North American airport modernizations place focus on optimizing concessions - Travel Markets Insider

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North American airport modernizations place focus on optimizing concessions - Travel Markets Insider
Special Issue
     TFWA
World Exhibition
 October 2022

North American airport modernizations place focus
                                                                                                                           INSIDE INSIDER
on optimizing concessions

                                                                                                                           Harper Dennis Hobbes Executive
                                                                                                                           Director Simon Black and Senior
                                                                                                                           Managing Director Nadine Heubel
                                                                                                                           target North America

                                                                                                                           Rouge Duty Free opens the first Creed
                                                                                                                           boutique in the Caribbean

The famed Jeppesen Terminal at Denver International Airport, site of one of the most ambitious development plans in the
United States. TMI speaks with Concessions Planning International, which is advising DEN as it creates and implements a
concessions program that is a benchmark in North American airports. See story on page 26.

      With U.S. airports like New              TMI also speaks with Susan             recovery in Latin America.
York’s LaGuardia and Newark               Gray, of Concessions Planning                    Another sign of renewed
Liberty Airport undergoing                International, about its work with          business confidence in the travel
massive modernizations, and               Denver International Airport.               retail channel is the swell of new
                                                                                                                           Fantasy Fragrances, LLC rolls out the
air traffic predictions growing           CPI is helping DEN create a                 fragrance launches, complete
                                                                                                                           new Frida Kahlo-inspired fragrance
stronger, this issue of Travel            concessions program designed to             with exciting HPPs at the            in the Americas
Markets Insider looks at how              be a “benchmark for decades to              Point of Sale. We are delighted
airport concessions can better            come.”                                      to cover several of the new
serve the traveling public – and               Although travel retail still           products here.
provide more income to the                faces many challenges, Duty                      As part of our broad-based
airport.                                  Free Americas, for one, appears             spirits coverage, TMI also takes
      TMI speaks with Simon               to have come through the worst              an in-depth look at the future of
Black, Executive Director of              of the crisis in relatively strong          gin consumption in the Americas
Europe’s leading travel retail and        condition. DFA CEO Jerome Falic             travel retail channel, prepared
airport concessions consultancy,          credits the company’s spread of             specially for us by spirits expert
Harper Dennis Hobbs, about                geographic locations and variety            Joe Bates.
his plans for expansion into the          of operating models for the                      We hope you all enjoy all        Joe Bates reports on the gin
North America market. HDH’s               success.                                    this and more, Inside Insider,        business in the Americas travel
recent hire of former Heinemann                TMI also focuses on more               and look forward to seeing you        retail market.
Americas CEO Nadine Heubel                new store openings in the                   in Cannes at the TFWA World
shows how serious they are about          Caribbean, including the debut              Exhibition & Conference.
                                                                                                                           Plus Products-People-Places
ramping up their operations in the        of the first Creed boutique in the          Lois Pasternak
                                                                                                                                 The Insider View
region.                                   islands, and analyzes the fledging          Editor/Publisher
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North American airport modernizations place focus on optimizing concessions - Travel Markets Insider
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North American airport modernizations place focus on optimizing concessions - Travel Markets Insider
TABLE OF CONTENTS
                                                        Retail and News Features

    NUMBERS & ASSOCIATION NEWS                                  Latin America
    m1nd-set: how to appeal to younger                          Slow economic recovery to gather
     shoppers when they travel          		Page 8                 pace in fourth quarter                     Page 38
    WTTC: Domestic travel keeps U.S. #1                         Brazil to privatize both Rio airports       Page 39
     as world’s biggest travel market		Page 12                  Ezeiza’s Mega-sweepstakes returns           Page 39
    TFWA Conference and workshops                               Eco updates: Brazil & Uruguay               Page 39
      focus on post-pandemic era 		Page 14                      Aena wins management of 11 airports
    IAADFS: 2023 Summit promises more                            in Brazil                                  Page 40
     flexibility and broader audience		Page 18
                                                                BEAUTY
    North America                                               Essence Corp animates at POS as
    Hawaii shows recovery with return of                         fragrance sales rebound                    Page 42
    90+% of tourists		Page 16                                   Lolita Lempicka returns to the Americas     Page 46
                                                                IBBI brings ICONIC to TRA                   Page 46
    Dufry’s new “Destination 2027” strategy		Page 20            Frida Khahlo perfume debuts                 Page 48
    DFA: Diversified geographic and                             Reba Americas launches fragrances for
     business models bolster recovery		Page 22                   super stars Maluma and Billie Eilish       Page 50
    Hudson expands U.S. footprint		Page 25                      Tairo honors BAs with an early Christmas    Page 50
    Canada border businesses down 45%		Page 33                  Lendava expands line, wins honors           Page 50

