Improving Terminal Design to Increase Revenue Generation Related to Customer Satisfaction (2014)

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A I R P O R T C O O P E R A T I V E R E S E A R C H P R O G R A M ACRP REPORT 109 TRANSPORTAT ION RESEARCH BOARD WASHINGTON, D.C. 2014 www.TRB.org Research sponsored by the Federal Aviation Administration Subscriber Categories Aviation • Terminals and Facilities Improving Terminal Design to Increase Revenue Generation Related to Customer Satisfaction Landrum & Brown, Inc. Cincinnati, OH aIrProjects, Inc. Alexandria, VA aerotroPoLIs BusIness concePts, LLc Chapel Hill, NC envIroseLL New York, NY

AIRPORT COOPERATIVE RESEARCH PROGRAM Airports are vital national resources. They serve a key role in trans­ portation of people and goods and in regional, national, and inter­ national commerce. They are where the nation’s aviation system connects with other modes of transportation and where federal respon­ sibility for managing and regulating air traffic operations intersects with the role of state and local governments that own and operate most airports. Research is necessary to solve common operating problems, to adapt appropriate new technologies from other industries, and to introduce innovations into the airport industry. The Airport Coopera­ tive Research Program (ACRP) serves as one of the principal means by which the airport industry can develop innovative near­term solutions to meet demands placed on it. The need for ACRP was identified in TRB Special Report 272: Airport Research Needs: Cooperative Solutions in 2003, based on a study spon­ sored by the Federal Aviation Administration (FAA). The ACRP carries out applied research on problems that are shared by airport operating agencies and are not being adequately addressed by existing federal research programs. It is modeled after the successful National Coopera­ tive Highway Research Program and Transit Cooperative Research Pro­ gram. The ACRP undertakes research and other technical activities in a variety of airport subject areas, including design, construction, mainte­ nance, operations, safety, security, policy, planning, human resources, and administration. The ACRP provides a forum where airport opera­ tors can cooperatively address common operational problems. The ACRP was authorized in December 2003 as part of the Vision 100­Century of Aviation Reauthorization Act. The primary participants in the ACRP are (1) an independent governing board, the ACRP Oversight Committee (AOC), appointed by the Secretary of the U.S. Department of Transportation with representation from airport operating agencies, other stakeholders, and relevant industry organizations such as the Airports Council International­North America (ACI­NA), the American Associa­ tion of Airport Executives (AAAE), the National Association of State Aviation Officials (NASAO), Airlines for America (A4A), and the Airport Consultants Council (ACC) as vital links to the airport community; (2) the TRB as program manager and secretariat for the governing board; and (3) the FAA as program sponsor. In October 2005, the FAA executed a contract with the National Academies formally initiating the program. The ACRP benefits from the cooperation and participation of airport professionals, air carriers, shippers, state and local government officials, equipment and service suppliers, other airport users, and research orga­ nizations. Each of these participants has different interests and respon­ sibilities, and each is an integral part of this cooperative research effort. Research problem statements for the ACRP are solicited periodically but may be submitted to the TRB by anyone at any time. It is the responsibility of the AOC to formulate the research program by iden­ tifying the highest priority projects and defining funding levels and expected products. Once selected, each ACRP project is assigned to an expert panel, appointed by the TRB. Panels include experienced practitioners and research specialists; heavy emphasis is placed on including airport pro­ fessionals, the intended users of the research products. The panels pre­ pare project statements (requests for proposals), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing cooper­ ative research programs since 1962. As in other TRB activities, ACRP project panels serve voluntarily without compensation. Primary emphasis is placed on disseminating ACRP results to the intended end­users of the research: airport operating agencies, service providers, and suppliers. The ACRP produces a series of research reports for use by airport operators, local agencies, the FAA, and other interested parties, and industry associations may arrange for work­ shops, training aids, field visits, and other activities to ensure that results are implemented by airport­industry practitioners. ACRP REPORT 109 Project 07­08 ISSN 1935­9802 ISBN 978­0­309­28401­1 Library of Congress Control Number 2014939152 © 2014 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not­for­profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB or FAA endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not­for­profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The project that is the subject of this report was a part of the Airport Cooperative Research Program, conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. The members of the technical panel selected to monitor this project and to review this report were chosen for their special competencies and with regard for appropriate balance. The report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the Governing Board of the National Research Council. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board, the National Research Council, or the program sponsors. The Transportation Research Board of the National Academies, the National Research Council, and the sponsors of the Airport Cooperative Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report. Published reports of the AIRPORT COOPERATIVE RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet at http://www.national­academies.org/trb/bookstore Printed in the United States of America

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. C. D. Mote, Jr., is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, on its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. C. D. Mote, Jr., are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is one of six major divisions of the National Research Council. The mission of the Transporta- tion Research Board is to provide leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Board’s varied activities annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individu- als interested in the development of transportation. www.TRB.org www.national-academies.org

