2012 aci-na concessions benchmarking survey summary results
TRANSCRIPT
2012 ACI-NA Concessions
Benchmarking Survey
Summary Results
Contact:
Economic Affairs and Research
Tel: 202-293-8500
Email: [email protected]
www.aci-na.org
November, 2012
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Overview
Designed by the ACI-NA Concessions Benchmarking Working Group during February to June, 2012,
launched in June to all ACI-NA airport members, data collected in June - October online using
SurveyGizmo tool, and last response received on October 12, 2012.
Survey Methodology
ACI-NA Survey Participation
Survey Sample
General Information
Big Picture of U.S. Airports
Passenger Demographics
ACI-NA Survey Disclaimer and Conditions
The information contained in this publication has been compiled based on information submitted to ACI-NA.
ACI-NA accepts no responsibility for contributions provided by third parties for inclusion in this document. Moreover, no
reader of this publication should act on the basis of any information contained herein without referring to applicable laws and
regulations and taking appropriate professional advice. Although every effort has been made to ensure accuracy, ACI-NA
shall not be held responsible for loss or damage caused by errors, omission, misprints or misinterpretation of the contents
hereof.
The information contained in the aggregated ACI-NA summary presentation may be referenced or used publicly.
Overview
Overview Concessions Statistics
Type of Concessions Agreements
Staff Dedicated to Concessions Management
Food & Beverage Median Gross Sales Per Enplanement
News, Gift and Specialty Retail Median Gross Sales Per Enplanement
Food & Beverage – Rent Calculation
News, Gift & Specialty – Rent Calculation
Median Total Rent Per Square Foot
Rent Percent of Gross Sales
Concessions Contract Length
Percent of Gross Sales Breakdown by Category
Carts/Kiosk Program
Concessions Branding
Overview
Commercial Management Operations and Programs
Concessions Planning
Concessions Marketing Program
Customer Satisfaction/Monitoring Programs
Operational/Performance audits
Pricing Methodologies
Airport Mobile Applications
Central Distribution Center
Common Area Maintenance Charge Food & Beverage Concessionaires
Refurbishment Requirements
Closing Remarks
Participating Airports
Definitions
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Survey Methodology
Goal: To build a comprehensive database of key industry measures for benchmarking
with peer airports
Survey questionnaire in three parts:
Part 1 General Information
Part 2 Food & Beverage (F&B)
Part 3 News, Gift & Specialty Retail (NG&S)
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ACI-NA Survey Participation
92% increase in airport
response rate from 2011
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Survey Sample
Hub
Category 2010 2011 2012
Number of
Airports in US by
Hub Size (FAA)
% of Airports
Participating
(2012)
Large 18 13 26 29 90%
Medium 21 20 26 35 74%
Small 11 10 29 74 39%
Non-hub 3 3 4 249 <2%
Canadian 8 5 13 -- --
Total 61 51 98
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General Information
2012 ACI-NA Concessions Benchmarking Survey November, 2012
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Big Picture of U.S. Airports
Aeronautical vs. Non-Aeronautical Revenue
Source: FAA, ASS-400: CATS: Report 127
2011 (In Millions of U.S. Dollars)
Total Operating Revenues $16,701 Million
Total Non-Aeronautical Revenues $7,507 Million
*Includes revenues for services such as telecommunications, internet access, advertising,
barbershops, shoeshine stands, spas, and revenues from other non-aeronautical terminal uses not
otherwise listed.
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Passenger Demographics
100% of airports have made efforts to collect passenger demographic information.
70% of airports have updated passenger data since 2010.
The median age of passengers is 44.
The median household income is $86,925, significantly higher than the national
median of $50,054*.
Business travelers account for 40% of passengers.
*Note: 2011 data from US Census Bureau
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Overview Concessions Statistics
2012 ACI-NA Concessions Benchmarking Survey November, 2012
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Type of Concessions Agreements
Prime operator - Airport leases packages of locations to two or more operators, each of which has multiple locations
(more than 3) within the airport.
Master concessionaire - Airport leases all food service concessions to a single operator, who may or may not also
operate retail. The Master Concessionaire may sublease some of the locations to other operators.
Direct leasing - Airport leases individual locations or small groups of locations (no more than 3) directly to the
operators.
