Airport Experience® News - Retail & Services Issue 2025

She says tariffs have been more prevalent in affecting choice than in creating massive cost issues, at least to date. Vendors, she says, are downsizing the components and textiles they have available and they aren’t holding quotes as long as they typically do, sometimes reducing them to 15 days when in the past 30 or even 60 days were common. That’s challenging in all settings, but even more so in airports, where planning and construction often take years. “That makes it difficult for our clients to put a budget together,” she says. “There’s just so much unpredictability and fluctuation. Some of our projects can last from when we start that RFP to when we do the punch list. It could easily go over the course of three years or so. There’s always a lot of changes.” What’s helpful in situations like these? Larimer singled out Philadelphia International Airport (PHL) for having an open line of communication, clear expectations for what’s expected in drawings for review processes, working with potential clients to reuse some existing equipment when possible and for making efficient, timely decisions. “They help provide us with a good amount of information on the front end,” she says. “Their reviews also help tee us up for a successful city review. You have all these layers, but each layer helps make you successful for the next one.” Flexibility from airports, making sure design elements are reasonable and purposeful, not saddling operators with unnecessary costs and creative thinking around reuse of existing fixtures fits within a long-growing focus on sustainability in airports anyway, says Alan Gluck, senior manager of the global aviation commercial advisory firm ICF . “Airports need to be cognizant of the cost they’re putting on tenants,” he says. “I think it’s time for a really deep dive into tenant design guidelines and requirements.” Design review should be efficient, he adds, acknowledging it doesn’t have anything to do with tariffs, but it can help control costs to not, for example, send expensive drawings back to proposers when it’s not for a vital need.

“Each time the drawings are sent back to be redone the operator adds a slug of cash to the cost of design-build,” Gluck says. “If something’s wrong, don’t accept it, but if you don’t like it, that doesn’t make it wrong.” Not Just Tariffs Several operators contacted for this story referred calls to the Airport Restaurant & Retail Association. Executive Director Andy Weddig says tariffs are just one of many costs making airport capital projects unpredictable in 2025. Labor, he says, continues to be the biggest challenge, especially on the coasts. The city of Los Angeles, with support from Unite Here, in May approved an amendment to its living wage ordinance increasing minimum wage, in steps, to $30 per hour by 2028 – significantly higher than the minimum wage on the street – for hospitality workers in hotels and at airports, with increases to mandatory health care benefits spending as well. A consortium of aviation organizations, including Delta Air Lines and Airlines for America funded a successful campaign to force a referendum on the change – the issue could hit ballots next year. “That’s the biggest one,” Weddig says. “You compare it to a McDonald’s or Starbucks on the street, which pays $20, $22, yet we have to pay $30 and are restricted to airport pricing.” The push followed efforts in late 2024 by the Port Authority of New York and New Jersey to increase minimum wages over time up to $25 per hour, as well, though it came with an increase in pricing from street-plus-10% to street plus-15%. The Long Beach City Council approved a minimum wage increase on airport and convention center workers to $29.50, as well, which will test the mettle of the smaller Long Beach Airport (LGB), Weddig says. One ARRA member, Weddig says, faces 70% increase in labor costs by 2028, should the increases all take effect. Others are seeing increases in the 30% range but are understaffed since the pandemic. Add in artificial intelligence, challenges to the industry’s diversity regulations and

Above: Andy Weddig, executive director of ARRA, says wage ordinances, the decimation of long-standing diversity practices and tariffs have created a year of uncertainty for operators.

the increasing proliferation of lounges and it’s been a busy year. And, oh yeah, construction costs are going up, with some members in New York getting construction quotes for projects at John F. Kennedy International Airport (JFK) that were roughly 25% to 30% higher than what they had planned for last year. “Prices are going up everywhere,” Weddig says. Hoping For Partnerships With costs continually increasing and tariffs all but ensuring the uncertainty will continue and the worst is yet to come, several stakeholders called for continued and increased collaboration in line with what the industry saw during the pandemic. “These costs are jumping one day to the next, really showing the limitations of airport pricing policies that weren’t designed to account for rapid supply and cost shocks,” says Bambuza’s Ward. “I’m hoping airports look back to their pandemic responses and meet this current challenge with the same spirit of partnership.”

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AX NEWS SEPTEMBER 2025