Airport Experience® News - Food & Beverage Issue 2026

IN THE SPOTLIGHT

Comparative Associate Wage Rate Growth (Cumulative Growth from 2021)

80%

70%

60%

50%

Ongoing Labor Challenges Concessions “overdevelopment” certainly isn’t the only challenge ARRA is seeking to address. Labor challenges came to the fore post-Covid and they remain one of the biggest issues for North American concessionaires. “Labor rates in general coming out of Covid have skyrocketed – we all know that it’s happening across the board. What is not so well known is that labor rates in airports are increasing (at least according to our member surveys) at a faster rate than labor on the street,” Weddig says. He says higher wages are not an issue in and of themselves, but they become an issue when the disparity between airport and street wages gets too high, because airports typically enforce street or street-plus-percentage pricing. Wage mandates in various North American cities are also a big concern, Weddig adds, especially when those requirements specifically target airports or transportation hubs. Perhaps even more challenges for concessionaires are the increasingly aggressive unions and requirements of labor harmony agreements. “We’re in an industry that already has a much higher rate of labor union penetration than on the street,” Weddig points out, noting that concessionaires “aren’t against unions in general, and aren’t against good wages for our employees.” The issue is balance, he continues. “In the case of labor harmony agreements, they have transformed over the years to be a real burden,” he says. “Twenty-some years ago, labor harmony agreements had a really simple purpose – I [as a concessionaire] agree that I will not fight [employees] if they want to unionize… and they agree they won’t strike. “ Unions have now [demanded] fully negotiated collective bargaining

40%

30%

Cumulative Growth

20%

10%

0%

2022

2023

2024

2025

ARRA Member Associate Wages

Leisure & Hospitality Wage Rates

agreements before the union will sign off on your labor peace agreement,” which most airports require concessionaires to put into their contract bids. “In effect, you have to negotiate with the union prior to being able to propose.” Higher Costs, Fewer Bids Concessionaires are also dealing with higher construction costs, stemming from both higher wage demands from workers and higher costs of raw building materials. Weddig says tariffs and general inflation play a role, as do higher interest rates on borrowing. Interest rates have come down, he acknowledges, but are still higher than they were pre-pandemic. Other costs – energy, insurance, and the skyrocketing costs of food and, in some cases, retail items – are also taking a toll. The result is fewer bids. Weddig says concessionaires are approaching each opportunity with caution. “If they’re not comfortable that they can make money, or if it starts to get too close or it relies on aggressive assumptions, they will not bid,” he says. That could have repercussions, he warns. If the big industry problems aren’t addressed, the major multinational concessions companies could shift their efforts elsewhere. And smaller

companies might be unable to secure the necessary financing to bid given the terms and requirements. Concessions operators are also feeling the squeeze from airport lounges, which have expanded dramatically in airports over the past decade. Weddig argues that lounges are, in fact, revenue-generating entities and their lease structures should reflect that fact. Beyond the revenue, lounges serve as a marketing vehicle for airline and bank credit cards, which in turn generated significant revenue for the airlines. ARRA has been discussing these challenges and others since its launch more than six years ago. Weddig says the concessions industry has seen some progress in how airports approach their concessions programs, citing things like longer lease terms at some airports, reductions or eliminations of minimum annual guarantees, and other actions. But, he adds, more is needed. “We need to work together on solving these problems, because airports want to keep serving their customers and creating that travel experience. They want to be a proud representative of their communities – a civic asset,” Weddig says. “[Concessionaires] are a key part of it, but if we can’t afford to deliver that experience, then something’s got to change.”

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AX NEWS JULY/AUGUST 2026