration. In concourses, holdroom depths are usually at least 30 feet, and concessions occupy the same depth of space between the central corridor and the exterior walls. In areas such as a large central core space, where the terminal dimensions do not drive con- cession depths, the preferred approach is to keep retail concessions shallow (25 feet to 30 feet in depth) and wide. This approach maximizes the passengerâs exposure to the shop. Unlike cus- tomers at shopping centers, airport customers arenât at airports to shop, so spontaneous pur- chases are more important, and these are generated through exposure, which is maximized by wider shop fronts. 5.4 Location Criteria The location of the concession program has a dramatic effect on sales and customer satisfac- tion. Location issues consist of the following: â¢ Pre-security versus post-security split â¢ Concentration into concession zones versus dispersion â¢ Contiguous concession spaces versus interruption of concessions â¢ Flow-past versus flow-through concession areas â¢ Departures level versus mezzanine level concessions Each of these criteria is discussed in the sections that follow. 5.4.1 Pre-Security versus Post-Security Split With implementation of passenger security screening, the location of the concession offerings became an important issue because of the following: â¢ Almost the entire concession program at many older terminals was in areas that became pre-security. â¢ With ever-more-stringent screening processes, the percentage of passengers who return to pre-security areas after screening continues to decrease. â¢ Well-wishers are not permitted airside and, because of both security and processing capacity issues, are unlikely to be permitted post-security in the future. â¢ Dwell times have increased post-security and decreased pre-security. Although queue times for security processing have typically improved since the security inspection changes were implemented in response to the attacks of September 11, 2001, the uncertainties regarding queuing time still mean that, for most passengers, anxiety remains high until they have passed through the screening checkpoint. Passenger surveys indicate that dwell times are often longer than estimated by airport management and that passengers are anxious to clear security. The uncertainty of queuing and processing times at the security screening checkpoint means that passengersâ propensity to use concessions is much lower pre-security than post-security. 66 Resource Manual for Airport In-Terminal Concessions
While passenger attitudes are difficult to survey, many surveys capture passenger responses to their dwell times pre-security and post-security; the evidence indicates that passengers typically migrate to the post-security area as soon as they can. Passenger surveys at 10 airports that included dwell time questions indicated a range of total dwell times between 83 minutes and 165 minutes (average of 109 minutes), of which an average of 60% was spent post-security. For these airports, passengers finished all processing except boarding and had more than an hour to spend post-security on average. At a few airports, passengers may arrive early due to tour group movements, early hotel check- out times, or cruise ship schedules. Airline ticket counters may not be open or airlines may not be able to accept checked baggage several hours before departure time. At international termi- nals, small airlines may not be open for early check-in. This may require some passengers to remain in pre-security areas and may increase demand for pre-security concessions. In the current more stringent security environment, many airport operators have been relo- cating the majority of their concessions post-security as terminals are modified or expanded. Table 5-9 summarizes the percentage of concession space and sales located pre-security and post- security for the airports surveyed for this research project. Among the airports surveyed, post-security concession space is 43% more productive than pre-security concession space in terms of sales per square foot. The airport concession managers surveyed for this research project indicated that they would prefer more of their concessions to be located post-security, as indicated in Table 5-10. The fact that the current and recommended percentages of concession programs located post-security increases with airport size is consistent with the increase in importance of retail as airports increase in size, and the fact that retail tends to be an impulse purchase that requires the passen- ger to have time and the appropriate frame of mind. As indicated in Table 5-10, for the surveyed airports, the suggested post-security percent- ages of the total concession program are significantly higher than the post-security percentages Developing the Concession Space Plan 67 Table 5-9. Percentage of concession space and concession sales pre- and post-security. Table 5-10. Current and suggested post-security allocation of concessions by airport size category. Concession Location Percent of Concession Space Percent of Concession Sales Pre-Security 31% 24% Post-Security 69% 76% Source: LeighFisher using data from the airport surveys conducted for ACRP Project 01-11. Airport Category Percent Post-SecurityToday Percent Post-Security Suggested Small Hub 56% 68% Medium Hub 69% 79% Large Hub 76% 85% Source: LeighFisher using data from the airport surveys conducted for ACRP Project 01-11.
