When Calgary International Airport (YYC) began strategic planning to refresh its concessions and retail offerings in 2017, leaders didn’t know the headwinds facing the airport in 2020.
Tim Barnes, senior director of Commercial Services for YYC, said the airport embarked on plans to rework its concessions program and offer services travelers wanted. They studied the needs of the travelers, what the mix of offerings were and how they could be made better.
“Roughly 62% of our retail and food and beverage space was located pre-security and generating less than 20% of the sales,” he said. “We're a 40% connecting airport, so post-security is more important to us than some other airports. It was very important to me and to the team to create a program that really linked in with that need and making sure that we had enough options in the post-security environment.”
The plan was derailed by the pandemic. Capital dried up and concessions partners were just trying to stay open, so YYC took a different approach to its Concourse C redevelopment, which not only is the airport's busiest concourse, but also had been slated for its refresh right when the pandemic began.
A New Look on Concourse C
It was important for YYC to find a way to continue with plans for a refresh in its busiest concourse and it was critical to complete the project before the onset of forecasted travel recovery.
The refresh plans included:
- New full-service restaurant with an open-concept design, indoor patio and local fare featuring award-winning craft beer and gin
- Relocation of an existing restaurant to improve sightlines and passenger flow while enhancing seating
- New Customer Care desk for WestJet
- Digital superboard installation with the airport’s advertising partner Pattison
- Sprinkler upgrades, seating upgrades and new carpeting
“We were very focused on the guest experience, so certainly what we've done in the space has resulted in an uplift in revenue,” Barnes said. “By removing a bunch of clutter and opening up the sightlines and being able to actually deliver a project during low volumes, we're able to improve guest experience. That was our No. 1 objective and we achieved that.”
Passenger travel dropped 90% at YYC in 2020 and remained low in 2021. Canadian airports received little government support and YYC’s concessions partners were severely impacted and had to either close or significantly reduce operations.
Difficult decisions had to be made including if and how to proceed with plans made before the pandemic began. YYC worked with its partners to identify new and innovative solutions to enable it to move forward with plans for the refresh, despite the challenges brought on by the pandemic.
A Partnership to Completion
YYC loaned HMSHost money to keep operations going and develop two locations on Concourse C. They also combined efforts with other projects, which included new flooring, a new sprinkler system, installation of a 40x13 digital advertising board and jet bridge work.
HMSHost was adding Last Best Brewing & Distilling, a local Calgary brand offering locally crafted beer, spirits and Alberta-inspired cuisine. The company also wanted to enhance the coffee experience by moving the Starbucks to a location that offers more seating.
The move allowed the airport to leverage its goals and resources. Leaders already wanted to redo the entire area while traffic was down and concessions partners had a capital freeze. If they waited, it would create more disruptions for passengers.
“We basically tried to combine a whole bunch of projects into one integrated program,” Barnes said. “Rip the Band-Aid off and do it all at once and do it quickly because it’s one of our busiest areas of the airport.”
The airport had one integrated project team overseeing all the activity in the area communicating with all the stakeholders on a regular basis. Staff also had regular calls with HMSHost updating them about the project.
YYC staff worked closely with its partners to co-develop changes to the concourse and develop support programs meeting the needs of all parties involved. Due to the large and complex scope for the concourse refresh, there were many stakeholders with many requirements, thus requiring regular communication with each partner group, gathering feedback and working through solutions that met their needs.
“By having one, centralized command center from a project management standpoint, that really helped facilitate open dialogue with all stakeholders,” Barnes said. “We had both internal and external elements of that. Lots and lots of communication to keep it all on the rails.”
YYC also provided partner support programs while facing significant financial and resource challenges to ensure its partners survived the pandemic.
YYC had about $2 billion in debt restructured and its workforce dropped about 35% during the pandemic. It relaxed operating hour restrictions for concessions partners, provided relief on minimum annual guarantees and kept regular contact with partners to ensure they were getting the help they needed to stay in business.
"The COVID-19 pandemic brought us closer together as a community. HMSHost can’t say enough about how airport leadership recognized the immediate impact on concessionaires and took steps to support us," said Amy Dunne, Vice President of Business Development for HMSHost. "HMSHost wasn’t able to build during the pandemic because of the business conditions. In response, YYC loaned us money to fund the construction since we agreed it was a great time to build while traffic was low. This also allowed us to unveil exciting new concepts as we begin to welcome back passengers."
Beat the Pandemic Clock
YYC wanted to take advantage of the low passenger numbers in this area because it’s one of the busiest areas of the terminal. Doing any work in Concourse C is always a challenge because there are so many people flowing through.
The team ensured there were minimal disruptions to travelers during construction. As portions of the concourse opened, guests were made aware of the changes through in-terminal signage. The partnership allowed for a much faster construction time, cutting more than four months from the time it normally takes to build these locations.
The approach eliminated duplication of efforts. All backend infrastructure was coordinated across each of the project elements to provide a more efficient manner of execution.
"The forward-looking response and support by the airport in the depths of the pandemic is admirable," Dunne Said. "Our partnership has enhanced the passenger experience with both new and improved concepts in Concourse C."
Barnes said the project ran into supply chain issues. There were kitchen equipment shortages and challenges with getting LED boards for the advertising display. However, there were labor cost savings from completing the project before 2022.
“With inflation, had we done the work now that we did in 2021, it would probably be 30% more,” Barnes said. “There wasn't a lot of work going on at the time because a lot of capital projects had been frozen, so the builders were more incentivized to keep their crews running.”
The Concourse C refresh was completed in November 2021 and sales per passenger have increased 86% over the previous year and dwell time is up compared to 2019 levels. It not only met the original goal of the project and enhanced the passenger experience, but it also strengthened its partnerships with concessions partners.
“There was a lot that we had to work through, but I would say the No. 1 thing was that we had one centralized command center from a project management standpoint that helped facilitate open dialogue with all stakeholders,” Barnes said. “We had both internal and external elements of that, so lots and lots of communication to keep it all on the rails.”
Barnes said YYC is already using the integrated project delivery style for current and upcoming projects, seeing the synergies it delivers and financial benefits it can reap.
“If you approach a problem with an open mind, you're probably further ahead than most, because if you just go off your agreements and you say that the agreement says X or Y, you'll never get to a creative solution,” he said. “You always have to think outside of the agreement and how you can get something done using different tools that may not be available within the agreement. And if you have a partner that thinks the same way, then, then you can really achieve a lot more than, than what the agreement would suggest.”
