Airport Experience® News - ACDBE 2023

ACDBE ISSUE 2023 / V21 N247

THE

ISSUE

PARTNERS SEEK NEW SMALL BIZ TALENT

SMALL PLAYERS WIN BIG CONTRACTS

AIRPORTS EASE PATH FOR CERTIFIED FIRMS

AIRPORTS, AIRLINES BRACE FOR DEMAND BOOM

Award-winning Texas BBQ from Chef Chris Conger, winner of San Antonio’s Best Barbecue.

Legendary menu @ B.O.S.S. Bagel.

Local gifts and an ode to local legend, Adina Emilia De Zavala.

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A haven for the hometown sports fans.

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14 New Blood With data showing the number of active ACDBE-certified firms down, primes have pumped up their outreach efforts. 20 Small Players, Big Contracts ACDBE players can be marginalized in airport programs, but recent years have brought some high profile wins for some well respected operators. 26 Money Problems Financing is a perennial problem for ACDBE operators. While no “magic bullet” solution has come to the fore, airports and select lenders are looking to make things a bit easier. 32 Summertime Strategies Airlines have clawed their way back into the black, but serious challenges remain. With passenger demand high, some are fearful of another chaotic summer travel season.

3 Letter From The Editor 4 Data Check

With more than half of Americans planning to travel this summer, the outlook is strong. Perhaps too strong, some say, as demand is putting stressors on infrastructure and labor. 6 Latest Buzz Louisville Muhammad Ali International Airport is expanding and renovating to serve a growing number of passengers, in a project called SDF Next. 10 Director’s Chair Atif Elkadi, CEO of the Ontario International Airport Authority, is focusing on ease of use and providing an exceptional passenger experience, all while traffic is growing rapidly.

36 Sustainability Snapshot A handful of airports participate in a program to turn used cooking oil from concessionaires into sustainable aviation fuel.

39 Advertising Index 40 Before You Take Off

Second-hand shopping is underway at Helsinki Airport with the launch of what is billed as the first stand-alone vintage store in an airport.

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TEAM

Desiree Hanson Executive Vice President Melissa Montes Vice President/Publisher Carol Ward Editor-in-Chief Jean Claude Chaouloff Business Development Manager

Andrew Tellijohn Senior Reporter Sally Kral Contributing Writer Sarah Beling Contributing Writer

Barbara McCarter Portfolio Manager Chad Wimmer Senior Editorial Art Director Rae Lynn Cooper Production Manager Amanda Gochee Vice President, Marketing Strategy Paige Heady Senior Marketing Manager Tessa Mullins Marketing Coordinator Tristan Lueck Marketing Coordinator

Airport Experience ® News Is a Division of CLARION Events 6421 Congress Ave., Suite 107 Boca Raton, FL 33487 Phone 561.257.1026 Fax 561.228.0882 To subscribe visit https://airportxnews.com/subscribe/ ISSN: 1948-4445 Russell Wilcox Executive Chairman Lisa Hannant Chief Executive Officer, Clarion Events Greg Topalian President and Chief Executive Officer Clarion Events North America Copyright © 2023 Airport Experience ® News, all rights reserved. Any reproduction of this magazine is strictly forbidden without prior permission from Airport Experience ® News.

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ACDBE ISSUE 2023

Dear Readers,

ACDBE ISSUE 2023 / V21 N247

It’s difficult to believe that we’re already entering the summer travel season. Thus far, the year’s vibrant traveler numbers are underscoring the fact that the pandemic is fully in the rear-view mirror. With demand coming back strong, airports are pushing ahead with terminal expansions and refurbishments. Concessionaires are building out new locations or improving existing ones. All the activity brings new and welcome vitality to the airport concessions business. The current issue of Airport Experience News is all about the small businesses that help create the dynamic, local experiences in airports across the country. In this issue we offer articles on some of the most successful ACDBE-certified firms and their strategies for success; on ways concessionaires are connecting with small, local companies to further enhance the traveler experience; and on airports that have altered their leasing strategies to ensure small players can get a proverbial foot in the door. This coverage leads into the annual Airport Minority Advisory Council conference in June, one of three industry conferences dotting the June schedules of airport and concessions professionals throughout North America. We look forward to connecting with all of you at the various events. Looking ahead, AXN is bringing back the summer Food & Beverage issue! In that issue – due out in mid-July – we’ll delve into topics including the future of airport fine dining and menu strategies for profit optimization, and we’ll put a spotlight on some of the industry’s most dynamic bars. A big thank you to all our readers and advertisers who are crucial to our ongoing efforts to connect the industry. We appreciate the continuing support and hope you enjoy this spring issue of AXN!

THE

ISSUE

PARTNERS SEEK NEW SMALL BIZ TALENT

SMALL PLAYERS WIN BIG CONTRACTS

AIRPORTS EASE PATH FOR CERTIFIED FIRMS

AIRPORTS, AIRLINES BRACE FOR DEMAND BOOM

All the best,

Carol Ward Editor-in-Chief

Airport Experience News carol@airportxnews.com

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DATA CHECK

MEETING DEMAND? Travel Outlook Strong But System Shows Stress

BY C AROL WARD

26% of Americans plan to increase the amount they are spending on leisure travel in the next three months.