currently found at many airports. Many older terminals were constructed before passenger screening procedures were expanded and simply lack the space post-security to accommodate a large concessions program. Typically, as new terminals are built or major expansions are undertaken, the concession pro- gram is substantially shifted to post-security locations. The operator of Manchester Airport in the United Kingdom, as an extreme example, has implemented a 100% post-security program on the departures level, with the only pre-security concession units on the arrivals level. Most airport operators, however, want to retain some departures level pre-security concession facili- ties, primarily to provide the opportunity for passengers to spend time (and money) with their well-wishers. Pre-security units tend to be predominantly food and convenience retail. Examples of airports with very large pre-security concession programs do exist, but in these examples, such as Amsterdam Airport Schiphol, the airport terminal also serves as a commuter hub for locals transiting from the airport neighborhood to the city core. Not many airports share this characteristic. Terminal 4 at Phoenix Sky Harbor International Airport has a sizable pre-security concession program consisting of approximately 38,000 square feet of leased space. According to the air- portâs concession manager, the pre-security program was developed because (1) the volume of departing passengers using the terminal is triple what was originally planned and (2) the amount of concession space post-security is very limited and cannot be expanded. The pre-security con- cession program helps satisfy some of the demand that cannot be accommodated by the post- security concessions and, by meeting some of the demand of originating passengers, frees capacity for use by connecting passengers, particularly during traffic peaks. Another example of a large pre-security concession program is the privately developed Ter- minal 4 at John F. Kennedy International Airport, which has a large central pre-security conces- sions hall. Although the program is successful, the terminal owner plans to relocate the main security checkpoint so that the concessions area will be post-security and anticipates increased spend rates as a result. 5.4.2 Concentration into Concession Zones versus Dispersion In older terminals, concession programs, particularly post-security concessions, often appeared to be fit into available space, resulting in a scattered program. As the focus on commercial revenues and passenger services has increased, there has been a move toward creating concession zones with a concentration of concessions, dÃ©cor, and floor treatment that differentiate these zones from other areas of the terminal. In developing a concession program, the following should be taken into consideration: â¢ Convenience and location of the proposed concession program. One of the most important success factors in retailing is convenience. Clearly, the location of concessions within the ter- minal is crucial. â¢ Locations within passenger flows. Fundamental to designing a successful concession pro- gram is ensuring that units are positioned along natural passenger flow paths. â¢ Centralization. Passengers prefer airport commercial retail facilities that are convenient, con- centrated, and well positioned. In fact, a concentrated, well-placed, central concession area will greatly influence the economic viability of the terminalâs concessionaires. Shops give life to each other. Therefore, it is important that the locations are well considered and that the right shops are placed in the right clusters, creating a critical mass of outlets forming a âretail street.â Concentration, also referred to as retail density, is important, as experience has shown that retailers will perform best when commercial concessions are highly visible, placed in the 68 Resource Manual for Airport In-Terminal Concessions
direct flow of high traffic areas, and clustered together to form a critical mass in complemen- tary adjacencies. â¢ Visibility. A prominently visible location for the majority of the concession program, typi- cally immediately post-security, augmented by signage, flooring, and lighting treatments that clearly differentiate a shopping and dining zone, will increase the performance of the conces- sion program. â¢ Service. In larger airports, where walking distances are long, food and news units should be located beyond the clustered concession zones. Typically, a distance of every four gates on a concourse with aircraft parked on only one side or every two gates where aircraft are parked on both sides of a concourse should be considered for food and news services, even if they are small and offer limited selection. 5.4.3 Contiguous Concession Spaces versus Interruption of Concessions For maximum effect, a contiguous format for the concession program is recommended, with minimal interruptions to the physical flow of concessions created by operational features such as corridors, fire hoses, blank walls, utility rooms, columns, and restrooms. The benefits of cre- ating a âsense of place,â design theme, and effective signage are enhanced by minimizing inter- ruptions to the visual and physical flow of the commercial retail area. 5.4.4 Flow-Past versus Walk-Through Concession Areas âWalk-throughâ concession areas as a strategy bring the product offering more directly to the traveler. Walk-through concession areas encourage the maximum number of passengers to buy something. Walk-through concessions versus flow-past concessions instantly increase passen- ger flows, and, the higher the passenger flows, the greater the opportunity to convert passengers into buyers (the capture rate) and the greater the opportunity to raise average spend per passen- ger and average transaction spend. There is always some tension between a complete, walk- through shopping and dining experience and the operational concerns of the airport operator. Figure 5-10 shows a walk-through concessions area, with security inspection indicated by the arrow. Once passengers have passed through the security checkpoint, they follow a serpentine Developing the Concession Space Plan 69 Source: BAA. Figure 5-10. Example of flow-through concessions (London Heathrow Airport Terminal 3).
