U.S. and Canadian airport expand luxury retail

A number of airports around the U.S. and Canada are expanding their retail areas with high-end shopping options laid out in ways that make them seem more like shopping malls rather than drab airport concourses.

Denver International Airport will undergo a complete overhaul of its food and beverage and retail options over the next three years. A new rail station will mean that 9,000 acres of airport land beyond the terminals will also see a lot of activity. The airport plans to have mixed-use developments built with shops, restaurants, offices and residences over the next couple of decades.

Los Angeles International Airport’s new Bradley West International Terminal has more than 60 new food and luxury retail establishments, including Michael Kors and Fred Segal and a Great Hall for passengers to gather.

Dallas/Fort Worth International Airport’s Terminal A will have 50% more space for concessions and retailers by the end of the month.

Vancouver International Airport will have an entire stand-alone outlet mall adjacent to the airport terminal in 2014.

Matt Honegger, an architect specializing in airports at Fentress Architects in Denver, says now that passengers have to arrive earlier to get through security, airports have to offer them many more options to keep them busy.  “That’s one of the biggest frustrations for travelers: delays, layovers,” he says. “To make that easier, we’re seeing gardens, and better shopping, better dining and healthier dining.”

Airports are maximizing the value of their land at a time when airline bankruptcies and mergers mean less from the rental fees they charge the carriers. They also are tapping into travelers’ increasing thirst for shopping in transit. “Customers are used to wide choice. They go to the mall near their home, and they come to the airport and expect that,” says John Ackerman, chief commercial officer of Denver’s airport.

Revenue for concessions, including food, beverage and retail, was $1.51 billion in 2011, up 12% from 2010, according to the industry group Airports Council International-North America.  Spending on retail represents about 40% of that.

Indicative is Baltimore/Washington International Thurgood Marshall Airport (BWI), which has added more shopping and dining options. Sales there have more than doubled since 2003, says Jim Walsh, chief financial officer. Net revenue was $12 million last year, up from $5.5 million in 2003.

“Airports are looking to try to make themselves as financially self-sufficient as they can to enhance their financial position and also to buttress themselves against the winds of uncertainty in the traditional airport marketplace with airline consolidation,” says Chris Oswald, a vice president at the airports council. He says airports also are responding to customers’ wishes. “There has been, certainly, a trend away from the generic non-branded news and gift stores to higher-end, more appealing and, in many cases, locally themed concessions that kind of blend into the airport’s role as gateways into the community,” he says.

U.S. airports have lagged behind many in Asia and Europe, which long ago turned into marketplaces and entertainment districts. Singapore’s Changi airport, for instance, has indoor gardens and an entire level in one terminal for shopping and dining. Denver’s 18-year-old airport needed an update, Ackerman says. “Our offerings to our customers are good, but some of the concepts are dated,” he says.

That’s why 100 of the stores and restaurants will be updated or replaced with more modern offerings. It also has about 40 kiosks with seasonal items scattered throughout.

Dallas’ makeover also was overdue, says airport spokesman David Magana. The original terminal opened in 1974, “a time when you didn’t have a lot of airport concessions and things like that because you mostly got fed on the plane,” he says.  New retail options will include stores where travelers can buy toys, leather goods and mobile devices, and eat sushi and barbecue.

Atlanta’s airport will have more than 100 new concessions by next year. One of the first free-standing Spanx stores targeting female business travelers opened there in August. “We’re bringing in more and more big names,” says Paul Brown, director of concessions.

Perhaps the most intense airport shopping experience will take place in Vancouver. A 400,000-square-foot luxury outlet mall developed by British-based McArthurGlen Group is to open in fall 2014 next to the terminal and train station.McArthurGlen CEO Julia Calabrese says the goal there is to appeal to the many Asian tourists who tend to shop for luxury goods.

adapted from USA TODAY

Michale Kors store at JFK New York, Terminal 1