Jazmin Li
Running an airport store or restaurant can be a lucrative business venture, with thousands of potential customers passing through daily. However, it is not without its challenges. Airports are typically run by a combination of local, state, and federal governments, with only a few airports in the US being privately owned and operated. This means that setting up a business in an airport can be difficult, with small businesses having to navigate red tape and strict security measures. Airport stores and restaurants must also adhere to unique operating hours, with staff required to work unexpected long shifts due to flight delays. Despite these challenges, many businesses view airports as attractive markets, offering exposure to a wide range of customers and the opportunity to showcase local and global brands.
| Characteristics | Values |
|---|---|
| Number of people passing by | Thousands to millions |
| Exposure | Outstanding global exposure |
| Sales | Rewarding |
| Security | Requires security clearance |
| Employee requirements | All employees must take an online learning course |
| Hours | Opens at least an hour before the first flight and 30 minutes after the last departing flight |
| Airport retail operators | Airport Retail Group, LLC |
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What You'll Learn
- Airport stores and restaurants are attractive markets for consumer and food brands
- Airports are mostly funded by governments and private companies, impacting shop operations
- Security clearance and odd working hours are challenges for airport restaurants
- Small businesses face difficulties securing airport slots, but the sales payoff is rewarding
- Airports seek a balance of global brands and authentic local food and craft items
Airport stores and restaurants are attractive markets for consumer and food brands
Airport stores, meanwhile, are attractive to consumer brands for similar reasons. Airports view themselves as upscale shopping malls for time-pressed but wealthy travellers and business people. This target audience has money to spend and time to browse, making airports an attractive prospect for consumer brands.
The challenge of accessing this market is that airports are mostly run by the government, which means that there is a lot of red tape to navigate. Small businesses, in particular, must jump through hoops to secure slots at airports. There are also challenges unique to the airport environment, such as security procedures and long, irregular opening hours.
However, for those who can overcome these challenges, the payoff can be significant. Airport Retail Group (ARG), for example, has grown from a single store in one airport to 67 locations across 12 airports. With a combination of global and local brands, ARG has found success in the airport retail and food and beverage market.
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Airports are mostly funded by governments and private companies, impacting shop operations
Airports are primarily funded by a combination of local, state, and federal governments, with additional funding from airlines and other sources, such as commercial rents. In most parts of the world, airports are either owned and operated by private companies or jointly managed by governments and private entities. This funding structure influences the operations of shops and restaurants within airport premises.
Airport shops and restaurants are attractive prospects for consumer brands, food businesses, and restaurant concepts due to the high volume of potential customers. Thousands of people pass through airports daily, and these travellers often have time to kill before their flights. As a result, airport shops and restaurants can benefit from high sales volumes. However, setting up a business in an airport comes with its own set of challenges.
Small businesses, in particular, may find it difficult to secure slots at airports due to the extensive bureaucratic processes and high costs involved. Additionally, airport shops and restaurants must comply with stringent security measures, including fingerprinting and security clearance for all employees. This can make simple tasks, such as restocking supplies, more complicated and costly. For example, some airports require vendors to have special badges to deliver goods to the airport, and smaller vendors may not be able to afford the necessary liability coverage.
Airport shops and restaurants also face unique operational challenges. Unlike regular restaurants, airport restaurants often have no set closing times and must remain open until the last scheduled flight arrives, which can lead to unexpected long shifts for employees. This can impact the work-life balance of staff, requiring careful management to ensure adequate rest and personal time.
Despite these challenges, many businesses find the rewards of operating in an airport worthwhile. Airports provide excellent global exposure and sales opportunities for brands, especially those seeking to reach time-pressed but well-heeled travellers and business people. Airports often aim to provide a balance of prestigious national and global brands alongside authentic local food, craft, and product offerings to cater to their target audience and showcase the region's character.
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Security clearance and odd working hours are challenges for airport restaurants
Running a restaurant in an airport comes with a unique set of challenges. One of the most significant difficulties is staffing, as it can be hard to find experienced cooks, servers, and bartenders willing to work the long and odd hours that airport restaurants demand. The issue is exacerbated by the requirement for staff to undergo a TSA screening, which can take two to three weeks for approval and comes at a cost of $160. This often leads to potential employees finding other jobs that do not require such measures.
The working hours of airport restaurants are particularly demanding, with some remaining open from 5 a.m. to 12 a.m. every day of the year. This requires a large staff to cover all shifts, and the odd hours can be a deterrent for potential employees. Additionally, the profitability of these extended hours has been questioned, as most travellers arriving after 10 pm are looking for water and snacks rather than a full meal.
Security clearances also present a challenge for airport restaurants in terms of deliveries and supplies. Small local producers cannot simply drop off their products; they must go through a tedious process to get themselves and their goods approved by the TSA. This adds an extra layer of complexity to the restaurant's operations, as deliveries can only be accepted during a small window of time, typically in the early morning hours.
Furthermore, the security measures implemented by airports can impact the customer experience. Since the security checkpoints have been moved towards the building entrances, non-travellers are less likely to dine at the airport. This reduces the potential customer base for airport restaurants, making it harder to justify the long operating hours.
