Rethinking the Process

Miami International Airport moves to make its concessions RFP process more bidder-friendly in the midst of the airport's redevelopment.

The new concessions program will operate similarly to a retail mall, says Ryan, and will include a mix of nationally and internationally known retailers, as well as retailers that represent the South Florida region. Airport officials expect traffic numbers to increase from 31 million annual passengers in 2004 to 25 million by 2015.

In mid-May there were five active RFPs. A new concept for those familiar with doing business with MIA, many of the locations were bundled into one RFP with a main tenant and subtenants. Diaz and Ryan say this approach will allow for more diversification in the concession offerings at the airport.

The new concessions design is reflective of passenger demands, says Diaz. "The savvy traveler has demanded that airports offer more options and more brands." A charge of the airport then is to balance the needs of travelers, appropriate price points, speed of service, level of ambiance, and quality of service, he adds.

Part of that is bringing in more brand-name merchandise, says Diaz. "People want value perception; you know what to expect with a brand." He says that the airport expects retail sales to increase due to the availability of brand-name products.

The new layout of concessions will be more balanced, says Ryan, offering travelers more choices and encouraging competition between retailers. "When's there's competition, employees are inspired to do better," she says.

Each of the terminals at MIA will have different concession design guidelines, says Ryan. For example, "The North Terminal has a whole different design guideline just for that terminal," she says. "It will feature vaulted ceilings, and there will be an openness to it, so the concessions design should follow that theme." The South Terminal will have what Ryan calls a "shopping mall feel" with a double-loaded entryway and the tile for the concessions floor will feature a palm tree design.

New RFP Aspects

Tenants will be responsible for building out the leased space, with a minimum requirement of $250 per square foot. Ryan says there is a MAG (minimum annual guarantee) built into each lease, but tenants will not be required to pay it for the first year. "That's part of us trying to make the process easier," says Ryan. "We're trying to be very careful on how we set the MAG — we want our tenants to be successful."

Additionally, one half of 1 percent of gross revenue from each tenant will be contributed to a concessions marketing fund to promote the retail and food and beverage offerings throughout the airport.

Not only are prospective tenants learning more in this revised process, Ryan says she and her staff are learning more after each issuance of an RFP. "After you do the first, you try to make each a little better, with the wording, being more clear. Changing our ideas about the MAG is just one of the changes we made. We learn from each RFP." She expects the learning will continue as there are three more RFPs that will be issued by the end of the year. "We may be doing some brand new things by then," says Ryan. "There may be things out there that we just haven't had time to think about before that we'll include with future RFPs."

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