Airport Experience® News - Leadership 2022

Q & A

ARRA’S BIG LIFT Executive Director Andrew Weddig Outlines Key Challenges And Goals For Concessions Organization

BY C AROL WARD

Editor’s Note: The Airport Restaurant & Retail Association was formed months before the pandemic reared its ugly head. The organization’s objective was, and is, to work with airport operators on issues and challenges impacting concessionaires and air travelers. The pandemic, of course, upended all “normal” operations for both airports and concessionaires. Now, as travel rebounds, concessions operators are faced with new challenges while at the same time, issues at the forefront three years ago remain relevant today. Andrew Weddig took on the role of executive director of ARRA in October 2021. He recently spoke with AXN’s Carol Ward about the way forward for the organization.

WARD: This year, passenger levels have recovered considerably. What are you expecting for the full year, and how are your members feeling about the near-term future? WEDDIG: We have had continued travel, just based on the TSA throughput numbers, but we are stuck. The recovery, such as it is, is stuck at around 90% of 2019 passenger numbers. Using 2019 as a benchmark, we are still 10% off. Coincidentally, that’s close to the profit margin in the concessions business. On the whole, we need to keep in mind that this industry, the whole aviation industry, is still not recovered. Recovery means that we have to get out of the hole we fell into. The passenger counts don’t necessarily mean we’ve recovered. We still have to make a profit to pay off the debt that was incurred during the pandemic. The challenge we’re facing is, how do you define recovery? And more importantly, how do you achieve recovery with our current challenges of labor – labor shortages and labor costs - and an inflationary environment? These are challenges that everybody faces throughout the economy, but they are particularly acute right now in the airport sector.

You can see, in fact, that stores have lower staffing, stores have lower inventories. Restaurants are out of items on menus because they can’t get the supplies. [Operators] can’t generate enough sales because they can’t operate full hours because they simply do not have the staff available. These are the things that are going to impede the recovery and impede getting back to the space of true financial health and balance. WARD: How is ARRA proposing to remedy that? WEDDIG: Well, it’s important to keep in mind that some of the critical issues that we’re facing - labor shortages, labor costs, inflationary pressures, and supply chain disruptions - all of those are out of our control. They’re out of the control of airports. We are definitely still short on staff and it’s not just us. Other sectors of the economy have grown and other sectors of the economy have since [attracted] labor out of our sector. To overcome that challenge, we have to figure out how to make the jobs more attractive, and that becomes a joint effort with airports to make working at the airport a more attractive proposition. We can’t just pay more because people

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