Despite these challenges, airport restaurants remain an attractive prospect for many chefs and restaurant brands. The high volume of travellers passing through each day represents a valuable marketing opportunity, and the decline in airplane meals has led to increased spending on food and beverages within the airport. While there are hurdles to overcome, the potential rewards of a successful airport restaurant make it a worthwhile endeavour.
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Small businesses face difficulties securing airport slots, but the sales payoff is rewarding
Airports are a bustling hub of travellers and often serve as a mini melting pot of commerce and culture. With passengers from all walks of life, it is no wonder that small businesses see airports as a lucrative opportunity to showcase their brands. However, setting up shop in an airport is not without its challenges, and small businesses must navigate a complex process to secure a slot in this competitive environment.
One of the key difficulties faced by small businesses is the bureaucratic nature of the airport industry. Ramon Lo, publisher of Airport Revenue News, an industry magazine, notes that "getting into the airport can be pretty difficult". Airports operate under a quasi-governmental structure, with layers of regulations and procedures that businesses must navigate. Securing a retail space in an airport requires perseverance and a thorough understanding of the industry's intricacies.
Another challenge is the limited availability of slots. Airports, especially those with high traffic, have a finite number of retail spaces, leading to intense competition among businesses vying for a presence in these sought-after locations. This scarcity of slots pushes small businesses to jump through hoops, often requiring them to showcase their unique value proposition and how they can enhance the airport's overall offering.
Despite these challenges, the payoff for small businesses that successfully navigate the airport landscape can be significant. Airports offer a unique customer base with a high propensity to purchase. Travellers often seek convenience, entertainment, and comfort while waiting for their flights, creating a captive audience for retail therapy and dining experiences. Snow delays, for instance, can result in increased sales as stranded passengers turn to shops and restaurants to pass the time.
Additionally, the airport environment provides a platform for small businesses to build brand awareness and reach a diverse, global audience. It allows them to tap into a market that may otherwise be challenging to access through traditional retail channels. The sense of community and camaraderie among airport retailers can also foster a supportive ecosystem, enhancing the overall traveller experience.
While securing airport slots may present hurdles for small businesses, the potential rewards make it a worthwhile endeavour. With perseverance, adaptability, and a keen understanding of the airport industry, small businesses can reap the benefits of increased sales, brand exposure, and a unique connection with travellers from around the world.
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Airports seek a balance of global brands and authentic local food and craft items
Airports are operated through a combination of local, state, and federal government funding, as well as funding from airlines and other sources such as rent from restaurants and shops. However, most airports around the world are owned and operated by private companies or a mix of government and private funding and management.
Airports view themselves as upscale shopping malls for well-off travelers and business people. They want to offer a balance of national and global prestige brands, as well as authentic local food and craft items to make each airport unique and representative of its region. This provides opportunities for local food and product businesses to access airport retail and food and beverage companies or lease space.
Large global companies, known as master-concessionaires, often win bids for whole terminals and then sub-lease sections to smaller local businesses. This allows airport management to deal with fewer vendors directly and gives local businesses access to the advantages of partnering with larger companies.
The demand for authentic and unique dining experiences is increasing, and airports are capitalizing on this trend by offering passengers a taste of local culture, from iconic local food brands to street food pop-ups. This focus on local cuisine also aligns with broader consumer trends toward sustainability and conscious consumption, with passengers seeking out eco-friendly and socially responsible options.
Technology is also playing a pivotal role in reshaping the airport food and beverage landscape, with passengers seeking control through self-ordering kiosks, AI-powered recommendations, and mobile ordering apps. Digital ordering systems provide convenience and reduce pressure on staff, while also increasing average transaction sizes.
Overall, airports seek to balance global brands with authentic local offerings, creating a cohesive and memorable passenger experience.
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Frequently asked questions
Airport stores and restaurants are run by a combination of local, state, and federal governments, as well as private companies. In the US, most airports receive funding from the government and, therefore, are run by the government. However, a few airports in the US are privately owned and operated.
Running an airport store or restaurant comes with a unique set of challenges. Some of these include:
- Long and irregular hours: Airport restaurants often need to remain open at least an hour before the first flight and 30 minutes after the last departing flight, which can be taxing on employees.
- Security: Airports have strict security measures, and all employees must undergo clearance and take an online learning course.
- Supply issues: It can be difficult to restock supplies, especially for smaller vendors, as they need to be badged to deliver to the airport.
- High competition: Airports are an attractive market for consumer and food brands, so competition for retail space can be fierce.
Despite the challenges, there are several benefits to running an airport store or restaurant:
- High foot traffic: Airport restaurants have a constant stream of potential customers who are often time-rich and looking for ways to spend their time.
- Global exposure: Airports provide an opportunity for brands to gain exposure to a diverse range of travellers and business people from around the world.
- Sales: The combination of high foot traffic and a captive audience can result in excellent sales.
Opening an airport store or restaurant typically involves partnering with an airport concession company or working with a company that has experience in the airport retail industry. It is important to consider the unique challenges and opportunities of the airport environment and how your brand or concept could fit into the mix.