walkway through the large open-plan duty free space (indicated by the dotted line) leading to the common departure lounges and seating areas. Other retail and food and beverage spaces are clustered around the common seating areas, where passengers remain until their departure gate is posted, about 1 hour before departure. Walk-through concession areas are increasingly prominent at major airports outside the United States where concession revenues, particularly retail, are major sources of revenue. Walk-through concessions also require an accommodating terminal layout and large, concentrated passenger flows. 5.4.5 Departures Level versus Mezzanine Level Concessions It is conventional wisdom that concessions should be on the enplaning level along major pas- senger flows and that placing concessions on a mezzanine level, as is common in Europe and Asia, will not work in the United States. Mezzanine level concessions at airports can be success- ful in certain circumstances with careful planning, as demonstrated at two major U.S. airports, Denver International Airport and Hartsfield-Jackson Atlanta International Airport, and at Calgary International Airport in Alberta, Canada. The mezzanine level concessions at these airports are pre- dominantly food and beverage concessionsâmostly casual dining restaurants seeking to attract passengers with longer dwell times, such as early-arriving originating passengers and connecting passengers with longer connect times. At the Atlanta and Calgary airports, the mezzanine concessions are all casual dining units or food courts. At the Denver airport (see Figure 5-11), the mezzanine on the busiest concourse also includes some specialty retail shops that take advantage of the foot traffic from the mezza- nine food/beverage concessions. These include two large casual dining units, a large smoking lounge with a bar, specialty coffee, ice cream, and a smoothie unit. Successful mezzanine programs share common characteristics, including the following: â¢ Strong passenger demand that cannot be satisfied with the concession space on the departures level alone â¢ Placement of concessions in high-traffic areas at the center of the concourse, where the con- centration of passengers is greatest (for most airports, the equivalent would be the area imme- diately post-security) â¢ Visible pairs of escalators offering easy access to and from the mezzanine level, which reduces the passengerâs perceived risk of venturing off the departures level 70 Resource Manual for Airport In-Terminal Concessions Figure 5-11. Mezzanine concessions (Concourse B, Denver International Airport).
â¢ Strong destination restaurant brands to help attract foot traffic â¢ Good visual access from the departures level to the concessions on the mezzanine level, with prominent signage While mezzanine level concession development may be viable in some busy terminals where concession space demand is high, such development should be approached cautiously. 5.4.6 Appropriate Spaces In developing appropriate locations for concessions, the following should also be considered: â¢ Restaurants and food court seating should be at the windows as much as possible to take advantage of natural light and airfield views. â¢ Kitchens should be in spaces with single-story ceiling heights. Ventilation in kitchens can be a significant issueâin many jurisdictions, lateral ventilation to an outside wall is not permissible. â¢ If locations are suitable, food units should have soft transitions into the holdroom areas. â¢ Duty free and specialty shops tend to be more successful when not located along an exterior open window wall, which reduces display areas. â¢ Specialty shops, convenience retail, and duty free boutiques function best if they are in spaces with conventional ceiling heights. High spaces work well for some food seating and can work for duty free general operations. â¢ Service corridors should be considered when locating kitchens and high-volume duty free operations (liquor, tobacco). This keeps deliveries, garbage, and trash out of sight of passen- gers and avoids soiling carpets and public spaces. 5.5 Adjacencies Many concessions work better together. As a simple example, the creation of shopping oppor- tunities immediately across a corridor from food court seating enables customers to see the shop- ping area while they are dining and enables family members to shop and return to the food court. Figure 5-12 illustrates adjacencies that can contribute to a successful concession program. Developing the Concession Space Plan 71 D eparting Passenger Flows Ar riv in g Pa ss en ge r F lo ws Source: LeighFisher. Figure 5-12. Recommended concession adjacencies.