60% of survey respondents

Only 32% of recent air travelers are very satisfied with the air travel experience.

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agree that taking time off to travel is more important than ever.

35% of Americans who have traveled by air for leisure in the past 12 months reported having a flight delayed or cancelled.

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53% of leisure travelers have travel planned in the next six months.

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ore than half of all Americans and 81% of leisure travelers have travel planned from April through

More than one-quarter of Americans surveyed plan to increase the amount they are spending on leisure travel as the industry enters the busy summer travel season. And 60% of those surveyed agree that taking time off to travel is more important than ever, U.S. Travel said. However, the outlook is not entirely rosy. Survey respondents also voiced concern about potential aggravations as the air travel system becomes more crowded and unpredictable. Two in five Americans (42%) say they have traveled by air for leisure in the past 12 months and 35% of those reported having a flight delayed or canceled.

Source: U.S. Travel Association/Ipsos

September, according to results of a new travel survey conducted by U.S. Travel Association and Ipsos . The trade group pointed to the vibrancy of the travel sector while also warning of significant stressors that could tax the air travel system this summer. The survey, launched in early 2023 and released in late April, revealed that Americans are eager to travel despite economic uncertainty and challenges within the air travel system, such as flight cancellations and delays, long security checkpoint waits and other inconveniences.

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DATA CHECK

Fewer than one-third of recent air travelers said they are “very satisfied” with the air travel experience. The survey showed that crowding and congestion, along with flight delays or cancellations, are the primary reasons for air travelers’ less than satisfactory experience. More than half of Americans surveyed said they would travel more for leisure in the next six months if the travel experience was not as much of a hassle. System Challenges The mixed results come at a time when the air travel system is under enormous pressure. In late March, the Federal Aviation Administration warned that it anticipates a 45% increase in flight delays at East Coast airports in the summer of 2023, due to a shortage of air traffic In a recent media call announcing the survey results, U.S. Travel Association CEO Geoff Freeman said passengers will likely “confront a very busy experience” when traveling this summer. “They’re going to confront longer lines. I think we should be prepared for that.” controllers and other factors. Airlines have been given a short-term opportunity to give up slots at airports in New York and Washington DC. In a recent media call announcing the survey result s, U.S. Travel Association CEO Geoff Freeman said passengers will likely “confront a very busy experience” when traveling this summer. “They’re going to confront longer lines. I think we should be prepared for that,” he said. The U.S. Travel survey delved into the challenges facing the air travel system. When asked what Congress should prioritize in the FAA reauthorization bill, a majority of recent air travelers

(55%) want Congress to prioritize improvements to the air travel experience by addressing hassles such as reducing f light delays and cancellations (19%), offering more direct flights by addressing the pilot shortage (21%) or reducing congestion in airports (15%). Conversely,

just 36% of recent air travelers want Congress to prioritize providing cash refunds or indefinite credits when flight delays or cancellations occur. One-third of survey respondents said they would travel more if Congress made any of those legislative changes.

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1 ACDBE Certification requirements can be found on https:/ www.ecfr.gov/current/title-49/subtitle-A/part-23. 2 Must be Airport Concessions Disadvantaged Business Enterprise (ACDBE) certified and meet all other eligibility requirements for financing. Offer does not apply to any other fees or costs charged in connection with the loan, which may include, without limitation, guaranty fees, other third-party fees, etc. Offer valid through 7/31/2023. Credit is subject to approval. Rates and programs are subject to change; certain restrictions apply. Terms and conditions subject to commitment letter. | ©2023 B.S.D. Capital, Inc. dba Lendistry. All rights reserved. Loans are made pursuant to state law and may not be available in all states. | California residents: Loans made or arranged pursuant to a California Finance Law license. B.S.D. Capital, Inc. dba Lendistry California Finance Lender, License #60DBO-66872. NMLS# 1945565

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LATEST BUZZ

NEXT-LEVEL PROGRESS Record-High Passenger Levels Prompted SDF’s $800M Upgrade

BY SARAH BEL ING

oui svi l le Muhammad Al i International Airport (SDF) is in the midst of a massive

Af ter the SDF team completed concessions-related renovations in 2015 and 2016, they decided to take a holistic look at the airport’s growth, says SDF executive director Dan Mann. Even accounting for pandemic-related shutdowns, traveler numbers have expanded rapidly. “We’re shattering the previous all-time record from 2019,” says Mann, “and we’ll likely have more [Kentucky] Derby-related traffic than we’ve ever had before. We’re looking really good for 2023.” In anticipation of the area’s ever-expanding bourbon and Derby-related tourism - SDF has also added 18 new routes to its schedule since 2018 -

Above: As part of the SDF Next Program, the new Signature Louisville Project was unveiled in the pedestrian access tunnels to the rental car facility at SDF.

