Airport Experience® News - Post-Conference Issue 2025

Left: Scott Knight of Hartsfield-Jackson Atlanta International Airport (center left) shared his thoughts. Other panelists were Andrew Durkee of Sacramento International Airport (center right) and Pamela DeChant of Denver International Airport (left).

and wrong with how concessionaire employees are treated, and all others — airlines, janitorial crew — all important, required stakeholders in the ecosystem. But why are concessionaires treated differently?” Durkee offered an alternative: “Is there room in the world for there to be a below-the-line fee for building concession projects?” he asked, drawing a parallel to how Passenger Facility Charges and Customer Facility Charges function for airports and rental car facilities. Innovative Solutions Bissett highlighted San Jose Mineta International Airport (SJC) as an example of creative solutions. “They put their money where their mouth is and lowered the rent for local products,” Bissett cited as an example. “Number two, they said if we implement a CRDC at any point in this contract, we’ll automatically extend the contract two years. And third, they recognize the challenge of supporting loss-making stores, so they did a dramatic change in the retail programming to take a lot of specialty retail and put it inside larger, more profitable stores.” Both ATL and DEN have launched small business incubator programs designed to provide education and entry pathways for new operators, culminating in opportunities for shorter-term leases. SMF has pooled tipping to address labor challenges without intensive contractual changes. “We’re seeing early great success,” Durkee reported. “Individual locations are distributing as much as $30,000 back to their staff in a single month.” Partnership Redefined “A real partnership is more than just a lease agreement with financial commitments and compliance clauses,” Bissett said. “It’s collaboration where we work together to achieve a series of mutual financial and non-financial goals.”

“I think we spend more money taking in the MAG, verifying the percentage rent… and doing the annual audit than we earn from it,” Durkee said. His airport eliminated MAG requirements in favor of a straight percentage rent model. Flexibility: The Missing Contract Element During the audience Q&A, one attendee asked panelists about the disconnect between changing market conditions and rigid agreements. The individual suggested building flexibility mechanisms directly into contracts from the beginning, with provisions that are pre-approved so adjustments can happen more quickly. “There’s a legacy of photocopied leases, and they are easier to defend,” Knight acknowledged. “The flexibility that you’re looking for… is absolutely on our list.” Durkee described a different, proactive approach to flexibility: extensive pre-RFP consultation. “I go out and hear everything that I can about the challenges and opportunities that exist with our partners,” Durkee explained. “I’m trying to be genuine in my listening before releasing an RFP and be analytical about the choices we’re making.” Another audience member asked why in-terminal concessions are more heavily regulated than other commercial businesses that provide a service to the passenger. The individual cited examples of airlines adding baggage fees without airport approval and rental car companies closing counters at night with only a sign posted. “I’m with you, and we worked tirelessly in Denver to argue the same point,” DeChant said. “There is inequity, and it is so blatant

Murray also highlighted another economic factor impacting the concessions landscape — the growing influence of airline credit card partnerships and lounges. “If ( can go into the lounge and get a cup of coffee, I’m not going to stop at Pat’s store to get my cup of coffee,” Weddig noted, describing the direct competitive impact of expanded lounge offerings, which now frequently include free grab-and-go options. Data-Driven Decision Making Shared data will be key to stronger airport concessions relationships, panelists said. “Sales, facts, data, that’s really important to us,” said Pamela DeChant, senior vice president of concessions at Denver International Airpor t (DEN). “We’re trying to move away from a time of really high emotion and opinion.” Scott Knight, senior director of concessions at Hartsfield-Jackson Atlanta International Airport (ATL) made a “controversial” announcement: ATL plans to integrate with concessionaires’ point-of-sale systems. “The reality of not having just-in-time data means that when someone wants to make change, it is much more difficult to anticipate and view the impact,” Knight explained, moving beyond what he called “the honor system” of self-reported sales. Andrew Durkee, the airport concessions manager for Sacramento International Airport (SMF), explained a recent success where data changed practices. After analyzing nearly 19 years of revenue, Durkee discovered that SMF’s minimum annual guarantee requirements had generated just $87,000 total — less than $5,000 annually.

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AX NEWS MAY 2025