As a general rule, clustering concessions together increases exposure for all concessions, has greater pulling power, and creates a concession zone where all tenants benefit from proximity. Clustering concessions produces better overall performance compared with having concessions isolated along passenger flows. Other commonly used adjacencies include locating newsstands and specialty coffee units adja- cent to one another; grouping specialty retail together, often with a convenience retail to increase exposure and take advantage of the foot traffic created by convenience retail; taking advantage of traffic created by restrooms to increase exposure to passengers; and clustering quick-serve units together in food courts, which creates more of a destination and allows members of a trav- eling party to stay together while using different concessions. 5.6 International Terminals The locations of concessions will differ in an international terminal where high-value conces- sions, such as duty free, should take precedence. The location, sizing, and configuration of the duty free concession need to be well planned to maximize sales. The following should be taken into consideration in planning for duty free concessions: â¢ According to a major international duty free concessionaire, experience at airports outside the United States has shown that a cash and carry duty free approach can achieve as much as 20% more sales compared to a gate delivery approach. Countries that permit cash and carry of duty free goods typically require that all passengers leaving the departures level of the international areas of the terminal either board an international flight or exit though the Immigration and Customs area. No return past security on the departures level is permitted. â¢ In the United States, gate delivery is the prevalent mode of operation for duty free conces- sionaires; however, cash and carry may be permitted with approval from local and district Customs officials in locations where the purchased goods are restricted to secure concourses with no domestic activity. Duty free concessionaires at San Francisco International Airport and Los Angeles International Airport are permitted to operate on a cash and carry basis at the discretion of Customs authorities when there are no domestic passengers present. Cash and carry is a win-win proposition for the customer (who has the peace of mind that he/she can take high-value purchases onboard the aircraft), for the concessionaire (which has addi- tional time to make sales as well as reduced operating costs and higher sales); and for the air- port operator (which achieves both improved revenues and improved customer service). â¢ Duty free is a draw for many international passengers. For passengers from countries other than the United States, duty free is often considered an opportunity to purchase highly taxed luxury items (cigarettes, liquor, jewelry, and fragrances), and these passengers are highly moti- vated to seek out duty free. This creates the opportunity to use duty free as the âanchor storeâ in a concession zone. â¢ Duty free is a mixture of luxury products (which are typically presented in a well-designed environment) and high-volume goods (which require a different environment). A âstore in storeâ approach allows the store design and lighting to reflect the very different product lines offered. International terminals with high traffic levels and spend rates can support a variety of duty free items. It may be advantageous to separate the luxury goods (fragrances, luxury accessories, and jewelry) from liquor and tobacco. â¢ Where there is volume to support them, branded duty free boutiques can be provided sepa- rately from a duty free âgeneral store.â As with boutiques on a luxury shopping street, duty free boutiques allow for a very high level of customer service consistent with the brandâs stan- dards and customer expectations. Foreign currency exchange booths are also common in international terminals. Depending on passenger traffic levels and the concentration of passenger flows, foreign currency exchange 72 Resource Manual for Airport In-Terminal Concessions
