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Terminal Configuration Impacts Concession Revenues to the Airport (Click here for a PDF copy of the article) Airport terminal configuration is perhaps the most significant factor in the potential sales volume and delivery of passenger service of every concession program, claim airport specialists Stephen Freibrun and Pat Gleason of airport consultancy SH&E/CAM. Not surprisingly, some building configurations are more effective than others. Freibrun and Gleason share some of their recent projects using architecture to design an experience, rather than a building, and raise revenues in the process. The success or failure of any concession program depends on a number of factors, including building design, selection of tenants, and the management of the program. Building design and the ultimate layout of concession locations may arguably be the most important of the issues. Let’s start by looking at the typical terminal planning process. Most often terminal planning begins with a review of the airport master plan which contains information useful to the terminal planner/designer. Typically, master plans will contain relevant data pertaining to the existing airport facilities, passenger activity forecasts, capacity analyses, estimates of facility requirements, environmental studies, various plans on airport layout, land use, and the terminal area. The terminal plan contained in an airport master plan is normally limited to conceptual layouts and drawings, which the terminal planner/designer refines. Using the near- and long-range passenger activity forecasts, functional and operational facility requirements for the facility are estimated which ultimately lead to the establishment of the terminal building’s size and configuration. The terminal programming then becomes integrated with the design within the financial capacity of the airport. Each airport has its own unique individual characteristics that require consideration in configuring and sizing terminal facilities. These characteristics include passenger characteristics, airline station characteristics, aircraft mix, and the need for major terminal components. Phasing and finally cost estimating follow the design process. It is within the terminal programming phase that concession planning begins to take form. Planners and designers for all sizes of airports struggle with how to design passenger terminals that provide a reasonable financial return to the stakeholders, and efficient passenger services while at the same time considering and incorporating, if possible, hundreds of design and service suggestions received from a diverse and often competing audience of stakeholders. The airport’s commercial managers and chief financial officers are typically included in the group of stakeholders and are keenly interested in the productivity of their new concession program. The financial impact a concession program has on an airport’s rates, fees, and charges should be a major consideration in the planning process. Consequently, it is important that concession program requirements should be considered early in this terminal programming phase. The configuration of a terminal building or concourse, should be developed with consideration of the space and layout requirements of the concession program in mind. No longer should concession programming and design layout requirements be an afterthought to the preliminary design process. Often a concession planner will become involved in a design project after decisions have already been made as to where concessions will be located. Too often, these locations are limited to secondary sites opposite remote holdrooms and in otherwise unassigned space, a scenario that likely does not optimize the airport’s non-airline revenue or passenger satisfaction from concessions. Under today’s conditions, there are opportunities to maximize the spending of each passenger market segment, while incorporating the latest trends in the industry. However, to ensure the creation of a strong and financially productive program, it is essential that the design of a new or redeveloped terminal or concourse identify and preserve the best suited concession locations. The importance of concession locations needs to be raised high in the consciousness of members of the design team. Of course, airport planners have critical operational issues to consider when determining the layout or configuration of a building. Issues such as Airport Operations Area (AOA) circulation, land availability, and budgetary constraints have an impact in the design process. Nonetheless, terminal planners should know that the terminal configuration is a significant, perhaps the most significant, factor in the potential sales volume and delivery of passenger service of every concession program. Not surprisingly, some building configurations are more effective than others. Security Checkpoints and a Great Hall There are two factors in terminal or concourse layouts that have the greatest impact on the volume of concession sales. The first factor is the location and number of security checkpoints. Preferably, passengers should proceed to the secure side of the building through as few security checkpoints as possible. The intent is to prevent passenger traffic from splitting into multiple streams and branching off in different directions. Why is this important? Concentrating passenger traffic permits a concession program to offer a greater number of specialty retail concepts. Many specialty retail concepts will only work in an airport setting with millions of annual exposures. The splintering of traffic into smaller streams minimizes the opportunities for low-capture specialty retail concepts. Sales from these specialty retail concepts are often what drive an airport’s concession program to the highest levels. As an example, consider an upscale jewelry store. Located in the middle of a concourse or terminal that has exposure to 5 million annual enplanements, the jewelry concept can be supported. Conversely, that same concept placed at the end of a concourse with only 1 million enplanements might have difficulty generating adequate sales volume due to insufficient passenger exposures. The second most important factor is the ability to centrally locate a neighborhood of food and beverage, and retail units. Once the traffic is consolidated it should then pass through a carefully designed and programmed shopping and dining environment. Maximizing traffic through a concentrated zone creates an ability to cluster units, and offer fun, adventurous, exciting specialty stores that typically have lower capture rates than necessity retail such as news/book stores. Interlace architectural design elements that reflect the local culture, cuisine, entertainment, and retail scene, and the airport creates a unique people place that conveys that this is the place to shop and dine. This grand hall approach, in essence, allows the architect to design an experience, rather than a building. Attention to these issues converts travelers into shoppers. In turn, the airport will see higher customer satisfaction, higher capture rates, higher sales and, therefore, higher revenues. Two recent exciting examples are Seattle/Tacoma International Airport’s Central Terminal Marketplace and Dallas/ Ft.-Worth International Airport’s Terminal D shopping villages. These airports created a critical mass of concession square footage in an atrium or grand hall space that the majority of passengers transit to or through. Here architectural considerations were given to both terminal functionality and the quality of the experience provided by the terminal to its passengers and employees.
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