C O O P E R A T I V E R E S E A R C H P R O G R A M S CRP STAFF FOR ACRP REPORT 109 Christopher W. Jenks, Director, Cooperative Research Programs Michael R. Salamone, ACRP Manager Theresia H. Schatz, Senior Program Officer Terri Baker, Senior Program Assistant Eileen P. Delaney, Director of Publications Natalie Barnes, Senior Editor ACRP PROJECT 07-08 PANEL Field of Design Robert C. White, HAS Development Corporation, Houston, TX (Chair) Rick Blatstein, OTG Management, New York, NY Pamela Griffith-Jones, (formerly) Greater Toronto Airports Authority, Toronto, ON E. Lynn Hampton, Lynn Hampton Associates, Alexandria, VA Darija K. Scott, Scott Associates Consultants, Inc., Atlanta, GA Allan Seaman, U.S. Airways, Tempe, AZ Jeffrey Breeden, FAA Liaison Katherine Muse Duma, (formerly) Department of Homeland Security—Science & Technology Directorate Liaison Elisha Novak, FAA Liaison (retired)

ACRP Report 109: Improving Terminal Design to Increase Revenue Generation Related to Customer Satisfaction is a handbook of global best practices for airport management and industry professionals. It will inform airport practitioners of innovative airport planning and terminal design and will promote profitable revenue generation and customer satisfac­ tion at a variety of airport sizes and types. The handbook includes consideration of how to facilitate innovation in improving the customer experience through the use of technology and other resources. Traditional terminal planning and design approaches typically focus on passenger and baggage processing and functional requirements. While the movement of passengers and baggage between the curb and the aircraft is the basic functional role of a terminal, the atmosphere created by the mix of services and facilities in a terminal can greatly impact the economics of the airport and passenger satisfaction. A more satisfied passenger experience can lead to increased revenue generation through additional concession sales. As a result, overall passenger activity may increase as travelers select a particular airport in part due to the terminal layout and amenities offered. Further dwell time can vary due to irregular operations and other conditions that often result in passengers remaining in their terminals for extended periods of time. In addition to the challenges of day­to­day operations, air­ ports also face a highly dynamic and volatile operating environment with frequent changes in security and technology. This research was conducted under ACRP Project 07­08 by Landrum & Brown in asso­ ciation with AirProjects, Inc., Aerotropolis Business Concepts, and Envirosell. As part of the research, the firm completed a data collection plan to identify where there are correlations between above­average non­aeronautical revenue generation and customer satisfaction as potentially driven by unique terminal design and planning characteristics. Their data col­ lection included a sample of large, medium and small hub airports both in the United States and abroad for four primary categories of information: airport characteristics and design features, non­aeronautical revenues, passenger satisfaction levels, terminal design features and future trends in concession planning and design. F O R E W O R D By Theresia H. Schatz Staff Officer Transportation Research Board

AUTHOR ACKNOWLEDGMENTS The research reported was performed under ACRP Project 07­08 by Landrum & Brown as the prime contractor with the assistance of subcontractors AirProjects, Inc.; Aerotropolis Business Concepts, LLC; and Envirosell. Bruce Anderson, Vice President of Landrum & Brown, served as the Principal Investigator and Ann Ferraguto, President of AirProjects, served as Co­Investigator. The other valuable contributors to this research project included: from Landrum & Brown, Logan Smith and Larry Hilton; from AirProjects, Lauren Meurlin and Dawit Beru; from Aerotropolis Business Concepts, John D. Kasarda, Ph.D., Director; and from Envirosell, Matt Richard, Project Manager. Also, additional contributions were made by James G. Walsh, Deputy Executive Director and Chief Financial Officer, Baltimore/Washington International Airport; Alan M. Gluck, C.M., Business Development Director, AIRMALL USA, Inc.; Jay Kruisselbrink, AIRMALL USA, Inc.; and Roger Wilson, Director, Chatman Taylor. Additionally, the research team would like to acknowledge the contributions of the key individuals and their staffs at the seven case study airports including: at the Budapest Listz Ferenc International Airport (BUD), Bagoly János, Head of Retail Services; at John F. Kennedy International Airport (JFK), Mitch Nadler, Director of Concession Programs, and Brian Holtman, Manager of Concession Programs; at London Heathrow Airport (LHR), Phil Wilbraham, Heathrow Airport Ltd., Design and Development Director; at Minneapolis–St. Paul International Airport, Eric Johnson, CCIM, Director of Commercial Management and Airline Affairs, and John Greer, Assistant Director of Concessions and Business Devel­ opment; at the Pittsburgh International Airport (PIT), Bradley D. Penrod, A.A.E., President and Chief Strategy Officer; at Portland International Airport, Vince Granato, Chief Operating Officer, and Chris Madsen, General Manager of Business and Properties; and at Savannah­Hilton Head International Air­ port, Patrick S. Graham, A.A.E., Executive Director, and Colette W. Edmisten, A.A.E., Airport Operations Manager, Savannah Airport Commission. The authors are very grateful for the guidance and help provided by the ACRP Project 07­08 panel.