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transformation. The $800 million project, entitled SDF Next, is expected to be completed in 2025 and includes back-of house upgrades like the country’s largest airport geothermal system, a new airport operations and command center and expanded infrastructure capacity for the hub’s busy cargo sector. Customer-centric changes include an expanded parking lot, wayfinding areas, baggage claim, terminal upgrades, restrooms, exterior redesign, security checkpoints and ticketing centers.

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partner with

PASSION

spotlighton

ElliottThreatt

Eachyearonhisbirthday, ElliottThreattpays it forwardbybuyingmeals for those inneed, throwingpizzaparties for thestaffof communityorganizations, andmakinghisspecial dayaboutgivingtoothers. AsanSSPAmerica partner atDaneCountyRegional Airport, Eastern IowaAirport, andMinneapolis-St. Paul International Airport, Elliott isanoutstandingexampleof the joint venturepartnersweteamupwith. Our joint venturepartnersare incredible business leaderswhomakesignificant contributions totheir local communities, aswell asourSSPAmerica operations, culture, andsuccess. In recognitionof hisexceptional efforts, Elliottwashonoredas thewinnerofour 2022PartnerPASSIONAward. Inaddition tobeingawell-known residentofSt. Paul,Minnesota, Elliottisalsoa Grammynominatedcomedianandan inspiration tousall.

L ATES T BUZ Z

Mann and his team decided that a major overhaul of the airport’s infrastructure was needed to stay current. “We started with necessities,” said Mann, “and then as we started digging into what this could look like, we thought, ‘Well, we really need to have state-of-the-art facilities.’” In 2018, SDF drafted the team at architecture firm Alliiance , which worked with SDF on the 2015/2016 upgrades, to oversee a large-scale redesign of the airport’s passenger terminal areas. The assignment also called for the development of a more authentic Louisville experience for travelers passing through. “A lot of airports are very sterile — you can’t tell where you are and it’s very bland, and in some ways that’s what Louisville was,” says Alliiance Principal

Eric Peterson of the redesign process. “The Louisville mayor [then Greg Fischer] made a strong point that we should aim to make the Louisville airport more memorable. “We felt that having different voices represented was key to the project, so we held several facilitated workshops, where we had members of the community, representatives from the mayor’s office, and representatives from the airport board help us identify all these different threads that make Louisville such a rich place,” Peterson says. In Louisville’s case, the Ohio River, Kentucky Derby-related hospitality, and a multitude of bourbon distilleries provide good fodder for creating a sense of place. Architects also drew on the city’s industrial legacy as a center of manufacturing for the likes of the Ford Motor Company, Hillerich & Bradsby Sporting Goods (home to the Louisville Slugger baseball bat), General Electric and a majority of the world’s disco balls via maker Omega Products .

“This element of ‘duality’ came up,” explains Peterson. “We had many conversations about how we’re not really the South, we’re not really the Midwest. We are kind of in the South, we are kind of the Midwest,” he said. “We’re kind of a big city, but we’re not really a big city. We’re kind of a small town, but we’re not a small town. These conversations carried through what kind of story we wanted to focus on. “The goal is not to do something that’s Disneyland-esque or over the top,” adds Peterson. “A lot of times, when people talk about a ‘sense of place’ in airports, there’s one singular iconic gesture. We are trying to go for something that would be more authentic, wouldn’t change too much with trends, and could be interpreted architecturally and overtly in their communications.” Alliiance’s workshops yielded SDF the phrase “Distilling Great Experiences” as their North Star, which the team applied to both the interior design concepts using locally significant materials as well as the installation of elements like iconic

Below: SDF’s security checkpoint upgrade and

expansion includes high-tech innovations like electrochromic glass panels that work in tandem with the airport’s geothermal system

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L ATES T BUZ Z

Right: An exterior redesign is part of the $800 million SDF Next program

Left: In 2021, SDF broke ground on a geothermal system. Once completed, the system is expected to cut carbon emissions by 80% and use 40% less energy than the airport’s legacy heating and cooling system

carbon emissions by 80% and use 40% less energy than the airport’s legacy heating and cooling system, saving $400,000 a year in operating costs. “It saves money and cuts emissions,” says Mann, “but it’s also really efficient to maintain the life of the systems longer.”With the completion of the geothermal system, SDF will be able to remove its space-hogging legacy HVAC units and make room for more parking and de-icing facilities, which Mann notes is “a win-win on every level.” Also in progress are customer centric upgrades to the TSA security checkpoint, which include high-tech innovations like electrochromic glass panels that work in tandem with the airport’s geothermal system. The airport is also upgrading restrooms. “That’s a really important space for passengers,” says McClimon, adding, “everybody gets off the plane and that’s where they go first.” Finally, extended runways and taxi areas are also in the works to better serve SDF as the third-busiest cargo hub in the United States. “UPS was really involved in our master planning process,” says Mann, adding that “everything we look at for cargo is about how to become more efficient.”

