Airport Experience® News - Post-Conference Issue 2023
all have is the airlines have changed a lot of their banking flights. Our valleys and peaks of sales have changed a lot. The peaks are higher and tighter. What do we need to do operationally to be ready for that? JOHNSON: All those pro-formas that we put together back in 2016, ‘17, ‘18 and ‘19 that showed growth are off. We’re all dealing with that in different ways. For the summer, I’m cautiously optimistic depending on the airport. There are still some that are struggling. MCOWAN: Especially with the lack of the Asian passengers, for example, on the coasts. It’s a big issue. JOHNSON: And business travel – some of the business hubs just aren’t back yet because there’s not as much business travel. Conventions are back to normal but the business travel that’s missing today and probably will never come back is business to-business travel, meaning internal company travel. It used to be if you had an office in Chicago and an office in L.A., people would go to each other’s offices and spend time with each other. That travel is probably gone for good. MCOWAN: We talk about the airlines and the pressure that that will put on us, in terms of capacity in the market. But the flip side of that is, as we’ve come out of COVID, that the consumer habits have changed. The integration of things like self-checkout has been a massive positive - look at the amount of automated retail this year. Investment and all of these things that we’re all doing from a retail perspective, all of that is helping to drive sales and customer satisfaction, even though the customer is a much more fractious individual at the moment because the stress of actually traveling is much worse. WARD: Several of you have mentioned airline actions. Last year when we did this roundtable, we talked a bit about data sharing. Has there been any progress on that front? PARADIES: I heard from one airport that they’re taking it into their own hands. They’re putting technology on the loading bridges to get the information directly since they can’t get it from the airlines, which I thought was very interesting, very proactive indeed. It’s not about every store being open to midnight, it’s about how many people are going through [each area of the terminal]. It’s a pretty predictable business but the lack of data really makes it hard to step appropriately and efficiently.
WARD: There’s been a lot of discussion in recent years about the need for a change in airport-operator relationships. Are you seeing any progress on that front? SVAGDIS: The RFPs haven’t changed but there is an understanding now. Everybody learned fromCOVID. Everybody ultimately rallied around and did the right thing to keep the ecosystem alive. There are definitely airports that are more reasonable [now]. We’re not being asked to keep restaurants open at midnight when there’s no one there. I definitely see the mindset changing and [airports and operators] working collaboratively. The biggest challenge … is our cost. In every facet of our business, costs are up anywhere from 20 to 30%. We have to see some kind of change in [lease] terms or something like. WILSON: For RFPs that have recently been released, there’s been no change. But the relationships that we have with the airports on existing contracts seem to be a whole lot better, more collaborative. With those contracts that got awarded in late 2019 to 2020 that we’re now building out, there’s an understanding that our costs have gone up 30 to 40% and we need to have a conversation about changes. MCOWAN: I think some things have changed from a retail perspective. I think the RFPs have come out with a little bit longer terms.
Above: Steve Johnson of HMSHost says HMSHost is “not as fat, we’re not as slow, we’re much more agile, much quicker” than before the pandemic.
a lot faster. And I think out of all of that [happened during the pandemic], we do have probably a better company now than we had four years ago. MONTES: Airports and operators are ramping up for spring and summer travel season. What is your level of optimism for passenger numbers, spending and the ability for you to create a positive customer experience? JOHNSON: I think it’s in the NorthAmerican DNA to travel across the world. People love to explore, and they’re going to continue to explore and travel this summer. It’s the airlines that are restricting our growth, not the demand from passengers (referencing a recent American Airlines route cut). I shudder to see what the price of tickets is going to be this summer – they’re going to price some people out of the market. But the flights will all be full and we’ll all be staffing our locations. Retail is back almost 100% or over 100% [of 2019 levels]. Food and beverage – at least ours - is sitting at around 88%. And if you look at the fact that we should have grown 2 to 4% per year, we’re really closer to 20% off of where we should be. SVAGDIS: It’s not just American, Southwest [is also cutting flights]. They still haven’t put a new scheduling system in yet, but from everything I’m reading, they’ve kind of pared back their summer schedule as well. [SSP America is] probably just shy of 10% of 2019, but it’s by airport. There are places we’re still 20 to 30% down and then other places, believe it or not, [where we’re] 20% over. It’s because of what the airlines are doing. And I think the biggest challenge we
Above: Roddy McOwan of Marshall Retail Group says integration of technologies such as self-checkout have been “a massive positive” for the industry in meeting the needs of the next generation of travelers.
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