Seeks to Tell the Full Story About Benefits of Developer Model
PITTSBURGH, May 18, 2011 – AIRMALL® USA, developer of the leading airport concessions model in North America, is once again underscoring the documented success of that model and the value it brings to key stakeholders that include airport authorities and the traveling public. At the same time, Mark Knight, president of AIRMALL USA, is once again taking issue with Airport Group, the policy arm of UNITE HERE, which recently issued another review of the developer model for airport concessions.
“Discussion and dialogue on important issues can be valuable, but only when the whole story is being presented. Simply stated, UNITE HERE is only interested in presenting a skewed view of our model for airport concessions so that they can serve their own agenda” said Knight. “At AIRMALL USA, we find this to be disingenuous and misleading. We owe it to our business partners, the industry in general, and the traveling passenger to set the record straight and present the entire story, and we will continue to do so.”
AIRMALL USA manages and develops the retail, food and beverage concessions at Pittsburgh International Airport (PIT), Boston Logan International Airport (BOS) in Terminals B and E, Baltimore/Washington International Thurgood Marshall Airport (BWI), and Cleveland Hopkins International Airport (CLE). Founded in 1992 at Pittsburgh International Airport, the AIRMALL model has posted some of the highest per-passenger spends in North America over the past two decades and has won numerous awards for innovation and customer service.
“UNITE HERE did get one thing right in their recent ‘study’ of our model,” Knight continued. “AIRMALL USA has consistently increased per-passenger spend at the four airports where we develop and manage concessions. It’s a sign that the traveling public sees quality, choice and value in the array of shops and restaurants that are part of our program.”
A look at the statistics reveals AIRMALL’s success in this area:
- At Pittsburgh International Airport, AIRMALL USA inherited a master concessionaire’s model when it began developing and managing concessions for the airport in 1992. Based on 2010 figures, sales per enplanement have risen by 400 percent (from $2.69 to $13.45) since the program’s inception.
- At Boston Logan International Airport, AIRMALL USA began developing concessions in terminals B & E in 1999, taking over from a master concessionaire. As of 2010, sales per passenger had risen during that period by 149 percent (from $4.87 to $12.15).
- At Baltimore/Washington International Thurgood Marshall Airport, the final year for the master concessionaire that preceded AIRMALL USA was 2003. Based on 2010 figures, sales per enplanement have gone up by 61 percent (from $5.47 to $8.81).
- The new AIRMALL at Cleveland Hopkins International Airport is AIRMALL USA’s latest project. Substantially completed in 2010, the new AIRMALL replaced a master concessionaire model starting in 2008. Since that time, sales per passenger have risen by 30 percent (from $5.59 to $7.28).
“While it is a critical component of our success, a dramatic increase in sales per passenger is only one of the value propositions we bring to the airport authority as a concessions partner. It also represents only part of the equation when studying what the airport authority receives in return for partnering with a developer such as AIRMALL,” Knight continued. “With every one of our projects, AIRMALL has made a significant investment in the permanent infrastructure of the airports we serve so that we can improve amenities, update the facility and ultimately enhance the passenger experience. This saves our airport partners from having to invest millions of dollars to make similar improvements. Quite simply, this cannot be overlooked when it comes to what a developer brings to the table.”
Knight pointed to two recent examples:
- At Boston Logan International Airport, AIRMALL USA invested $8 million dollars in 2008 to transform what was once a roof of the terminal into an entirely new retail core with 20 additional concessions units – specialty retail, restaurants and bars, fast-casual/snack units, specialty services, and news/gift units. In this way, the project transformed what was an empty space into a revenue-generating initiative at a fraction of what it would have cost to build a new terminal. The comprehensive development also incorporated improvements to security, seating, customer flow and restrooms, and was executed while the terminal remained open.
- Beginning in 2008, AIRMALL USA invested $8.4 million to transform the concessions program at Cleveland Hopkins International Airport into a new AIRMALL. The development has brought a new face to the terminal and has included permanent improvements to the building’s infrastructure.
“As a full-service developer, we also absorb other costs that an airport authority would normally need to cover. For example, we collect tenant fees apart from rent to manage distribution facilities, handle common-area maintenance, and execute an airport-wide marketing program designed to support concessions sales,” Knight added. “Collectively, this saves the airport millions of dollars on an annual basis. When you add these savings to the baseline rent revenue the airport receives from a developer such as AIRMALL, that revenue figure can rise by as much as 50 percent.”
In March, AIRMALL USA received a host of accolades for exceptional design and management during the Airport Revenue News (ARN) 2011 Revenue Conference & Exhibition. The awards include Best Store Design, Best Restaurant Design, and Best Concessions Management Team.