Louisville landmark photographs. Photos are incorporated into the pedestrian access tunnels to the rental car facility. “One of the college teams came through SDF, and they stopped and hovered around one of the images [we installed],” says Alliiance project designer Michael McClimon. “They were pointing at it and talking about the photo, and I think that’s an example of these really nice moments of we have of connecting with people with Louisville stories.” Mann adds that in looking to distill great travel experiences, SDF andAlliiance also took

inspiration from other airports like Portland International Airport (PDX) for the airport operations command center, as well Boise Airport (BOI), Indianapolis International Airport (IND) and Nashville International Airport (BNA), “and we adopted those lessons to our model,” says Mann. One of the key priorities SDF took from other airports was a focus on upgrading sustainability across facilities, deciding to build a geothermal system of 648 wells as a means for reducing emissions and the hub’s energy spend. Once completed, the geothermal system is expected to cut

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DIRECTOR’S CHAIR

S O C AL SUCCESS Ontario International Is Setting Records In California’s Inland Empire

BY C AROL WARD

ditor’s Note: Ontario International Airport (ONT) is located about 35 miles east of downtown Los Angeles. Operated for many years by Los Angeles World Airports , in November 2016, airport ownership was transferred from Los Angeles to a joint authority of the city of Ontario and San Bernardino County. Rapid growth ensued, and by 2018 ONT was one of the fastest growing airports in the U.S. Now, post-pandemic, ONT remains in a strong growth phase with volume exceeding 2019 levels. In 2022, the airport served 5.7 million passengers. Atif Elkadi was named CEO of the Ontario International Airport Authority in March 2022. In a conversation with AXN’s Carol Ward, Elkadi outlined his vision for the airport going forward. E

WARD: It’s been roughly six years since Ontario International Airport separated from Los Angeles World Airports. Since then, the airport has experienced massive growth. Can you walk me through that journey? ELKADI: The transfer happened November 1, 2016 and I started as a senior director of marketing in November 2017. Our Board of Commissioners has done a great job in just being very clear about what their vision is and what they want the airport to accomplish for the community. Our focus has been maintaining our easy-in, easy out experience and providing different amenities that hadn’t been available at the airport, and also providing the different options for flights for the community. We’re really focusing on our people - the people that work here and our partners. In the past you would see stores shuttered or maybe open just a couple of hours. Now we have an Urban Crave. We have a Chick-fil-A that’s about to open. We have a brewery and we’ve got a lot of new things to provide to our guests for them to be able to enjoy the airport. Also, cargo has always been a staple of this airport, but we really helped kind of take it to the next level by introducing a new facility for FedEx that they built, which was approximately $350 million that opened in November of 2020. Amazon and its Prime Air really saw a lot of growth during that time.

WARD: You’ve been CEO since March 2022. What are your key goals as you manage this post-pandemic, high-growth phase of the airport? ELKADI: For me, it’s really important to make sure that we implement and really accomplish the goals the board has set out. That entails continuing to grow the options for travel domestically and internationally, continuing to add different elements to the customer experience and really focusing on our people and growing our culture internally. We’re now considered to be a medium hub. People need to understand that we’re not an alternative to other airports in Southern California; we’re actually a great option as a gateway into Southern California. WARD: You mentioned the board’s goal of having an easy-in, easy-out airport. Is that becoming more difficult as passenger numbers rise? ELKADI: No. Having that goal has really prepared us to do the proper planning and put the proper things in place to make sure that we don’t have the congestion that you might see at other places. We’re not seeing a lot of challenges, but we still have work to do because we know the growth will continue. For example, we’re working with the San Bernardino County Transportation Association. They’re working on building a tunnel from the Rancho Cucamonga Metrolink station that will take you directly to the airport. That tunnel will

Above: Atif Elkadi, CEO of the Ontario International Airport Authority.

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Adventure North Minneapolis-St. Paul International Airport

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A Global Leader in Hospitality and Entertainment DelawareNorth.com | For new business opportunities, please contact April Bivens at abivens@delawarenorth.com, Jason Ricko at jricko@delawarenorth.com or James Wilson at JWilson2@delawarenorth.com. Delaware North is a global hospitality company that serves guests in airports, premium restaurants, sports venues, national parks, destination resorts and gaming properties across the globe. We use our expertise within a diverse set of industries to activate the potential in yours. The Power of Partnership At Delaware North, we create next-level experiences for today’s travelers. Together with our ACDBE partners, we design airport food, beverage and retail programs that are informed by the local community, respond to every customer need and preference — and continuously reach for soaring new heights.

