Airport Experience® News - Post-Conference Issue 2026

PARADIES: The right coast and the left coast are where the major pressure is for all of us. It’s not just the wages, it’s the benefit piece, which is so punitive. The unions are getting tougher in some cases – they are just throwing all the punches they can. Part of the challenge is understanding our business and understanding that the employees should be making the decisions on the union piece. When we look back 12 months, that’s probably been the biggest change. [Initiatives such as] the Olympic wage and the healthy terminal act in New York are putting a lot of pressure on the business model. MBOYA: In the past we covered wage rate [increases] with pricing. Now, wages are getting to a point where you can’t push pricing anymore. And the healthy terminal act is just a kick in the gut. The airports are adding to the pressure by creating these higher wage rate corridors within the airports. One other thing, most industries are finding ways to use AI and technology to cover some [labor needs]. We’re in hospitality and we are serving people. You can only take so many people out of business, so we cannot respond in the same way. BERNAL: If I could just add, I think the unique challenge of our industry is we end up bidding on these businesses… [using a formula of] 3% [cost increases] every year. That’s been inflation historically. But construction costs have gone up 30, 40% since pre-Covid. Labor’s gone up around the same amount. We’re locked into a contract that [restricts pricing to] street plus 10% or street plus 15%, and it doesn’t work. There’s some flexibility from some airports, but I would say most airports dig in and say, ‘no, that’s the deal and we can’t change it’. We talk about being stakeholders, but not all stakeholders are created equal. We’re bearing the burden on our side to offset these historic costs to do business

in the airport. We just need to bring other partners along to share some of the burden. CRWYS-WILLIAMS: This is a capital-heavy industry, and the capital that’s coming into [airport retail and F&B] is private capital. We’re going to have to work out how we get a return on that capital, otherwise it will stop flowing. KING: I’ve been gone [from the industry] for roughly a decade, and it’s gotten harder – it’s gotten a lot more difficult to make money. There will come a point where something gives. It will right itself, but it’s upside down right now. WARD: In our conversation last year, which some of you were a part of, you called the operating environment an unsustainable situation. Are you seeing any movement from your airport partners or others to reset? JOHNSON: From some, yes, but I would say the majority, no. There are some who really have tried to understand our business a bit more, they ask questions. Also, there were several RFPs that came out that had very few bidders, and in some cases, no bidders.

That’s a warning to the airports that we’re not going to invest in deals that don’t make any sense. F&B is a bit harder – it’s more highly capital intensive – and it’s harder to make the money back. When I look at what we bid on last year, I don’t think we bid on more than 50% of the RFPs that hit the street, and that has not been the traditional case. PARADIES: We passed on close to 50% of RFPs. [Regarding our airport partners], I think over the last year we’ve seen more movement than in other years, other than during Covid. We’ve seen the listening is getting better and there are more conversations taking place before the RFP goes out. They want to understand the business so they don’t end up with zero responses, which, of course, is not good for anybody. We are seeing a more open minded approach, but not everywhere. MBOYA: The pressure on capital is a lot. [An F&B buildout for] $2,000 per square foot is now a luxury. We’re talking about $3,000 in some places, depending on the kind of

Right: Gregg Paradies of Paradies Lagardère shares his insights with the group.

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AX NEWS APRIL/MAY 2026