Airport Experience® News - Post-Conference Issue 2025

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. – Gregg Paradies, president and CEO of Paradies Lagardère

YABLUN: We’re seeing some elasticity of demand. People are trading down from full-serve to quick-serve to markets. There seems to be real sensitivity to pricing. Our honeymoon appears to be over. SOCHA: On the consumer side a lot of friction has been taken on the system. You can grab something and pay and get out without interacting with anybody, which is I think great for the industry. In terms of her transaction spend, if you consider the amount of time you don’t have on a connecting flight, that takes away from your ability to spend, even with taking friction out of the marketplace. I don’t have any numbers on airline clubs, but what my eyeballs tell me is airline clubs have expanded tremendously, which certainly hurts us. Then there’s the issue of pricing. [Airports] don’t need to monitor pricing. We’re professionals. They can take much more administrative friction out of the system if they just let us operate our businesses. JOHNSON: It’s not just airline [lounges], it’s all the credit card-[affiliated spaces]. In some cases they’re building for 600-700 person capacities. We’re paying a high premium for airport real estate and airports are introducing competitors that are taking up massive amounts of square footage and taking thousands of people out of our journey. It hits retail, it hits food, and there’s been no discussion on how that affects our business. WARD: Shifting to labor challenges, I know escalating wages and increased union demands have been challenging in recent years. Can you provide an update on the latest developments? BERNAL: Our biggest single cost issue has [involved] labor – the unions, the living wage ordinances, the benefits. That’s really been the biggest pain point, because of not being able to increase pricing or use other mechanisms to be able to offset those costs. MURRAY: In the last 18 months or so, we’ve seen wages recast in major cities. What gets printed in the newspaper is what the living

wage ordinance is, but that doesn’t begin to capture what the actual CBA (collective bargaining agreement) is capturing. There is some metric of the hourly wage that’s above the living wage ordinance, and then there are all the benefits that are piled on top of that. In the benefits, there are lots of things that that didn’t exist previously that are now a part of the deals (such as training funds, legal funds, pensions, etc). BERNAL: The living wage ordinances that come up in these major cities, they target the airports specifically, which is really kind of mind boggling. How can you target one specific business within the city? I don’t how we stop it from happening, but it’s happening. YABLUN: Half of our business is in New York City. All our collective bargaining agreements are in negotiation at the same time. They’re asking for the sun, moon and the stars above. It’s all politically driven and it’s very difficult to deal with, obviously. Some of them have been dragging on for a long time because you can’t sign up for it. You just can’t. That’s a big, big challenge for us. BERNAL: Another interesting part of that, at least for me, is you almost have a gun to your head. To do business in the airports, you have to sign up for the labor peace agreement. It takes away any negotiation, any leverage that you may have to negotiate a fair deal with a union, because you’re forced by the city or whichever entity is driving that process. Then they control pricing on top of that. We have to pay what the union wants, but [the airport is] not going to give you any pricing to offset that cost. MURRAY: I think somebody could listen to this conversation and think we’re only talking about wage rates or benefits. There’s a whole other bucket that has to do with the work rules that have radically changed. [In one case], one of the negotiating points was the right to “no-call, no-show” for 20 shifts a year. What that means to us on a Friday afternoon is we might have 200 employees

[Airports] don’t need to monitor pricing. We’re professionals. They can take much more administrative friction out of the system if they just let us operate our businesses. – Scott Socha, group president for Parks and Resorts, Travel and Australia at Delaware North

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AX NEWS MAY 2025