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DIREC TOR’ S CHA IR

have a vehicle that will bring passengers back and forth. That’s just one aspect. Right now we have under environmental review a new international terminal, a parking structure and a ground transportation center. Our tagline is “So Cal, So Easy,” and we want to make sure that we continue to meet that promise to our customers. WARD: What are you seeing this year in terms of passenger growth: ELKADI: Every month we’ve been anywhere from 7% or more above last year’s numbers. We’re also seeing our airline partners making a lot more seats available. We’re anticipating a very, very busy and exciting summer travel period. WARD: You mentioned a few projects in environmental review. Do you have any major capital projects underway? ELKADI: Our biggest capital project that we’re working on within the terminals is really enhancing our concession space. We just recently partnered with SSP America, who are working with us to enhance our overall concessions program. They’ve added a couple of locations and they’ve got more that they’re working towards in the future. Also, we have Brewery X, a Southern California brewery, opening in Terminal 2. It will feature a Top Golf swing suite that passengers can utilize, so we’ll have a great place to go eat, drink and enjoy the golf. WARD: Is that a SSP America concept or a direct lease? ELKADI: That was a direct negotiation. It’s a little different from the norm because we’re a 50% owner of the brewery in the airport. We’re splitting everything right down the middle with the brewery. We’re confident that Brewery X will be able to handle the operations, but our revenue management team [will be involved]. During COVID, everybody started to look at the concession space a little differently. We want to have skin in the game, and we’re so confident in this being such a hit with our customers that we want to be a part of it. It’s been exciting building the restaurant and working with [the Brewery X team], but at the end of the day we’re still airport operators, we’re not restaurateurs, and we recognize that. If you look at our partnership with SSP, there is no [minimum annual guarantee] involved – it’s strictly a percentage rent deal. We just want to do things differently if it makes sense, and the board has been extremely supportive of us.

Left: One key goal is to keep Ontario International as an easy-in, easy-out airport, an ongoing challenge as traffic continues to grow. Below: With passenger traffic bustling, Ontario International is adding new concessions to meet and exceed traveler expectations.

WARD: You have Hudson as your retail concessionaire. Do you have a MAG on that contract? ELKADI: No, it’s percentage rent as well. The contract was inherited from the previous ownership, but our partnership has been great. They’ve got the ink by Hudson [concept] and then they’re opening up two Evolve stores. WARD: You’ve added lounges as well, correct? ELKADI: Yes, we have two Aspire lounges, one in Terminal 2 and one in Terminal 4. Terminal 2 was our first and is a big hit with our international travelers. We have a direct flight on China Airlines to

Taipei, and the lounge is something those customers truly enjoy. The Terminal 4 lounge is a big hit with our business travelers. WARD: Are there any other developments or new initiatives that you’d like to talk about? ELKADI: One of the great things we did recently is launch this program called ONTPlus. It’s in partnership with TSA. People can go to our website and fill out a form. The receive a QR code on their phone – they can go through security and enjoy waiting for somebody or seeing somebody off, or enjoying any of the restaurants or just being in an airport.

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DIREC TOR’ S CHA IR

Another thing we’ve done very differently is we brought the advertising that we sell in the airport in-house. We’ve been able to almost triple our revenue. The companies that sell advertising in airports do a great job with national brands, but during COVID we pivoted to a focus on local. We’re using a local company called Fuse Advancement. They’ve attracted local car dealerships, local restaurants, local agencies. It has started to create such a buzz that now we’ve got some national brands. We started the program almost two years ago and just this last January, we passed the $2.2 million mark – before (the new contract) our highest [month] was around $500,000. With those partnerships we’ve done experiences. For example, one of our advertisers is Porsche of Ontario. We took one of our hangars and turned it into a Porsche experience. We used the hangar that where they filmed [the movie] Ford vs. Ferrari. That’s the kind of thing we do to be innovative. We’re lucky here that everybody’s been open to it. For me, I believe we’re just barely scratching the surface.

WARD: How many people are taking advantage of ONTPlus, and do you see an impact in your concessions revenue? ELKADI: We launched it in December and we haven’t started to promote it yet. We’re averaging about 3,400 people a month that use it. We haven’t seen a huge impact from a revenue perspective yet, but it’s more about the overall experience we can offer.

Below: Brewery X has a direct lease with ONT. The two entities will split both expenses and profits once the location opens later this year.

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Legacy Retirements, Industry Trends Are Pushing Primes Toward New Partners In Diversity BY ANDREW TELL I JOHN

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When Sheridan Mordue, owner of retail gift shop Hip & Humble , was first approached by executives from Paradies Lagardère about entering the airport industry as a joint venture partner, she wasn’t even sure the two parties existed on the same planet. Mordue now has her flagship location at Salt Lake City International Airport (SLC) and another at Fort Lauderdale-Hollywood International Airport (FLL) with two more coming soon. But it wasn’t an easy sell initially. “I always tell the story of the first time I met with Paradies,” she says. “It was like they were from Mars. I remember going home to my husband and saying, ‘I have no idea what they’re talking about but I’m going to go down this path and when I get red flags, then I’ll turn around.’” So far, so good. The company opened at SLC in 2020. Though she still thinks “it’s a different world,” Mordue says it has been fun and rewarding to have people visit her street locations after seeing the store at the airport. Paradies Lagardère focuses on day-to-day operations but Mordue visits her airport store several days every week and focuses intently on assuring brand

Above: Hip & Humble, a locally owned boutique gift and home goods store in Salt Lake City, debuted at Salt Lake City International Airport in 2020.