Developer - Airport has agreement with a third party to develop/lease and manage the concessions without operating
any directly. Developer invests in facilities directly.
Note: Combined Food & Beverage and News, Gift & Specialty Retail Concessions Agreements
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Staff Dedicated to Concessions Management
Percent of airport staff dedicated to
Concessions Management
Factors affecting staffing levels:
Airport size and hub status
Management methodology
Number of contracts
Monitoring requirements
Note: Included separate airport responses, from airports with different terminal management (i.e. PANYNJ – JFK Terminal 5)
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Food & Beverage
Median Gross Sales - Per Enplanement
Note: Included separate airport responses, from airports with different terminal management (i.e. PANYNJ – JFK Terminal 5)
The overall Food & Beverage median gross sales, per enplanement is $5.00 compared to $4.69 in
2011. All hub sizes across the board have seen an increase gross sales per enplanement since
2010. Only the Canadian airports have a slightly lower median in 2012, compared to 2011 for Food
& Beverage.
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News, Gift and Specialty Retail
Median Gross Sales - Per Enplanement
Note: Included separate airport responses, from airports with different terminal management (i.e. PANYNJ – JFK Terminal 5)
The overall News, Gift and Specialty Retail median gross sales, per enplanement is $3.10
compared to $2.91 in 2011. Most notability the JFK Terminal 1 had the maximum gross sales per
enplanement at $62.60. On the other hand, at least three Canadian hubs, that have not previously
responded to the survey included Duty Free, thus increasing the 2012 News, Gift and Specialty
Retail Canadian median.
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Food & Beverage - Rent Calculation
Median Percentage of Gross Sales, if rent is
calculated by percent of gross sales:
Food & Beverage - 10.50%
Median Percentage of Gross Sales, if rent is
Calculated by Minimum Annual Guarantee
(MAG) or percent gross sales, whichever is
greater:
Food & Beverage - 13.00%
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News, Gift & Specialty - Rent Calculation
Median Percentage of Gross Sales, if rent is
calculated by percent of gross sales:
News, Gift & Specialty Retail - 11.50%
Median Percentage of Gross Sales, if rent is
Calculated by Minimum Annual Guarantee
(MAG) or percent gross sales,
whichever is greater:
News, Gift & Specialty Retail - 15.00%
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Median Total Rent per Square Foot
Overall the median total rent per square foot is $66.07 for Food and Beverage, meanwhile the
median total rent per square foot for News, Gift and Specialty Retail is $93.68. Across all hub sizes
News, Gift and Specialty retail has a higher median rent per square foot.
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Rent Percent of Gross Sales
News, Gift and Specialty Retail have a higher rent percentage of gross sales across all hub
sizes, with the exception of Non-Hub airports. The average rent, 12.3% of gross sales relates to
Food and Beverage, while News, Gift and specialty Retail account for 15.0% based on rent as
percentage of gross sales.
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Concessions Contract Length
The most common length of all airport concessions contract is 10 years.
The median length of contacts for Food & Beverage:
Fast Food/Quick-Service – 10 Years
Sit Down/Casual/Bar – 10 Years
Specialty Coffee – 10 Years
The maximum length for Food & Beverage contracts is 30 years, while the
minimum length is 5 years.
The median length of contacts for News, Gift and Specialty Retail:
News & Gift – 9 Years
Specialty Retail – 7 Years
Other – 7 Years
The maximum length for News, Gift and Specialty Retail contracts is 33 years,
while the minimum length is 1 year.
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Percent of Gross Sales Breakdown By Category
Food & Beverage News, Gift and
Specialty Retail
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Carts/Kiosk Program
Food & BeverageNews, Gift & Specialty
Retail
Presence at the airport 32% Yes 43% Yes
Status
47% Permanent
32% Temporary
21% Both
63% Permanent
15% Temporary
22% Both
Automated Retail Program
41% Yes (43 airports)
Median – 2 units per
airport
Management
Master Concessionaire/Prime Operator operates
them directly
Airport leases directly to vendor(s)
Master Concessionaire/Prime Operator/Developer
leases directly to vendor(s)
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Concessions Branding
Airport Brand/Non Brand - A generic brand relative only to the airport.
Local/Regional Brand - A brand that is developed, distributed and promoted within a
defined geographical area.