booths may be located in pre-security departures areas, in post-security departures areas, and in arrivals areas outside of the Federal Inspection Facility (FIS) facility. Outside of the United States, currency exchange booths are often located within the Customs baggage claim area or inside the exits from the Customs area. These locations provide a quieter, more secure environment com- pared with the typical international arrivals area. Certain services, such as secure baggage storage, are also more common in international ter- minals. Food and beverage, convenience retail, and specialty retail concessions in international terminals are planned similarly to the way they are planned in domestic terminals, although the spend rates in international terminals are likely to drive higher amounts of supportable space. 5.7 Wayfinding and Concession Signage Effective concession signage and information programs can reduce confusion and increase sales. The objectives of concession signage are the following: â¢ Inform passengers pre-security of the concessions they will find post-security and the conces- sion locations â¢ Communicate brands to passengers as they walk past or through concession areas â¢ Communicate product or service information for unbranded concession units â¢ Create an interest in shopping or dining at the concessions â¢ Avoid interfering with basic passenger information regarding gates, washrooms, etc. â¢ Add color and vibrancy to the terminal â¢ Inform arriving visitors of the concession opportunities they will find when they depart from the airport at the end of their trips Various concession signage programs are used at airports today, ranging in effectiveness from very poor to excellent. Some constraints that contribute to poor programs include basic termi- nal designs that use soffits or store caps to house ductwork for ventilation and air handling, often reducing ceiling heights and the area available for concession signage; restrictive terminal archi- tecture controls on signage locations, sizes, colors, etc.; and low ceilings in older concourses. In new terminals or extensive modernizations, it may be possible to reduce or eliminate these limitations. Modern, effective programs include blade signs, 3-D signs, and key signage (e.g., directories) to guide the customers. Blade signs are particularly effective in post-security areas. The passen- gers are moving quickly and seeking information on their departure gates. An effective blade sign presents nearly instantaneous information on brand and product. An example of blade signs is provided in Figure 5-13. 3-D signage is also very effective in communicating concession infor- mation. Importantly, it can also be used to add color and drama, improve visibility, and com- municate that an area of the terminal functions as a commercial zone (see Figure 5-14). Concession directories are important at key decision locations such as pre-security to provide information on concessions both pre-security and post-security and immediately post-security, near the passenger security screening checkpoint, to provide information on locations, types, brands, etc., in each concourse or gate area. An example of a concession directory is shown in Figure 5-15. 5.8 Return on Airport Investments in Concession Space Concession space typically yields airport revenues well in excess of the annualized capital and operating and maintenance (O&M) costs of the floor space; therefore, even if extra concession space is provided, the airport revenues would be expected to exceed the cost of providing the space. Developing the Concession Space Plan 73
Importantly, except at the productivity levels of nonhub airports, even the low end of typical productivity ranges typically provides a revenue stream to the airport enterprise that will exceed the costs of constructing and maintaining the floor space. Table 5-11 presents an example of a financial analysis showing the internal rates of return (IRRs) for analysis of various combina- tions of expected sales per square foot, percentage rent, capital costs for terminal space, and oper- ating and maintenance expense. This type of analysis should be customized for the expected sales, costs, and rent structure of each airport. In this example, low productivity from food and beverage spaces and low percentage rent would produce low returns, with an exceptionally long payback period and a low IRR. Other concession categories achieve reasonable paybacks and internal rates of return. This suggests that there is an oversupply of food and beverage space that will not be profitable at an average productivity of $500 per square foot. 74 Resource Manual for Airport In-Terminal Concessions Figure 5-13. Example of blade sign (San Francisco International Airport, Terminal 2). Source: AirMallÂ® USA. Figure 5-14. 3-D concession signage (Baltimore/ Washington Thurgood Marshall International Airport).
Developing the Concession Space Plan 75 Figure 5-15. Concession directory (Washington Dulles International Airport). Table 5-11. Internal rate of return for various combinations of productivity, rent percent, and terminal capital and operating and maintenance costs. Category Productivity ($/SF) Percentage Rent Rent ($/SF) Annualized Capital & Operating Costs Payback @ 5.5% Real Interest (Years) IRR (real) Food High $1,200 12% $144 $85 8.0 14% Low $500 9% $45 $49 27.0 1% Retail High $1,600 17% $272 $85 3.5 32% Low $900 10% $90 $49 6.0 18% Duty Free High $1,600 28% $448 $85 1.9 55% Low $900 15% $135 $49 3.5 32% IRR = Internal rate of return SF = Square foot Source: LeighFisher.