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Right: When Sheridan Mordue first talked with Paradies Lagardere about opening Hip & Humble in airports, she thought they were from outer space. Now she has stores in two airports with two more to come soon.

integrity, ensuring she has the right product mix, signage and marketing. “I’m seeing my brand grow and be exposed,” she says. “It’s been a lot of fun for me personally and professionally. And partnering with Paradies has been instrumental.” Manor Operating At LAS Mordue is one of many new players in the Airports Concessions Disadvantage Business Enterprise (ACDBE) space. Operators, airports and others have stepped up efforts in recent years as legacy ACDBE operators approach retirement and in the wake of a 2017 government report. The U.S. Department of Transportation’s Office of the Inspector General released a report showing that the number of existing DBE firms working at the 65 largest airports had decreased by 3 percent and the number of new DBE firms there had decreased by 76 percent between 2012 and 2014. Another newer entrant, Anthony Manor, owner of MB Concessions , entered as a JV partner of HMSHost Corp. at the Shake Shack in Las Vegas McCarran International Airport (LAS) in 2019. Manor’s main job is with the city of Las Vegas, but he’d seen emails from LAS officials about workshops related to airport concessions. He went to his first in 2010 and met Derryl Benton, HMSHost’s executive vice president of business development. He peppered Benton with questions. “I consider myself an entrepreneur,” he says, adding that he became intrigued by concessions when he saw airports selling bottled water for $3. “So, I was just trying to look into opportunities to get into business and trying to figure out how the airport concessions business works.” Benton suggested saving up some capital and getting experience in food services, so Manor got a part-time job working at Jersey Mike’s. He attended another session in 2016, asked more questions and, by 2019, felt ready when the Shake Shack opportunity arose.

He credits Benton and Ron Gomes, outgoing vice president of strategic alliances, for communicating with partners through COVID and always being available for questions. His short-term aspirations are to continue helping operate Shake Shack. As he approaches retirement from his city position, he’s open to expanding his efforts in airports. “I absolutely want to grow,” he says. “The business has been successful. … I’m looking to see how many other opportunities I can grow this into.”

Stepping Up Efforts HMSHost has long been focused on increasing ACDBE participation and it has upped that focus since the OIG report came out, Gomes says. “We took that pretty seriously,” he says. “Since that time, pretty much any RFP we’re chasing, we’ve tried to include at least one new ACDBE in the program.” HMSHost has hired long-time industry and Federal Aviation Administration diversity insider Shelby Scales as his replacement and Devon Ray as director of

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Right: Anthony Manor, owner of MB Concessions, partnered with HMSHost Corp. to open Shake Shack at Las Vegas Harry Reid International Airport in 2019.

strategic alliances. They intend to maintain and increase the efforts. Whereas Gomes says he was working the market on a solicitation-by-solicitation basis, Scales and Ray intend to try to get ahead of the contracts. Scales adds that HMSHost tries to be market specific about bringing in potential partners. After that, the company looks at its own brand standards and quality. In addition to focusing on ACDBE partners, the company looks for other small- and women-owned businesses. “I see more airports asking us to do that, to consider the small businesses within their communities, not even necessarily ACDBEs,” she says, adding that studying a market’s entire ecosystem helps HMSHost keep its offerings fresh and relevant. A lot of it comes down to traveling to the individual markets, talking to local business organizations and hyper-focusing on what’s trendy, hot and new. The company also communicates regularly with airport officials to see who has approached them about getting into business there. “Can we bring in new concepts? Can we bring in new brands that meet the needs of that particular marketplace,” Scales says.

“Part of the strategy is boots on the ground and going to research the marketplace.” Part Of The Culture Encouraging diversity within an airport’s concessions has been a part of the culture at SSP America dating back well before the OIG report, says Pat Murray, senior vice president of business development. “We’ve always had a goal of bringing in new people because the nature of the ACDBE program is to provide opportunity for new business,” he says. In many cities, like Houston, Atlanta, Los Angeles, Dallas and Chicago, that’s easier because of larger numbers of opportunities and more potential partners, he says. But there are opportunities to partner with companies in any market, Murray says, noting that of the entire population of restaurant owners, the percentage currently certified is miniscule. “There is a huge pool of people who aren’t,” he says. Murray talks weekly with Heather Barry, the company’s vice president of strategic partnerships, discussing partnership progress city by city. In each of those cities, company officials seek out municipally connected people who know the restaurant business to help find the right potential

Above: Airports have been asking for not only more ACDBE operators but small- and women-owned businesses, as well, notes Shelby Scales, who will replace Ron Gomes at HMSHost.

Above: HMSHost Corp. stepped up its recruitment of new ACDBE entrants after the U.S. DOT’s OIG noted a decrease in the number of participants, says Ron Gomes, outgoing vice president of strategic alliances.

