Airport Restaurants: Money-Making Opportunities Amid Travel Chaos?

Airport restaurants are highly profitable, but they also come with a unique set of challenges. While airport eateries benefit from high foot traffic and can charge premium prices, they must navigate strict regulations, limited kitchen spaces, and higher operating costs. These costs include higher delivery fees, employee parking fees, and the challenge of staff commuting and getting through airport security. Despite these hurdles, airport restaurants can be successful, as seen by the success of local eateries at Indianapolis International Airport, where food sales generated 62% of its $40 million in concession sales.

Staffing and recruitment challenges

One of the primary challenges is the security clearance process. At some airports, employees may need to undergo a Transportation Security Administration (TSA) screening, which can be time-consuming and costly. Chef Duane Nutter, who runs a restaurant in Atlanta's airport, mentions that many potential employees find other jobs while waiting for the TSA screening process to be completed, which can take up to three weeks. This lengthy process can result in a smaller pool of candidates and increase recruitment costs.

Additionally, the commute and security procedures for employees can be cumbersome and time-consuming. Employees must go through airport security to get to their workplace, which can eat into their break time. The commute itself may also be challenging, as some airports lack employee parking lots, forcing workers to choose between paying high parking fees or taking public transportation. These factors can impact employee satisfaction and retention, especially if employees feel that the benefits and wages do not adequately compensate for these challenges.

The nature of the work itself also contributes to staffing challenges. Airport restaurants often have long operating hours, sometimes remaining open from early morning to midnight, seven days a week. This can be demanding for employees, especially when coupled with the requirement to prepare food quickly, often within a 2-minute window, to accommodate passengers with tight connections.

Furthermore, the work environment and equipment restrictions in airport restaurants can be quite different from those in traditional restaurants. For example, airport concourses may not offer gas lines, limiting cooking options. Knives are often required to be tethered to workstations, and the kitchen spaces are typically much smaller. These factors can make it difficult to recruit experienced cooks, servers, and bartenders who are accustomed to more standard working conditions and may not be willing to adapt to the unique constraints of airport restaurants.

To address these challenges, some airport restaurants partner with companies like HMSHost, which can provide staffing support and handle day-to-day issues like deliveries. However, this option may not be ideal for restaurants that want to maintain full control over their operations and ensure consistent quality.

Overall, the staffing and recruitment challenges faced by airport restaurants are significant and require creative solutions. While these restaurants benefit from high foot traffic and a captive audience, the unique operational constraints and employee-related difficulties must be carefully navigated to ensure a successful and sustainable business.

High operating costs

Running an airport restaurant is no easy feat, and high operating costs are one of the main challenges. These costs can make it difficult for businesses to turn a profit, even with the high volume of customers passing through airports each day.

One significant contributor to high operating costs is the rent charged by airports. Unlike traditional commercial spaces, airport vendors often pay a premium for their location. For example, the Portland International Airport (PDX) charges a minimum annual guarantee of $80 per square foot per year, which is more than double the average cost of Class A rental space in the same area. On top of that, there are often additional fees, such as a commission on sales, which can further eat into profits.

Another factor that drives up costs for airport restaurants is the challenge of delivering food and supplies to the airport. Due to security restrictions, suppliers typically have a small window of time, usually at night, to make deliveries. This can result in higher delivery fees, as suppliers have to work around the airport's schedule. Additionally, airports often require suppliers to have higher insurance premiums to drive onto the airport's loading docks, further increasing costs.

Staffing is also a challenge for airport restaurants, as it can be difficult to recruit experienced cooks, servers, and bartenders who are willing to commute to the airport and deal with the added security measures. This often results in higher turnover rates and increased costs for recruiting, hiring, and training new staff. Even something as simple as an employee's commute to work can be more complicated, as many airports don't have employee parking lots, forcing staff to pay for expensive parking or rely on public transportation.

To make matters worse, airports often have restrictions on product pricing, limiting vendors from charging more than a certain percentage above their "street prices." This means that airport restaurants cannot simply pass on all their increased costs to customers. As a result, they must carefully balance their pricing to generate enough profit to cover their high operating costs.

Despite the challenges, many airport restaurants find ways to make it work, recognizing the potential benefits of a captive audience and high foot traffic. However, the high operating costs remain a significant hurdle, and it's important for businesses to carefully consider these costs before deciding to set up shop in an airport location.