National/International Brand - A brand that is marketed and distributed
nationally/internationally.
Food & Beverage News, Gift and Specialty Retail
Note: 2011 Concessions Benchmarking Survey – Food and Beverage Concessions Branding
(Airport Brand/Non Brand: 17%) (Local/Regional Brand: 41%) (National/International Brand: 42%)
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Commercial Management
Operations and Programs
2012 ACI-NA Concessions Benchmarking Survey November, 2012
25
Concessions Planning
The most common method of soliciting and awarding concessions contract is Request for
Proposals (RFPs). However, many airports often use a mixture of methods. The ‘other’ method
included Request for Letters of Interest (RLI). In addition, 43% of airports require minimum
staffing levels in concession agreement, while 80% of airports define & control product lines
sold.
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Concessions Marketing Program
67% of participating airports have a marketing program for airport concessions.
87% of these airports collect a concessions marketing fee.
The majority of airports calculate their concession marketing cost by a percent of
gross revenue to the airport.
Top 3 in-kind services airports contribute to the marketing of the concessions
program:
In-terminal advertising
Market research
Marketing materials preparation/printing/distribution
Top 5 items airports spend marketing funds on:
Customer service training
In terminal advertising (CNN monitors, etc.)
Marketing materials preparation/printing/distribution
Shopper service (mystery shopping/award)
Social Media
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Customer Satisfaction/Monitoring Programs
Note: Included separate airport responses, from airports with different terminal management (i.e. PANYNJ – JFK Terminal 5)
Airports use a variety of customer satisfaction/monitoring programs for concessionaires. The
most common include frequent meetings with concessionaires, website feedback, customer
comment cards and more recently social media.
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Operational/Performance Audits
All 98 respondents perform operational/ performance audits. While 85% of respondents conduct
operational/performance audits in house. In addition, 49% of airports have fines tied to these
audits for non-compliance.
Note: Included separate airport responses, from airports with different terminal management (i.e. PANYNJ – JFK Terminal 5)
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Pricing Methodologies
The majority of airports use Street Plus and Street Pricing Methodologies. These two pricing
methodologies account for 86% of responding airports. Only 8 airports have no comparison,
and these airports are small or non-hub airports. Often either Street Pricing or Street Plus
Pricing methodologies are used in conjunction with comparison to other airports based on
airports size, or geographical location.
Note: Included separate airport responses, from airports with different terminal management (i.e. PANYNJ – JFK Terminal 5)
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Airport Mobile Applications
33% (32 out of 98) of airports have a
mobile application.
The most common method the mobile
app was developed include:
Joint (Airport & Third Party) – 50%
Third Party – 44%
Airport – 6%
73% (23 out of 32) of airports promote
concessions offerings through the
airport mobile app.
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Central Distribution Center
Central Distribution Center - Is defined as a location for the receipt, staging, and
handling of most goods and supplies delivered to the airport and the distribution of
the goods and supplies to all concessionaires, other tenants, and Aviation
Departments, as deemed appropriate whether operated by airport third party tenant
or other.
Only 18 out of 98 airports have a
Central Distribution Center.
Meanwhile all airports have recycling
program for airport concessions
Airport – 57%
Tenant – 4%
Both Airport & Tenant – 39%
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Common Area Maintenance Charge
Food & Beverage Concessionaires
Note: Included separate airport responses, from airports with different terminal management (i.e. PANYNJ – JFK Terminal 5)
Common Area Maintenance Charges
are paid to the airport or to another
concessionaire as reimbursement for the
maintenance of common (shared) areas,
such as food courts.
A large number of airports/terminals levies
a Common Area Maintenance charge on
food and beverage concessionaire(s).
The most common charge is for Janitorial
services that accounts for 32% of total
airports/terminals that levies this charge.
Other Common Area Maintenance
charges include Utilities, Repairs and
Lighting.
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Refurbishment Requirements
Most commonly all agreements have mid-terms refurbishment requirements, particularly for
Food and Beverage. Airports prefer mid-term requirements rather than annual refurbishment
requirements for Food & Beverage and New, Gift and Specialty Retail.
Note: Included separate airport responses, from airports with different terminal management (i.e. PANYNJ – JFK Terminal 5)
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Closing Remarks
Use survey data with caution.