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partners. They look for locations that are iconic in the community due to the food style or the people who patronize them. Upon finding them, SSP talks with them about the ACDBE program. If they are interested, the company connects them with industry consultant Kimberly Griffin to help with the certification process. “Generally, a restaurateur in any part of America who happens to be a minority wouldn’t necessarily think, ‘Gosh, I want to be an airport concessions disadvantaged business enterprise,’” he quipped. “They don’t know what it is and then getting certified is difficult, as well.” Hudson Utilizes “ICE” Model Officials at Hudson acknowledge the shortage of ACDBE-certified businesses in the industry, but attribute that to a lack of widespread knowledge of the program. “It is extremely important to get new ACDBE partners while growing our existing partners simultaneously,” says Bridget Biagas, vice president for partner relations and business diversity at Hudson. “Our goal is to involve both new and experienced ACDBE-certified

partners in joint ventures as an extension of our mentoring process.” Hudson mentors partners by providing the necessary tools for success at the airport, including connecting partners with each of the airport’s departments, communicating financial responsibilities, regular communication, regular joint venture meetings and participation in annual in-person town hall sessions and the Hudson Vendor Show & Management Seminar. So, how does the company identify potential new partners? In addition to hosting its own local outreach events to connect with small businesses, the company has created what it calls its “ICE” model. ICE stands for identify, communicate and empower. That encompasses engaging local communities to foster connections and creating opportunities by activating the community. “Imagine a small business owner telling their supporters about an opportunity to be a joint venture partner at the local airport or that their products will be sold in Hudson stores,” she says. “The interest in supporting increases as a result.” Additionally, as part of the company’s long-term Destination 2027 strategy aimed at revolutionizing the travel retail experience, Hudson has committed to expanding its brand portfolio, including the addition of locally sourced products and increasing digital touchpoints to speed travelers’ journeys. “In order to accomplish this, we need to continue to engage entrepreneurs and promote awareness of the airport concessions program,” Biagas says. “Our aim is to collaborate with the community and minority-, women-owned and disadvantaged business enterprises to showcase their business acumen, unique product offerings and extensive skills to the traveling community.” Market Challenges Convincing companies to enter the ACDBE program has always involved challenges. It became more difficult as the industry cratered during the COVID-19 pandemic and some longer-term players exited the concessions world. But as delayed capital improvement programs come back on board, there’s now a glut of projects taking place, meaning it’s a good time for new and existing companies

Above: With a lot of pandemic deferred projects coming back, it’s an opportune time for new and existing ACDBE participants to enter the industry or grow, says Marlene Coleman, director of strategic partnerships at Areas USA.

to try to get into airports and grow, says Marlene Coleman, director of strategic alliances with Areas USA and former director of concession management at Hartsfield-Jackson Atlanta International Airport (ATL) . That’s not to say it will be easy. The pandemic has left an industry seeing an uneven recovery. Supply chain and labor shortages exacerbate a concessions landscape that was already challenged by high buildout costs. Throw on the ACDBE-specific challenges of finding financing and getting certified, and there are significant obstacles. Coleman says Areas, like all operators, is looking for innovative ways to court new ACDBE players, helping them with certifications and preparation. It’s also an opportunity, she adds, for small companies that have wanted to expand to other airports to do so. “There’s a wealth of opportunities,” she says. They need to stay on top of what is happening in the industry, attend conferences and be ready. “It’s just a matter of making sure you keep that network open so that when opportunities do come along, we can say, ‘oh, here’s a good place for Bob’s Burger Shack,’” Coleman says. “They may need to go to Florida, whereas we already had them as a partner somewhere in Georgia. There are plenty of opportunities.”

Above: SSP officials helps educate potential ACDBE partners the program, then if they are interested, helps them with certification, says Pat Murray, senior vice president of business development.

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Prime POSITIONING

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ACDBEs Are Setting Their Sights High

Early this year, LaTrelle’s Management won a 10-year prime concessions contract at Houston’s WilliamHobby Airport (HOU). The agreement granted LaTrelle’s the right to operate in more than 17,000 square feet of the airport’s food and beverage locations, projected to generate as much as $74 million in revenue for Houston Airports. The win marked the first prime contract for LaTrelle’s, which is ACDBE-certified and

has operated at HOU and at George Bush Intercontinental Airport (IAH) for 35 years. LaTrelle’s isn’t the only ACDBE making big moves in the concessions space. In March 2022, Concord Collective made history at Los Angeles International Airport (LAX) when it acquired SSP America ’s LAX business, marking the first time an ACDBE business took over the entire portfolio of a major food and beverage concessions operator. Under its new ownership, Concord Collective operates eight dining locations, including a mix of national brands and proprietary concepts. Another recent success story came about due to a new terminal and a massive opportunity. St. Louis-based ACDBE OHM Concession Group partnered with Vantage Airport Group to put their hats in the ring for a $1.5 billion concessions contract at Kansas City International Airport (MCI). In October 2021 they won that bid and earlier this year the new airport terminal opened with great fanfare. There are other ACDBEs who are also expanding their footprints at a rapid pace, such as Mission Yogurt, Bambuza Hospitality, Crews, Gameway and many more. And these recent success stories may only make up a tiny fraction of overall aviation concessions deals, but they mark a promising step toward leveling the playing field and securing a more equitable and inclusive concessions landscape.

BY SALLY KRAL

Left, Below: Early this year, the ACDBE certified concessions group Latrelle’s Management won a 10-year prime concessions contract at Houston’s William Hobby Airport, granting Latrelle’s operations at over 17,000 square feet of the airport’s food and beverage locations (restaurant renderings pictured).

