Airport Experience® News - Conference Issue 2025

Assessing The Economic Impact

Concessionaires Continue To Face Significant Financial Burdens In The Post-Pandemic Airport

Airport concessionaires say the operating environment is shaky, and even untenable in some cases. “Generally speaking, many concessions contracts are breaking even at best due to extraordinary increases in costs over the past four or five years. Concessionaires have endured inflation in labor costs, inventory costs and construction costs,” says Andrew Weddig, executive director of the Airport Restaurant & Retail Association (ARRA). “Along with everyone else, we are in a higher interest rate environment, yet the businesses are typically constrained on prices due to street-pricing regulations so that we cannot adequately recover the increased costs,” he continues. “Unfortunately, I really can’t identify any

BY SALLY KRAL

Record-high demand for air travel is resulting in bustling terminals and crowded concessions, a marked change from the industry devastation that occurred with the pandemic five years ago. Yet all is not well in the airport concessions sector. Higher minimum wages and rising build-out costs, coupled with inflationary pressures and now, with the new administration in the White House, the threat of tariffs, are all combining to make concessions a precarious business.

28

AX NEWS MARCH 2025