Food and Beverage and Retail Operators: The Costs of Doing Business at Airports

The layers of complexity and associated costs of operating a restaurant or shop in an airport are factors that prospective concessionaires need fully to comprehend in order to judge the potential for success and profitability of business opportunities. The airport operator typically does not have readily available information regarding the cost of doing business to provide to non-airline tenants, so that a prospective tenant can understand and forecast its operating costs at the airport and to judge the potential for success and profitability. The objective of this synthesis is to compile practices of airports in communicating information and to improve the communication of cost data from airports to retail and food and beverage concessions operators regarding the total cost of doing business at airports. Information used in this study was acquired through a review of the literature and interviews with a sample of 15 small, medium, and large-hub airports employing varying concession management structures. Findings indicate a general uniformity in the categories of costs that airports communicate to prospective concessionaires, with significant nuance and detail based on the airport’s unique operating standards and requirements. The most consistently cited costs based on the airport respondents: comprehensive general liability insurance, worker’s compensation insurance, performance bonds, badging fees, fingerprinting application fees, and employee parking. While cost categories were consistent, not all airports assess the same types of charges and costs. Moreover, there is not one consistent method that airports employ to communicate operating costs, nor is there any specific document or documents dedicated to listing costs that concessionaires are required to pay to operate at the airport. All 15 airports surveyed reported that they communicate operating costs in the lease agreement: 12 during the request for proposals (RFP) process, six through airport rates and charges lists, four during tenant meetings, three using tenant handbooks, and two through RFP outreach/ pre-proposal conferences. Reviewing an airport’s library of the documents mentioned previously, assessing how much concessionaire business cost information is contained within the documents available, reviewing how these documents are currently presented to concessions operators, and determining other potential avenues for distribution were determined to be key in developing an action plan for airport management staff to maximize the airport’s communication efforts.

Language

  • English

Media Info

  • Media Type: Print
  • Features: Appendices; Bibliography; Figures; Glossary; References; Tables;
  • Pagination: 150p
  • Serial:
  • Publication flags:

    Open Access (libre)

Subject/Index Terms

Filing Info

  • Accession Number: 01643131
  • Record Type: Publication
  • ISBN: 9780309390057
  • Report/Paper Numbers: Project A11-03, Topic S01-13
  • Files: TRIS, TRB, ATRI
  • Created Date: Aug 8 2017 9:02AM