Guide for In-Terminal Airport Concession Programs

Strategies and models for in-terminal airport concessions continue to evolve. Airports have to demonstrate resiliency and use innovative thinking to provide flexibility to concessionaires in a new environment. Escalating capital, labor, and operating costs have strained the existing business model of in-terminal concessions, while e-commerce, digitalization, and changing demand patterns have challenged traditional ways of understanding airport in-terminal concessions. Airports are looking for opportunities and approaches to become more agile and ensure their concessions programs provide a best-in-class experience for passengers while optimizing revenue to help meet rising airport operating costs and ongoing debt and enhance airport financial self-sufficiency. Building a concessions program requires airports to have the data and tools necessary to determine the best concessions models and strategies. The goals of a concessions program include optimizing concessions space, ensuring a balanced concessions mix, reducing barriers of entry, and identifying appropriate contracting and management practices. Research is needed to develop a guide to help airport operators develop and manage their in-terminal concession programs. The objective of this research is to create a guide to help airport operators develop and manage their in-terminal concession programs.  The guide should provide at a minimum: (1) Overview of airport concession industry and recent and emerging trends (e.g., technology, customer behavior). (2) Map of airport concessions-related external stakeholders (e.g., existing and prospective business partners, airlines, customers, labor unions, community) and internal stakeholders (e.g., airport departments). (3) Strategies, resources, metrics, and tools (e.g., decision trees, flow charts, checklists) for: (a) Effective stakeholder engagement; (b) Developing a concessions master plan; (c) Receiving and distribution of concessions products, including funding; (d) Selecting concessions business models, including capital investment strategies; (e) Identifying risks/uncertainties that impact concessionaire's profitability (e.g., change in traffic, economic conditions) and setting realistic terms and financial conditions; (f) Reducing barriers to entry for small and local businesses; (g) Optimizing the concessions procurement process; (h) Evaluating and selecting concessions proposals; (i) Contracting (e.g., key business terms and conditions, lease negotiations); (j) Ensuring concessionaires meet or exceed airport environmental, social, and economic sustainability goals; (k) Measuring performance of concessions program and individual concessionaires (e.g., financial, operational, customer satisfaction); (l) Addressing underperforming concessions programs and concessionaires and determining corrective actions; (m) Partnering with concessionaires to promote employee recruitment and retention; and (n) Marketing the concessions program and optimizing revenue (e.g., marketing fee fund). (4) Executive summary. (5) Slide deck (e.g., PowerPoint) highlighting key elements of the guide that can be adapted for a variety of purposes and audiences (e.g., leadership briefings). (6) Representative case study examples.  The guide and tools should be adaptable to airports of varying sizes, governance models, and resource availability.  

• Record URL:
  http://apps.trb.org/cmsfeed/TRBNetProjectDisplay.asp?ProjectID=5578

Language

• English

Project

• Status: Active
• Funding: $499867
• Contract Numbers:

  Project 01-55

• Sponsor Organizations:

  Airport Cooperative Research Program

  Transportation Research Board
  500 Fifth Street, NW
  Washington, DC    20001

  Federal Aviation Administration

  800 Independence Avenue, SW
  Washington, DC  United States  20591
• Project Managers:

  Navarrete, Joseph

• Performing Organizations:

  Unison Consulting

  Chicago, Illinois   
• Principal Investigators:

  Patel, Bhavesh

• Start Date: 20240522
• Expected Completion Date: 20251121
• Actual Completion Date: 0

Subject/Index Terms

• TRT Terms: Airport terminals; Airports; Business models; Concessions; Handbooks; Marketing; Operating costs; Optimization; Revenues; Stakeholders
• Subject Areas: Administration and Management; Aviation; Finance; Operations and Traffic Management; Terminals and Facilities;

Filing Info

• Accession Number: 01889818
• Record Type: Research project
• Source Agency: Transportation Research Board
• Contract Numbers: Project 01-55
• Files: TRB, RIP
• Created Date: Aug 10 2023 9:45AM