Retail Redesign

Retail Redesign

Using a phased approach, Columbus Int'l is utilizing in-house and external sources to transform its airport

BY John F. Infanger, Editorial Director

May 1999

COLUMBUS, OH — Retail, of course, has captivated the imaginations of airport managers in the U.S. and internationally as they look for new sources of revenue generation. The model many point to is Pittsburgh International, which had the advantage of designing from the ground up with the construction of an entirely new terminal.

To many in industry, that was an easier model than reconstructing terminal facilities that were never designed to become part shopping mall, part airline/passenger connector.

At Port Columbus International Airport/Bolton Field, the challenging process of merging old with new began in 1993. As enplanements continued to follow the national trend of consistent growth, the Airport Authority here took on a serious initiative to upgrade its facilities. Today, it has three interconnected terminal facilities (A, B, and C) that are served by a common entryway and parking garage, which are also undergoing a total renovation.

Included in this process was a new look at retail. The Authority decided it wanted to maintain a significant level of control over concessions, while contracting out its food and beverage facilities to a known industry firm.

As a result, it first hired Susan Warner Dooley to serve as general counsel to oversee properties and administration. Dooley brought with her a background as a lawyer in the bond financing arena.

A successful relationship with Paradies for the news and gift concessions was maintained and updated, with a PGA Tour Shop added to the master leasehold. The Authority then identified five industry food and beverage concessionaires to which it sent Requests for Qualifications and Requests for Proposals. Out of these, Anton Airfood, Inc., based at Washington Reagan/National Airport, was selected as master concessionaire under a 12-year lease.

"We were extremely impressed with what Anton had done at Providence (RI)," explains Dooley, who had also toured concessions at Atlanta and Cincinnati, among others. "Anton overall showed the best financial return, if you looked at projected sales based on the variety of concepts — diversity, more upscale offerings. Their percentage rents on a few of the concepts were actually lower on a few of the concepts than some of the other proposals. But we didn't think we were going to get their (other proposals') sales.

"We selected based on the quality of the offering as well as revenues to the airport. Our primary emphasis was on quality, variety."

William and Patricia Miller Anton, a husband and wife team who are the owners of Anton Airfood, had a history in the restaurant business in Washington prior to entering the airport arena. Columbus is Anton's sixth airport food and beverage contract, and the Antons say they were impressed by the Authority's legwork in the initial stages of the terminal redesign.

Explains Bill Anton, "After we had our initial meeting with the airport, we walked away and said, well at least they'd done their homework. During the Q&A selection process, it was a pleasure to have people who had actually read the proposal. You'd be surprised how many don't. They were asking about our marketing, our merchandising.

"It was probably the best run and most incisive process that we'd experienced."

During the pre-construction phases, the Authority also hired Aviation Consulting of Soquel, CA, to review the airport's planned concession redesign and to help establish performance standards. "We had most of our locations picked out, but the consultant helped reaffirm the correct locations," explains Dooley.

An emphasis On Local
A primary component of the Columbus retail redesign was a focus on local brands and companies. As a result, much of the remaining retail contracts were negotiated directly by the airport. In fact, rather than publishing a general Request for Proposals locally, the airport targeted those companies it wanted in the airport fold.

Explains Dooley, "It was a matter of matching up the concepts, the appeal that fit into the Columbus image and then negotiating those contracts." As a result, Wendy's, based in suburban Dublin, OH, is here, as is Bath & Body Works, a company of Columbus-based The Limited. Max & Erma's, a popular local restaurant, has proven extremely successful at the airport, as has the Cup O' Joe coffee cantina, among others. Most of the local enterprises had not operated before in the airport environment.

"At first, they are shocked by the type of rents that we get, though the percentage rents are lower than we had in the past," says Dooley. "But they're also finding we have a much higher concentration of people and that their revenues are higher." According to Dooley, late 1998 numbers show an average $2.75 per enplaned passenger for food concessions, up from $1.60 in 1994.

Bill Anton explains that while a local mix is essential for success in airport retail, it often presents a challenge which airports need to recognize and which companies like his are prepared to assist. "The way it works best is when you get good local concepts and either partner with them or get a licensing agreement with them — get the essence of their concept.

"There are some nuances to the airport environment that are unfamiliar to local ventures. Traditional lenders have a problem lending to them because once they put in the improvements they no longer own them, the airport owns them. It means, basically, that they have to have cash to build the facility. That's where a licensing agreement and partnering can be helpful. Under a licensing agreement, we're operating the business. They get the significant impact in terms of advertising and stature for their business."

In the case of the Max & Erma's restaurant, Anton became a franchisee. "We were their first airport location," explains Pat Anton. "The kitchen size was a challenge, and we had to help define the menu and what items worked for airport passengers, taking in account the constraints of the kitchen. They probably learned some things they could take back to their regular business."

Challenges of Reconstruction
As with any airport looking to redesign its retail arena, Columbus faced the task while continuing to operate an airport and not losing all retail revenues. "We tried to minimize the impact on the traveling passenger," says Dooley. A phased-in approach was taken, one terminal at a time.

Comments Bill Anton about such reconstruction, "The airport authority deserves a lot of credit because they knew where they wanted the concessions and had a vision of what the final product was going to look like. But they let us take the ball on the requirements of our meshing design to the needs of the retail infrastructure — things like garbage access, etc."

Adds Dooley about the overall process, "Our primary focus is that we are not trying to build a shopping mall. We want to provide services to meet passenger needs, but not overbuild."