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Above: Gregory Plummer, CEO and managing partner of Concord Collective, says that in addition to ACDBEs having less access to capital and financing than primes, there’s also the challenge of small companies and large companies having the same deal-terms even though their economics and resources are vastly different.

believe that because we were nimble and because we chose to propose a ‘local means local’ program, we actually stood out from what the primes proposed.” Patel adds that the overarching strategy when putting together the proposal for the MCI contract was to present a local and regional program ref lective of the history, neighborhoods and strong culinary influences of the region. Further, OHM’s partner, Vantage Airport Group, committed to achieving 60 percent participation by ACDBEs, vastly exceeding the project’s stated goal of 16 percent. “Now that we have actually opened all units at MCI, it’s obvious that our strategy was what the airport, city, citizens and travelers wanted—it’s quite a program,” Patel says. “From the terminal design to our food and beverage integration, it’s probably the most ‘bespoke’ concessions program at any airport in North America. So, being an ACDBE forced us to think differently from our prime competitors who are often hamstrung with national brand commitments.”

Beating The Odds ACDBEs are small businesses, and as such they often lack the capital to truly compete with the major concessions players in the industry. So how did OHM, Concord Collective and LaTrelle’s do it? “It’s clear that the primes have more resources in the RFP process, including lobbyists, large teams, financial resources and in some instances, deeper brand portfolios—this will always be what any ACDBE can expect,” notes Milan Patel, president of OHM, which was founded in 1998 by Patel’s father and uncle. “However, we have proven at MCI that it was not any of those things that drove the award; we

Above: In March 2022, Concord Collective made history at Los Angeles International Airport when it acquired SSP America’s LAX business, marking the first time an ACDBE business took over the entire portfolio of a major food and beverage concession operator.

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Like OHM, LaTrelle’s was very intentional about including local small businesses in its HOU bid, notes Chris James, business development director for LaTrelle’s. “One major goal for us through the process was to make sure we extended opportunities for local operators to get their foot in the door with their first airport opportunity,” he says. “We subleased three spaces to three different Houston-based ACDBE operators who were looking for Below: St. Louis-based ACDBE OHM Concession Group, in partnership with Vantage Airport Group, was awarded a $1.5 billion concessions contract at Kansas City International Airport (newly opened units pictured).

their first location in an airport. This was truly a full circle moment for us as we were able to extend opportunities to local businesses just as we were afforded back in 1985.” Gregory Plummer, CEO and managing partner of Concord Collective, notes a few key things that contributed to his company’s success: “Our tenacity and belief in ourselves and ability to perform against great obstacles; our relationships and rapport with all stakeholders and being intentional about building meaningful relationships with airports, large primes as well as other ACDBEs; and our passion to be really good and value added to our guests, team members and partners.”

Above: Milan Patel, president of OHM Concession Group, brought tons of local flavor to the concessions program at the new Kansas City International Airport.

Above: Peter Amaro, CEO and co founder of Master ConcessionAir, notes that a big reason his company was able to succeed and eventually graduate the ACDBE program was due to the experiences gained while being an ACDBE, which gives you “a sincere connection and sensitivity toward the community and its local brands.”

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There’s one major success story that serves as an example of what’s possible for ACDBE-certified businesses: Master ConcessionAir (MCA) is one of few ACDBEs to graduate the program and become a prime concessionaire, which it did in 2019. Before this achievement, whenMCAwas still an ACDBE, it went up against primes in a bid for a 4,600-square-foot restaurant space in Orlando International Airport (MCO) and won, opening Cask & Larder, a proprietary Southern-inspired concept with a restaurant, marketplace and satellite bar. “We poured our heart and soul into that RFP response; everything about this submittal was unique and genuine— from the book cover to the design to the menu, it was carefully thought out,” says Peter Amaro, MCA’s CEO and co-founder. “The tree in the center of the restaurant alone cost us over $150,000. In a manner of speaking, we swung for the fences and hit it out of the park.” Due to the success of Cask & Larder, MCA was well on track to earning its prime concessionaire status, and the company’s first win as a prime was a large food and beverage package consisting of six locations in the new MCO South Terminal. The airport liked the original Cask & Larder so much that they chose it again for another location in the new terminal. “A big reason we have been successful is because of the experience we received from having been an ACDBE - you have a

Above: Master ConcessionAir is one of a handful of former ACDBEs to become a prime concessionaire, which it did in 2019. MCA’s first win as a prime was a large food and beverage package at Orlando International Airport consisting of six locations in the airport’s new South Terminal (pictured).

clearer vision of what the program sets out to do when you’ve seen it from all sides,” Amaro adds. “You also have a sincere connection and sensitivity toward the community and its local brands. We want to give them the opportunity to succeed. It is our responsibility to mentor them and pass along necessary information so they don’t have to make the mistakes we’ve already made.” A Promising Landscape Amaro adds that he believes that today’s environment lends itself to having more ACDBE inclusion. “Airports are becoming destinations reflecting their communities

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