Airport Experience® News - Conference 2023

to maximize its ability to be attractive. The company is reviewing its benefits and, as it opens new locations, is also willing to pay a bit more to get people on board earlier. “We’re going out early to get people rather than just-in-time hiring,” McOwan says. “There’s obviously a cost of doing that, but I think it’s helpful. You have to take a little bit of a longer-term view.” Weddig notes that for ARRA’s member concessionaires, employment overall has stabilized but not to the point where anyone feels they are fully staf fed. “Everybody has fewer employees than they did in 2019,” he says. “Everybody still thinks they need about 10 percent or more employees to get where they would feel comfortable with their staffing.” Rising Costs Rising costs aren’t only felt in wages. The cost of many ingredients have risen due to inf lationary pressures, and concessionaires have had difficulty passing those costs onto consumes due to airport pricing requirements. Imberman says she has seen at least a few airports either doing away with street plus-10% (or similar) policies or at least easing up to the point where operators can more readily present evidence of comparable price hikes on the street.

Imberman notes, for example, that one of her airport clients understands the need to be f lexible, and has suggested price increases outside the normal cycle of review are now acceptable. “I think that could be the wave of the future in terms of airports trusting the concessionaires to price fairly and, that way, when things are changing and prices are increasing, you know you’ll be OK,” Imberman says. Rising costs of both labor and buildouts are also on the radar at Paradies Lagardère, where the need to be creative and strategic with budgets “may directly or indirectly impact other projects,” Jamison says. “With the return of travel, there is also the return of the development of airports through terminal expansions or upgrades, so many opportunities for new concession programs across North America are forthcoming,” he says. “We must balance those great opportunities with these rising costs to ensure we continue to exceed the expectations of our airport partners and the travelers we serve.”

Continued Collaboration Several industry executives spoke optimi stical ly about the growing collaboration between airport, airline and concessionaire representatives, which started during the pandemic and has, thus far, carried through early recovery. Imberman has been part of calls where leaders of several food and beverage companies have talked through solutions and best practices, a practice she hopes will continue. “I think that’s been a refreshing aspect, where we’re going to come together to try to figure out solutions moving forward,” she says. The collaboration isn’t universal, says industry consultant Stu Holcombe, who owns Travel Retail Partners. He still sees some airports that have not realized or understood that costs are increasing while terms have not changed. Couple that with the increase in passengers opting to visit third-party or airline lounges, and it creates an atmosphere where some of the brands he represents are becoming more selective about where they want to locate. “Br and s lea r ned t hat hav i ng unproductive stores, regardless of where, is a burden,” he says. “Especially during major pandemics or national disasters.” That said, Holcombe adds, other airports are working with operators for solutions. And, some brands like the new traveler demographics – more leisure and fewer pure business travelers. “I have clients that are eager to secure leases due to the type of consumer that is traveling through airports today,” he says. While the year ahead is likely fraught with ups and downs from these and other new challenges, concessionaires are trying to remain optimistic.Westlye, for example, notes the devastation the pandemic wrought and the new awareness that exists because of it. “The business is very different,” he says. “It’s much harder to find employees. I think we always appreciated the employees, but we appreciate them even more now. And I think, as an industry, a lot of relationships have developed around trying to figure out what to do strategically.” “I think we have to be grateful for the recovery and keep in perspective that the challenges today are a little more workable than before,” Westlye continues. “The whole industry basically shut down and here we are, back close to where we were.”

Below: Traffic is generally up considerably at airports, helping aid recovery after pandemic related struggles. Supply chain, labor shortages and build-out costs, however, continue to provide challenges.

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