Entry in Airport Concessions

[Gary]

It's been a very productive year, though at times it felt crushing. Now that the dust has settled, my wife find ourselves owning our commercial property in San Diego via our revocable living trust. With the trust, upgraded life insurance, disability insurance and now key-man insurance in place, we feel like such grown-ups.

Nevertheless, I am looking to expand my business in a very narrow channel: airports. As you all know airport concessions at many airports are improving drastically. Food selection, ambience and service have all seen upgrades as more B&M establishments push out traditional airport hospitality providers.

I currently operate a successful lounge in San Diego. At one time, my then-partners and I had four establishments: one in San Diego, two in Los Angeles and one in Louisiana. Having sold them all off save the one in San Diego, I've been laying low the last three years focusing on improving its fortunes and helping my wife grow her day spa. But I believe that my concept fits perfectly in select airports and I need concession partners to make that happen.

I had a contact a firm that partners with brands for airport operations, though their expertise is in retail shops only. He has since fallen off the map.

Does anyone know of any executives in the airport hospitality industry that they could introduce to me?

My motive is to learn more about how to launch such a venture, expectations of revenue, expenses and regulation, and discuss trends. I do not want to ask them to partner with me or provide any financial assistance. I don't want anyone to feel obligated to listen to a pitch. I just need information from an experienced hand.

I fully intend to start attending conferences in the industry, but I'm looking to get a head start now.

Appreciate it,
Gary

 

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[AubreyJ]

I don't know much about this industry, but I do know that airports are VERY expensive to get into- rent for an airport location, especially at a large/international airport will be ridiculous. Keep that in mind while moving forward with this project

 

[Bigguns50]

The Detroit Metro Airport here is beautiful and busy.

I researched how to get business into that airport and it looks very difficult.
Some info: http://wcaa.us/Business/BusinessOpportunities.aspx#concession
The requirements for consideration are high.

website http://www.metroairport.com/TravelerInfo/EatShopServices/McNamaraterminal.aspx

 

[Gary]

@Bigguns50, thank you for the links, and coincidentally you went right to DTW in your response. I was reading an article just this morning about the 25 new food and beverage concepts that have begun construction at McNamara Terminal.

To your point, yes it's very difficult to get into a lease on airport properties. However, anything worth having is worth working for.

To add to the conversation, there are two reasons why I want to place my concept in the right airports:

1) The captive audience.
2) Though expenses and regulations have historically hindered large profits for small operations, the exposure to thousands per day would fuel opportunities to expand outside of airport properties. In other words, if you're not losing money, I think it's an incredible marketing platform.

 

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[Gary]

In 6 months I've come a long way since asking for advice here on the Forums. Here is a condensed version of what has transpired so that 1) it doesn't appear I asked for help then shrunk away, and 2) it might help someone considering the business:

1) I began to read everything that was related to the industry: magazines, gov't reports, airport websites
2) I bought a ticket for the annual industry conference that focuses on airport concessions. Expensive ticket and it happened at the same time as 2015 Meetup, but well worth it.
3) Fleshed out my design, then hired an interior designer to professionally create a CAD layout and 3-D renderings.
4) Cold-called the Airport Concessions manager at San Diego International for advice. VERY HELPFUL.
5) Started networking within my sphere of influence, telling everyone of my plans. Then got introduced to the Real Estate Manager for San Diego International. He was very helpful via phone, and when I met him at the industry conference, he was extraordinarily generous with his time.
6) Created my pitch deck that explain the Why and the What of my plans.
7) Secured a good friend and influential chef and restaurant owner as my partner to further enhance my credibility (and menu).
8) Attended the 3.5 day conference last week and made a point to have as many meaningful conversations as possible. The results were remarkable. As part of the conference, I was rotated at tables with 6 major airports to discuss my concept one-on-one with the people that manage concessions business. Invaluable!

What happens now? First, based off the feedback and advice, I need to plan on 3-5 years to get into an airport. Available real estate is limited and the industry is hyper competitive. Additionally, buildout costs in domestic airports are now coming in at $900+ per sq foot, all borne by the operator (me).

My architect has agreed to take on my project and give me a more advanced rendering that will be able to sell my concept more easily. To conserve my cash, he and his partners are trading their services for a party here at my venue.

The next several months are about being prepared, constantly refining what I am doing, and furthering relationships with the players in the industry.

 

[Clayton]

Wow. Sounds like things are on track.

You get 6 one-on-ones just by attending the conference? How does that work? Do the managers want businesses enough to sit down with anyone willing to attend the conference or do you think they are compensated some how? Just curious.

Thanks for sharing.

 

[Vigilante]

Once you get in, you have a dedicated audience with above average disposable income and time to kill. It will all be worth it. Incredible barriers to entry that most people won't grind through.

 

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[LibertyForMe]

http://en.wikipedia.org/wiki/Chuck_Feeney

 

[Gary]

Wow. Sounds like things are on track.

You get 6 one-on-ones just by attending the conference? How does that work? Do the managers want businesses enough to sit down with anyone willing to attend the conference or do you think they are compensated some how? Just curious.

Thanks for sharing.

Clayton,

About a week before the conference begins, the organizers send out a grid where you get to choose 5 airport concession principals to sit down with. 6 minute intervals to establish a rapport and get them interested. Speed networking. I got an additional airport because someone didn't take the time slot they had reserved, so I volunteered to take it.

 

[Gary]

Once you get in, you have a dedicated audience with above average disposable income and time to kill. It will all be worth it. Incredible barriers to entry that most people won't grind through.

Thanks for the support! An update after yesterday's events: through a client of my wife's I got a phone introduction to a concessions manager of one of the three busiest airports in the country. Had a lengthy conversation explaining the concept and my experience. I sent him my design and background materials and he stated unequivocally that my concept is perfect for his airport. Still plenty of hoops to jump through, space has to open up (though construction over the next 36 months is slated to add plenty of Food and Beverage opportunities), and money needs to be raised, but it's steps like this that will propel me towards the 3-5 year timeframe goal.

 

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