Fixed prices

While airport restaurants are profitable, they come with their own set of challenges. One of the key factors affecting their operations is fixed prices, which are often regulated by the airports themselves. Airports typically impose restrictions on product pricing, allowing vendors to charge only a certain percentage above their "street prices", which are the prices for the same products sold outside the airport. For example, Atlanta's Hartsfield-Jackson International Airport (ATL) limits vendors to charging no more than 10% above their street prices. Similarly, the Indianapolis airport prevents restaurants from charging higher prices than their non-airport locations.

This fixed pricing model can be tricky for vendors as airport rents tend to be high due to the guaranteed foot traffic, and the overall cost of doing business in an airport is generally much higher than in a typical restaurant. Vendors supplying food and other products to airport restaurants often pay higher insurance premiums to access the airport's loading docks, and deliveries are usually restricted to nighttime slots. These additional costs, coupled with the high rents, can make it challenging for vendors to maintain profitability while adhering to the fixed pricing structure.

Despite these challenges, some airports and restaurant owners choose to offer "street pricing" at their airport locations, eliminating the captive-audience markups that have traditionally been associated with airport dining. For instance, the Port of Portland requires all restaurants and shops within the Portland International Airport to offer the same prices as their out-of-airport locations. This approach aims to change the perception of airport food and provide travellers with a more positive dining experience.

While fixed prices at airports may vary, the common goal is to strike a balance between profitability for vendors and affordability for customers. By regulating prices, airports aim to prevent excessive markups while still allowing vendors to cover their higher operating costs. Ultimately, the fixed pricing model at airports aims to create a win-win situation for both vendors and travellers.

Long hours

Running an airport restaurant can be profitable, but it can also be challenging. One of the biggest challenges is the long hours that staff are required to work. Airport restaurants often have extended operating hours to accommodate travellers with early morning flights or late-night layovers. For example, the Country Cat restaurant at Portland International Airport is open from 5 a.m. to 12 a.m. every day, and requires a large staff of kitchen employees to cover these long shifts.

The long hours can be particularly demanding for chefs and cooks, who work in a high-pressure environment with strict time constraints. At airport restaurants, orders must be executed quickly to accommodate travellers who are short on time. For example, at Fresh to Order in Atlanta, food needs to be prepared in just 2 minutes, in contrast to the 6-7 minute turnaround time at their non-airport outlets.

The long hours can also impact employees outside of their shifts. For example, at Atlanta's Hartsfield-Jackson International Airport, vendors are required to stay open past closing time when the final departing flights of the day are delayed. This can result in employees working well beyond their scheduled shifts and facing difficulties with transportation, as public transit may not be running when they finally finish work.

In addition to the long hours, airport restaurants also face challenges with staffing. It can be difficult to recruit experienced cooks, servers, and bartenders who are willing to work at the airport due to factors such as the commute, security checks, and employee parking. At Atlanta's One Flew South, Chef Duane Nutter has encountered staffing problems, as potential employees often find other jobs that don't require commuting to the airport and dealing with security checks.

Despite the challenges of long hours and staffing, airport restaurants can be lucrative. The high volume of travellers passing through each day represents a valuable marketing opportunity for restaurant brands. Additionally, customers tend to spend more on food and beverages at the airport, particularly with the decline in airplane meals. However, it is important to note that the high operating costs, including rent, commissions, and delivery fees, can offset the potential profits.

Complicated delivery processes

One of the biggest challenges of running an airport restaurant is the complicated delivery process. Vendors are required to have food and supplies delivered to the airport and past security, which can be a major headache for businesses. They have to deal with higher delivery fees, as suppliers often charge higher prices for businesses operating near airport terminals.

Small local producers and suppliers cannot simply drop off their products at the restaurant. They need to go through a whole process to get themselves and their products approved by airport security. This can involve paying higher insurance premiums to drive onto the airport's loading docks, and only being able to make deliveries during a small window of time, usually in the early morning hours.

For example, at Atlanta's Hartsfield-Jackson International Airport, vendors are only allowed to receive deliveries at night. This means that restaurant owners cannot quickly restock items or deal with last-minute changes to their menu, as they might in a regular restaurant.

In addition, airport restaurants often have to pay for employee airport parking, which can be quite expensive. For example, at Seattle Airport, an airport food service employee can expect to pay $75 per month to park their car.

Frequently asked questions