Airport Experience® News - Post-Conference Issue 2025

CEO PERSPECTIVES Leaders Of Seven Concessions Operators Offer Industry Outlook

BY MELISSA MONTES AND CAROL WARD

Editor’s Note: About midway through the 2025 Airport Experience Conference, behind closed doors, seven CEOs from leading airport concessions companies joined AXN’s Carol Ward and Melissa K. Montes for a roundtable discussion. The goal was to provide a forum for these industry leaders to discuss some of the biggest challenges they face as they strive to provide an extraordinary experience to the traveling public. Some of the issues raised this year – high labor and build-out costs, shrinking margins, the growing power of unions – are familiar territory. Others - notably the unpredictability of the current administration and the potential impact of levied and threatened tariffs - are new challenges that each company must navigate going forward. Participating in the conversation were Carlos Bernal, CEO of Areas USA ; Steve Johnson, president and CEO, North America, Avolta ; Toby Keir, CEO of WH Smith North America ; Pat Murray, CEO, SSP America ; Gregg Paradies, president and CEO of Paradies Lagardère ; Scott Socha, group president for Parks and Resorts, Travel and Australia at Delaware North ; and Jeff Yablun, CEO, OTG Management . The following is an edited version of the conversation.

MONTES: It’s been five years since the pandemic. How have your businesses materially changed in that time and how do they compare to 2019? JOHNSON: Today enplanements are up roughly 4%, 5% over what they were in 2019. It’s not dramatic - we should be 15% higher than that. If you look at all the investments we made during that period, they’re not paying [revenue returns] as well as they should be. But I would say overall that business is relatively healthy. There are some real pressures on the business, whether it be labor, whether it be cost of goods…. Coming into ‘25, we felt pretty good. This was going to be the first truly stabilized year where enplanements were more predictable, airlines were becoming more predictable. Then we elected Trump and that became a different piece of the puzzle that we didn’t expect, whether it be the tariffs, whether it be Canadian traffic down 70% because they [aren’t inclined to visit the U.S]. European traffic is projected to be down 5% to 7% over last year. These things are real and are affecting us today. I think the last three months have shown us that we’re not sure where we’re going to hit in 2025. The tariffs are going to affect this in different ways. Right now, with the food business, we’re talking about 70 - 80 basis points of cost and for the retail business, it could be as much as 300 basis points of cost because of what we’re importing. Those are real costs that I don’t think any of us expected back in October and November. PARADIES: 2019 seems like a lifetime ago. From my perspective, the industry has probably rebounded stronger. Collaboration

(left-right) Gregg Paradies president and CEO, Paradies Lagardère; Jeff Yablun, CEO, OTG Management; Scott Socha, group president for Parks and Resorts, Travel and Australia at Delaware North; Pat Murray, CEO, SSP America; Melissa K. Montes, vice president and publisher, Airport Experience News; Toby Keir, CEO of WH Smith North America; Steve Johnson, president and CEO North America, Avolta; Carlos Bernal, CEO of Areas USA.

and more sharing of information - there’s still a big opportunity there. We’re more customer-focused, more traveler-focused. There’s been a lot of new leadership running airports, and they’re more sophisticated, which is good for industry and is good for us. The [concessions] model is evolving. The cost structure has increased significantly. I think there’s been a bit of a reality check in our industry as to what’s a good business opportunity and what’s not. There’s more discipline. We’ve all

had meetings where [airports and consultants] are listening much more to what the needs of operators are, in order to build a better program more collaboratively and do more upfront work to have a better process. 2019 was record year for many of our companies including us, and last year was a record year for many of our companies, including us, but 2025 is a different. This was supposed to be the year of normalcy. Normalcy is not what this administration is about.

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AX NEWS MAY 2025