5.8.1 Impediments to Adding Concession Capacity With a relatively high rate of return on investment in needed concession space, what prevents airport operators from expanding concessions? Impediments typically include the following: â¢ Older terminals with very limited post-security space â¢ Narrow concourses â¢ Long concession agreement terms â¢ Dry concourses, without the utilities to support kitchen operations â¢ Failure to make the business case for expansion to the users Typically, concession space is expanded as part of a broader terminal expansion program designed to add overall terminal capacity, where the scale is sufficiently large so as to bring the unit square footage costs down to affordable levels. 5.8.2 Strategies for Space-Limited Terminals There are alternatives for space-limited terminals that can improve the concession program, including retail merchandising units, wall hugger concession units, in-holdroom concessions, pop-outs between gates, relocation of other activities, and automated retail machines, all of which are discussed below. Retail Merchandising Units One approach to specialty retail units is the use of retail merchandising units (RMUs or kiosks), which are self-contained, relatively low-cost, and small footprint units that can be used to pro- vide concessions in space-limited terminals, to add specialty concepts to serve lower traffic levels, or to add new concepts to an existing specialty program. These units range in size from 30 square feet to 100 square feet and can fit in locations unsuitable for larger units. The operators of some airports with wide concourses have installed RMUs down the center of the concourse. Wall Hugger Concession Units There is such demand for concession units to fit into very shallow spaces, particularly on con- courses, that many news/gift, food, and specialty concessionaires have developed units specifi- cally designed for very shallow spaces. These units often provide a wide frontage to present the product, but occupy a depth of less than 4 feet. In-Holdroom Concessions Small units can be installed directly into holdroom space, subject to airline approval. These units include coffee bars, fast food units, and bars (subject to state licensing regulations). The placement of concession units directly in holdrooms typically requires consideration of the effects on janitorial cycles and carpeting in the area. Exterior Pop-Outs between Gates As a general rule, the cost of creating or enlarging terminals for concessions alone is pro- hibitive. Adding space solely for concessions, say, by building space onto a concourse, is expen- sive because it requires two (or three) levels of building, and the construction must take place in the secure air operations area, where building is expensive. Seldom will the net concession revenues offset the full cost of constructing incremental concession space. There are examples, however, where a business case has been made that the return on investment is sufficient to justify the expenditure, and, if the terminal design is conducive to building out between gates, a business case should be analyzed if the need for additional concession space exists. 76 Resource Manual for Airport In-Terminal Concessions
Developing the Concession Space Plan 77 Source: Zoom Systems, Inc. Figure 5-16. Branded automated retail. Relocation of Other Activities Departures level space, particularly post-security, is valuable space with many demands. It may be possible to increase concession space by relocating other activities, for instance: â¢ To provide additional post-security concession space, security at Chicago OâHare Inter- national Airportâs Terminal 5 is being modified and relocated under a long-term concession agreement. â¢ Airline lounges are low-rent space compared to concessions and often function more effec- tively on a mezzanine level. Relocating lounges off the departures level can free up space for concessions. â¢ There may be other functions not directly related to passenger services, such as station man- agersâ offices or airline crew check-in lounges, on the departures level that can be relocated to other levels. Automated Retail In recent years, the use of automated retail machines has increased. These machines com- bine mechanical vending with touch-screen technology that provides detailed customer infor- mation and transaction processing. These units require only 28 square feet and a standard 110 volt power outlet and can offer a range of convenience merchandise or a range of branded mer- chandise, such as cosmetics or electronics, as shown in Figure 5-16. With sharply reduced labor
78 Resource Manual for Airport In-Terminal Concessions costs and secure inventory control, these machines can operate in lower-traffic areas, operate 24 hours per day, extend the range of merchandise offered, and provide incremental revenues without capital investment on the part of the airport operator. Machines can also be easily relocated, requiring shorter lease terms and no buyout requirement if the space is needed for other purposes. While most often used for specialty retail, these machines can also fill other needs. For exam- ple, at San Francisco International Airport, these sophisticated vending machines have been installed outside of the international arrivals area, where they offer travel necessities and personal care items as a service to passengers arriving on late night and early morning flights.