Airports: Designed To Make You Spend More

Airports employ a variety of tactics to increase revenue and encourage passengers to spend more money. This is known as 'non-aeronautical revenue' and can include anything from retail concessions to car parking and on-site hotels. The time between passing through airport security and boarding the plane is known as the golden hour, during which passengers are more likely to spend money. Airports use various strategies to maximise this time, such as speeding up the check-in process and creating a stress-free environment. The design of the airport, including the layout of the duty-free area and strategic placement of merchandise, also influences spending behaviour. With limited dining options, airports can charge higher prices for food and beverages, and duty-free shopping may not always offer the best deals. Airports also generate revenue from parking fees, advertising, and rental spaces for airlines and retailers.

Duty-free shopping

Duty-free shops sell products without certain taxes and duties that are usually imposed by countries on imported goods. This means that, in theory, you can make significant savings on certain items. However, this isn't always the case, and it's worth doing some research before buying. For example, it's often cheaper to buy items like electronics, candy, and perfume in local shops before you get to the airport.

The items that offer the most savings are usually those that are heavily taxed, such as cigarettes, alcohol, and luxury goods. For example, Dubai International Airport is the cheapest place to buy tobacco, while Stockholm Airport offers the best value alcohol on average. If you're a US citizen, you can also bundle your duty-free exemptions with those of your spouse to avoid paying customs when you arrive back in the US.

Airports also use various tactics to increase the chances that travellers will buy duty-free goods. For example, after security, most airports funnel people through the duty-free shop, and the path usually veers to the left, leaving more space for items on the right. As most people are right-handed, this increases the likelihood that they will buy something. Airports may also delay announcing gate numbers until 25-90 minutes before a flight, giving passengers more time to shop.

Food and drink

Firstly, airports create a captive market. Once you've passed through security, bringing in food and drinks from outside is prohibited. As a result, you're confined to the available options within the airport, and vendors can charge higher prices because they know customers are willing to pay more. This dynamic is often described as a monopoly, with limited alternatives, and customers are forced to pay higher prices or go without.

Secondly, the cost of operating a food business in an airport is significantly higher than in a typical commercial space. Rent for commercial space at airports is more than double the average cost outside, and vendors often have to pay a percentage of their revenue as a concession fee to the airport authority. These fees can be substantial and are passed on to consumers. For example, Portland International Airport charges businesses a minimum of $80 per square foot per year or 10-18% of sales, whichever is greater.

Additionally, airport vendors face higher transportation and delivery costs. They are required to have food and supplies delivered within the airport's secure area, which can be a logistical challenge and incur higher delivery fees. Vendors may also need to rent off-site storage space, further increasing costs.

Employee-related costs are another factor. Airports are often located remotely, so companies have to cover a portion of their employees' travel expenses and provide higher pay to attract workers. High employee turnover rates in airports also mean businesses incur frequent costs for recruiting, hiring, and training new staff.

The combination of these factors results in the high prices of food and drinks at airports. While it can be frustrating for travellers, businesses are simply passing on the increased costs of operating in an airport environment.

Airport parking

To save money on airport parking, it is recommended to compare prices at different airports and consider the duration of your stay. Long-term parking lots, usually located further away from the airport terminals, offer more affordable rates than short-term parking lots, which are typically located near the terminals. Additionally, booking in advance or during off-peak times can also help secure better deals.

Before your trip, it is worth checking coupon websites and discounted parking websites, such as SpotHero, BestParking, ParkWhiz, and Cheap Airport Parking, to find potential savings. Additionally, consider using public transportation, ride-sharing services, or car-sharing services like TravelCar to avoid parking charges altogether.

Some airports also offer valet parking, which can be more expensive, and it is worth noting that parking rates can vary significantly even within the same airport, so it is important to be mindful of where you park your car.

By planning ahead and utilizing available resources, you can significantly reduce your airport parking expenses and make your travel experience more enjoyable and cost-effective.

Advertising

Passengers are often in a positive mindset, feeling a sense of excitement for their upcoming trip. This makes them more receptive to advertising messages and more likely to spend money. In fact, 73% of passengers like to treat themselves at the airport. Furthermore, 70% of global shoppers admit they would be encouraged to visit the airport shops after seeing advertising for products available in the airport.

The nature of the airport environment also lends itself to innovative and eye-catching advertising formats such as digital screens, billboards, and experiential marketing. These formats create memorable and impactful campaigns, positioning brands as leaders in their industry. For example, during Calvin Klein's 4-week experiential campaign for its Euphoria fragrance in Terminal 5, WDF sales saw a rise in year-on-year sales of +268%.

The cost of airport advertising depends on the airport size and the specific location within the airport. Advertising in bigger airports and in high-dwell time areas such as departure gates is more expensive. However, smaller airports can offer longer ad durations at reasonable prices.

Relaxing environments

Airports are stressful places, with crowds of people rushing to their gates, panicking about missing their flights, and dealing with crying children. It is therefore no surprise that airports have implemented various tactics to create a more relaxing environment for their passengers.

Firstly, airports have installed small spas and massage chairs to keep people relaxed. Some airports, such as Gatwick Airport outside London, keep passengers in a large terminal surrounded by shops and restaurants until their gates are called, essentially forcing people to shop or dine. The more relaxed you are, the more likely you are to spend. In fact, studies show that a 1% increase in passenger satisfaction leads to a 1.5% increase in sales.

Airports also use various design tactics to encourage spending. For example, in some airports, the walking paths in duty-free veer to the left, leaving more space for retail on the right. This leads to more profits because most people are right-handed and will spend more time looking to the right. Airports also strategically place signs that indicate walking times to gates and gate locations to keep passengers stress-free and satisfied. Even the restaurants are designed with big windows, relaxing music, and outlets to keep passengers happy and in the mood to spend money.

Some airports, such as Vancouver International, have plants throughout their terminals to create a more peaceful, serene environment, while others, like Sacramento International Airport, offer free Wi-Fi and tasty pre- and post-flight food options. Deluxe airport lounges also provide a more relaxing experience, with places to nap, shower, exercise, and meditate. These lounges often require an additional fee or access to business or first-class tickets, but they can be a great way to relax and unwind before a flight.

By creating a relaxing environment, airports can enhance the flying experience for their passengers and increase the likelihood of passengers spending money during their time in the terminal.

Frequently asked questions