concessions program overview scott kilgo 2005

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General Overview of the Concessions Program at Portland International Airport

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PDX Concessions Program Update

Scott Kilgo

Outline

• Concessions overview• Why our program is

different• Tenants and selection• Our customers• Future developments

Concessions Overview• Growing success for more than 16 years

• Program vision – Broad mix of quality local products– High quality store design and merchandising standards– Provide a great customer experience– Pricing that is the same as other locations– NW theme throughout the program

• Experience mirrors best in our region

• Nationally recognized as an industry leader and innovator

Concessions Overview

• 60 stores, restaurants, news stands

• Local concepts are an advantage

• 60% of our stores and restaurants are local concepts

• Full service bank, Hair salon and other passenger services

• Balance between before and after security

• Locations open 365 days a year

• Many are open 16 hours a day

• 40,000 customers each day

Concessions Overview

• Just over 13.5M passengers last year

• Exceeded $56M in sales last year

• $8M in revenue to reduce airline costs

• Sales levels stand out when compared to other airport or mall programs – $8.45 per boarded passenger; or – $1,200 per square foot

Why is our program different?

Direct Leasing vs. Master Concessionaire•Direct leasing

– Leasing with individual tenants. – Portland

•60 locations with almost 30 different tenants. •Results in higher sales; $8.45 per boarding passenger

•Master Concessionaire– Lease major portions of the program to a single or few

tenants. – Seattle

•Few tenants with most of 70 locations.•Results are lower sales; $6.02 per boarding passenger

Proactive Operations

Direct relationship with tenants Proactive training with

management staff Working with our tenants

every day Monthly Manager Meetings Mystery Shop and Dine

Program Associate of the Month

Contest

Marketing and Themed Events Program 3 major events 4 special events Entertainment Activities Special Product Offerings Coordinated Sales and

Specials

Our Tenants and Selection

Coffee and Pastries• Coffee People, Starbucks and

Marsee Baking

• $6.3M in sales last year

• 40 % of passengers buy coffee every time they are at PDX

Sit Down Dining • Gustav’s, Capers Cafe,

Sandoval’s Margarita Bar

• Rose City Café and Stanford’s

• Before security locations

• $12.6 in sales last year

• Significant increase this year

• Demand Continues to grow

Food Counter Service• Pizza Schmizza, Good Dog,

Sandoval’s Fresh Mexican, Riverfront Café

• Panda Express, Wendy’s

• $9.3M last year

• Demand Continues to grow

Magazines and Newspapers• Your Northwest Travel Mart

and Hudson News• $6M in magazine and paper

sales

• Travel Mart innovation from PDX

Products from our region• Made In Oregon, Oregon

Pendleton and Your North West Travel Mart

• Broad selection of quality products

• $6M in sales last year

New and Used Books

• Powell’s Books, Travel Mart and Hudson

• $3.9M in sales last year

• 10% books at Powell’s used or discounted

Clothing, Footwear and Accessories• Nike and Norm Thompson

• $2.9M in sales last year

• Norm Thompson at PDX

Arts and Crafts Gallery• Real Mother Goose Gallery

• Glass, jewelry, ceramics, fine wood, furniture and clothing

• Show case for Local artisans

Blackboard Chickensby Chicken Coup

Passenger Services•Full service bank

•RelaxStation Salon

•Free WiFi

•Service Centers with desks

Who are our typical customers?

We know our customers better than any other airport

How we know our customers•Conductive regular surveys for years•Listen to our tenants that have the most interaction; and

•Watch sales by day at all 60 locations

Why this is important•Make better decisions•Generates higher sales from happy customers

I would like to introduce our three typical customers…

Ms. Jane Traveler

– Flies 4 times a year

– Spends 90 minutes in terminal

– Strong preference for local concepts

– Prefers sandwich and bakery concepts

– Values a quick purchase

– Pricing is important

– More likely than men to shop retail, particularly pre-security

Mr. John Traveler

– Flies 4 times a year

– Spends 90 minutes in terminal

– Strong preference for local concepts

– Quick affordable purchase

– Likely to use the free WiFi

– Will purchase food or beverage, especially at sit-down restaurants

Ms. Judy Meeter

– Parks in the garage

– Is usually accompanied in terminal

– Spend less than 60 minutes in terminal

– Strong preference for local concepts

– Makes a purchase

– Appreciates things to do in terminal

– Looks for the pre-security stores

Looking to the future

Our Approach to the future– Continue Vision

– Direct leasing and proactive operations methods

– Great current and prospective tenants

– Listen to customers and tenants to make the best decisions

– Make changes over the next 3 years to minimize disruption

– Balance of working with existing and new tenants

Improvements Opportunities

– Older terminal areas after security need to be updated

– Some dated food concepts need to be replaced

– Need additional food and retail locations to meet customer needs after security

– Revisit some operational procedures

During the next three years– Refurbish three older terminal

areas

– Work with current tenants to make some concept improvement at 12 location

– Complete a solicitation process to select some exciting new food concepts

• 4 Sit down cafés with bar service

• 3 Coffee locations• 1 bakery concept• 1 Gourmet Pizza concept• 1 Sandwich, soup and

salad concept

Questions

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