1 Chapter 1 Introduction 1 1.1 Primary Research Goals and Objectives 1 1.1.1 Terminal Design 2 1.1.2 Increasing Revenue Generation 2 1.1.3 Increasing Customer Satisfaction 2 1.2 Research Approach 3 1.2.1 Tier 1 4 1.2.2 Tier 2 4 1.2.3 Tier 3 5 1.3 Organization of the Handbook 6 Chapter 2 Guiding Principles 6 2.1 New Terminals versus Existing Terminals 6 2.1.1 Centralized and Decentralized Terminals 7 2.2 Concentrating Passenger Footfall 7 2.2.1 Amassing Concessions 7 2.2.2 Major Nodes 8 2.2.3 Minor Nodes 8 2.3 Diversity and Amount of Concession Offerings 8 2.3.1 Food and Beverage 9 2.3.2 Specialty Retail 9 2.3.3 Convenience Retail 9 2.3.4 Duty­Free Retail 9 2.3.5 National versus Local 10 2.4 Passenger Awareness to Concession Offerings 10 2.4.1 Signage 10 2.4.2 Advertising and Marketing 10 2.5 Optimizing Size of Concession Blocks 11 2.6 Optimizing Location of Concession Types 11 2.6.1 Food and Beverage 12 2.6.2 Specialty Retail 12 2.6.3 Convenience Retail 12 2.6.4 Walk­Through Duty­Free Retail 12 2.7 Controlling Passenger Behavior 13 2.7.1 Wayfinding 13 2.7.2 Casino Effect 13 2.7.3 Call­to­Gate Operation 13 2.7.4 Limited Public Seating 14 2.8 Human Engineering Factors 14 2.9 Customer Satisfaction 14 2.9.1 Minimizing Passenger Walking Distances 14 2.9.2 Walking Distances and Centralized Flow Tradeoff 15 2.9.3 Self­Service Technologies 15 2.9.4 Reduction in Passenger Anxiety C O N T E N T S

15 2.10 Variety of Concession Types and Pricing 16 2.11 Ancillary Land Development 17 Chapter 3 Terminal and Concession Planning and Design Considerations 17 3.1 Terminal Environment 18 3.2 Passenger, Visitor, and Employee Types and Flows 20 3.2.1 Passengers 22 3.2.2 Visitors 22 3.2.3 Employees 22 3.3 Terminal Configuration 23 3.3.1 Single versus Multiple Terminals 23 3.3.2 Size and Complexity of the Airport’s Passenger Operations 25 3.3.3 Airline Mission of the Airport 26 3.3.4 Centralized and Decentralized Terminal Facilities 29 3.3.5 Generic Terminal/Concourse Concepts 36 3.4 Aircraft and Passenger Considerations 36 3.4.1 Aircraft Apron and Taxiway/Taxilane Factors 36 3.4.2 Passenger Movement Considerations 42 3.4.3 Variation on Generic Types 45 3.4.4 Customer LOS Factors 47 3.5 Planning for Concessions in the Terminal Environment 48 3.5.1 Consumption Behavior 48 3.5.2 Correlation between Passengers, Sales, and Line­of­Sight 49 3.5.3 Correlation between Space, Passengers, and Sales 50 3.5.4 Casino Effect 50 3.6 Trends in Passenger Processing 52 3.6.1 Check­in Trends 53 3.6.2 Security Screening Trends 54 3.6.3 Holdrooms 59 3.7 Concession Needs 59 3.7.1 Types of Concessions Required 64 3.7.2 Concession Branding 66 3.7.3 Variety of Concessions 68 3.7.4 Adjacency Considerations 71 3.7.5 Methods to Determine Amount of Space 77 3.7.6 Locating Concessions by Type 84 3.7.7 Concession Signage 86 3.7.8 Pricing 86 3.7.9 Sustainability Considerations 87 3.7.10 Concession Trends 90 Chapter 4 Human Engineering Considerations 90 4.1 Human Engineering Concepts 90 4.1.1 Airport Customers 91 4.1.2 Landside Behavior 92 4.1.3 Airside Behavior 95 4.1.4 Planning for the “Backward Stroller” 95 4.1.5 Food Service and Retail Concessions 96 4.1.6 Arriving Passengers 97 4.2 Conclusion

98 Chapter 5 Ancillary Land Development Considerations 98 5.1 Ancillary Land Development 98 5.1.1 Retail Facilities 99 5.1.2 Hotels 99 5.1.3 Conference and Exhibition Complexes 100 5.1.4 Office Buildings 101 5.1.5 Cargo and Services 101 5.1.6 Recreational, Green, and Cultural Venues 102 5.1.7 Managing Ancillary Land Development 103 5.2 Conclusion 104 References Note: Many of the photographs, figures, and tables in this report have been converted from color to grayscale for printing. The electronic version of the report (posted on the Web at www.trb.org) retains the color versions.