Choose your peers for comparison based on a number of factors such as airports size,
hub status, and geographical location.
When making decisions consider your local situation as well as what is going on
nationally.
All airport participants will have access to the raw data after the conference. Airports
will be able to filter responses for all questions.
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Participating Airports
ATL
BOS
BWI
DCA
DEN
DFW
EWR
FLL
IAD
IAH
JFK
LAS
LAX
LGA
MCO
MDW
MIA
MSP
ORD
PHL
PHX
SAN
SEA
SFO
SLC
TPA
ABQ
ANC
AUS
BNA
BUR
CLE
CMH
CVG
DAL
HOU
IND
MCI
MEM
MKE
OAK
OMA
PBI
PDX
PIT
RDU
RNO
RSW
SAT
SJC
SMF
SNA
ACY
ALB
AUA
BOI
BTR
CHS
COS
DSM
ECP
ELP
GEG
GRR
GSO
GSP
GUM
HSV
ICT
IWA
JAN
LGB
MHT
MSN
OKC
PIE
SAV
SDF
SRQ
TUL
TUS
AVL
JNU
MRY
ROA
YCD
YEG
YHZ
YOW
YQB
YSJ
YUL
YVR
YWG
YXE
YXS
YYC
YYJ
Large Hub
26 Airports
Medium Hub
26 Airports
Small Hub
29 Airports
Non-Hub
4 AirportsCanadian
13 Airports
Note: (*Separate Responses)
EWR – Terminals A&B
EWR – Terminal C
IAH – Terminals A-D
IAH – Terminal E
JFK – Terminal 1
JFK – Terminal 2&3
JFK – Terminal 4
JFK – Terminal 5
JFK – Terminal 7
JFK – Terminal 8
LGA- Terminals A-C
LGA – Terminals D-E
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Definitions
Developer - Airport has agreement with a third party to develop/lease and manage the concessions without operating any directly. Developer invests in facilities directly.
Direct leasing - Airport leases individual locations or small groups of locations (no more than 3) directly with the operators.
Fast Food/Quick Service - Food is served at counters or is pre-prepared for "grab and go." Food may be quickly prepared to order, and may be branded or non-branded.
Fee Manager - Airport has agreement with a third party to develop/lease and manage the concessions without operating any directly. Fee manager does not invest in facilities.
Master concessionaire - Airport leases all food service concessions to a single operator, who may or may not also operate retail. The Master Concessionaire may sublease some of the locations to other operators.
National/International Brand - A brand that is marketed and distributed nationally/internationally.
News/Gift (also referred to as Convenience Retail, Newsstand or Sundries Retail) - A type of Concessions Operation that specializes in the sale of magazines, newspapers and other periodicals, candy, gum, snacks, sundries, magazines, paperback books and souvenirs. Some news/gift stores may sell hardcover books as part of its product mix, but such books are not the primary item offered. Single-serve canned or bottled drinks may also be sold at such locations.
Prime operator - Airport leases packages of locations to two or more operators, each of which has multiple locations (more than 3) within the airport.
Sit Down/Casual/Bar - Typified by table service, although there may be carry-away or "grab and go" components. Food is prepared to order and restaurants of this type often include a bar. Examples include TGIFridays, Carabbas, Outback, Max & Ermas, Chili's, etc.
Specialty Coffee - These venues focus on coffee & may offer other beverages as well along with pastries, bakery items or other light food. The venue may have take away items such as sandwiches & bottled beverages. Includes Starbucks, Seattle’s Best, Peet’s Coffee or a local specialty coffee concept.
Specialty Retail - A type of Concessions Operations that specializes in the sale of a particular category of consumer products such as clothing, sporting goods, electronics, travel accessories, books, leather goods and luggage, souvenirs, lotions and personal care items, and home accessories. Automated retail of good that would generally be sold in specialty retail shops may also be included in this category; may be individual locations or small "stores-within-a-store" that are accounted for separately from the larger location. Stand-alone bookstores should be included as specialty retail.
Total Rent - Consideration received by the airport for the right to operate at your airport, not including fees paid for parking, security badging, deliveries, marketing, etc.
2012 ACI-NA Concessions Benchmarking Survey November, 2012
Contact:
Economic Affairs and Research
Tel: 202-293-8500
Email: [email protected]
www.aci-na.org