Making prime retail spaces out of airports

New York: This summer, while travelling from New York to Denver, Marc Stewart noticed that the Delta Air Lines terminal at La Guardia Airport felt unfamiliar.

“Usually, I fly United, which means you are in the old concourse where there are not even enough bathrooms. So, I was pleasantly surprised when I walked into Delta’s terminal at La Guardia and saw some innovative options,” said Stewart, a television journalist. “As soon as you go past security, you see a food set-up that’s reminiscent of Whole Foods. There’s a food bar, snacks beyond potato chips. It is a completely different feeling.”

What Stewart encountered is going on all over the world. Airport operators are updating ageing terminals and constructing new ones, wooing travellers with retail and dining options that encourage them to spend more money. And they are spending as much as 30 per cent more at some airports, according to OTG, the airport concessionaire that worked with Delta on the remodelled terminal.

When revenue from airport amenities goes up, the fees airlines pay to use an airport can go down, which in turn can attract more airlines to offer service to the region.

It is up to the airport “to be attractive to the customers; both the airline and the traveller,” said Angela Gittens, director-general of Airports Council International, a trade group. By providing more services and better shopping, an airport can “keep their aeronautical charges down and entice airlines.”

When it comes to commercial real estate, airports offer the two biggest factors linked to retail success: location and foot traffic. The average time a traveller waits at the airport is more than two hours.

Recognising this, airports large and small are redesigning their buildings and changing the products and services they offer, following the example set over the past two decades by airports in emerging markets. Airports in Hong Kong and Beijing reset the standard with dazzling architecture, capacious restrooms, comfortable seating at the boarding gates and plenty of power outlets throughout the terminals.

Skytrax, an aviation-ranking site based in Britain, has given Singapore’s Changi Airport the award for best airport six years running in part for its butterfly garden, movie theatre, pool and two hotels. Its latest upgrade is the Changi Jewel, a 10-storey hotel and entertainment complex, which opens to travellers next year.

“Our airports cannot compare in their present state to the major international airports in Europe or Asia,” said Rick Cotton, executive director of the Port Authority of New York and New Jersey, which runs Kennedy International Airport and La Guardia. “This country [US] has allowed its infrastructure and its airports in particular to fall far below the global standard.”

When the overhaul of La Guardia’s Terminal B is complete, travellers will be able to see from the escalator “the dynamic environment of a commercial district, with a spa, food, well-curated retail and dining options,” according to Ed Baklor, chief commercial officer for La Guardia Gateway Partners, the private company working on the project.

The project is the US’ largest airport renovation programme, Cotton said. But there are other multibillion dollar makeovers in the works at Los Angeles International Airport and in Chicago, at O’Hare International and Chicago Midway International airports.

Airports executives say they are viewing commercial space with new enthusiasm for the dual role it can play: generating greater sales and attracting more travellers.

Travellers do look for information about airport specifics before purchasing airline tickets, research from Airports Council International shows.

Teresa Lensch, a real estate agent, learnt that some airports are better than others while changing planes at Incheon International Airport in Seoul.

“I love the fact they have massage chairs and movie theatres and you could see groups of entertainers perform plays and mini museums,” said Lensch. “No matter what time it was, there was something you could eat and have a cocktail if you wanted to. I was thrilled and very surprised by that.”

— New York Times News Service