                                                                ACCESSORIES
    SPECIAL COVER FEATURES
                                                                Montblanc unveils “On the Move” vision      Page 52
    One on One with CPI’s Susan Gray: How
     Denver International Airport is creating                   SPIRITS
     a benchmark concessions program		Page 26                   Special Report:
                                                                 Gin takes aim at the Americas              Page 54
    Harper Dennis Hobbs: Powerhouse retail
     consultant brings its vision and expertise                 Tito’s “storms back” as it turns 25         Page 60
     to North America Travel Retail               Page 30       Talisker launches travel retail exclusive   Page 62
                                                                FlyWithWine debuts innovation in Cannes     Page 62
    CARIBBEAN & CRUISE                                          Also: Champagne Lanson, Glenfiddich,        Page 63
    Rouge to open first Creed Boutique                          Brown-Forman, Mijenta Tequila,
     in the Caribbean + 2 stores in Tulum		Page 34              Pernod Ricard, Chivas, Distell, Bacardi
    Cardow family expands into liquor
      business in St. Thomas		Page 36                           Grey Goose and International Shoppes
    Cruise industry begins strong rebound		Page 37               celebrate the US Open at JFK               Page 70

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INSIDER

 How to appeal to younger shoppers when they travel:
 m1nd-set analyzes Millennials vs Gen Zs
      In one of its most recent studies, travel
 research agency m1nd-set took a deep look
 at how travel retailers should best market
 to younger consumers when they travel.
 The two-month age-demographic specific
 research found significant differences and
 unique trends between Millennials and the
 younger Gen Zs.
      In its August newsletter, m1nd-set
 explained that the research looked at the
 importance of both of these age segments,
 comparing their behavior to that of all
 passengers, and analyzed how they buy,
 what they buy, why they buy and how
 much they spend among a range of other
 behavioral traits.
      Millennials –who were born between
 the early 80s and mid 90s and are currently
 aged between 26 and 41, have much more
 spending power than the Gen Zs segment,          following the interaction, while only 67%                 Peter Mohn, Owner & Chief
 who are currently aged between 10 and            of Gen Z shoppers said they purchased a             Executive Officer at m1nd-set, explained:
 25. But Gen Zs represent around one third        product thanks to the interaction.                  “It is extremely important for travel retail
 of the global population and their share of                                                          marketers marketing to Millennials and
 consumer spend will grow significantly.          Reaching out: Touch Points                          Gen Z traveling consumers to understand
      In its newsletter, m1nd-set notes that           Another significant difference in              where to reach their target audiences when
 while Millennials were the first generation      shopper behavior is how Gen Zs and                  they are not traveling. For both these age
 to grow up in the age of the internet, Gen       Millennials react to communications touch           segments, it’s clearly online where they
 Zs are the first generation to grow up in the    points. More than half of Millennials               can be found but among Gen Zs it’s most
 age of mobile internet and social media,         (55%) notice touch points prior to their            commonly on the mobile and via certain
 and this impacts how and when to reach           purchase in GTR when traveling. This is             social media services.”
 them when they travel, says m1nd-set.            above the 47% reported for all passengers.                Mohn says that “Platforms such as
                                                  Significantly, only 15% of the Gen Zs say           TikTok have to be integral to the marketing
 Engagement                                       they noticed touch points prior to purchase.        mix for marketers who are intent on
       There are significant differences in       This indicates the generational behavior            reaching Gen Z shoppers while Millennials
 how the two groups react when shopping.          differences in general regarding how and            are more prone to be across multiple
 One major difference, m1nd-set reports, is       where the various age groups source and             platforms such as Facebook, Instagram and
 their respective tendency to engage with         digest their information.                           Twitter.”
 important shopping influencers, such as
 communications touch points and sales
 staff. Gen Zs tend to approach the sales
 associates in Duty Free shops considerably                      Editor/Publisher: Lois R. Pasternak
 less than Millennials. Only 38% of the                          In Memoriam: Paul A. Pasternak
 younger age segment say they engage                             Executive Editor: Michael Pasternak
 with sales associates, 30% lower than                           Editorial Contributors: John Gallagher, Joe Bates
 Millennials, 68% of whom interact with                          Production Coordinator & Designer: Chris Hetzer
                                                                 Design and Production: It’s About Time, Inc.
 store staff. Millennials also tend to engage                    Webmaster: Michael Pasternak
 with sales associates more than average,                        Printing by The Printer’s Printer. Ft. Lauderdale, Florida
 since 65% of travelers from all age groups                      This publication is a special supplement of Travel Markets Insider, published
                                                                 by Pasternak Communications, Inc., 255 NE 3rd Ave No. 312, Delray Beach,
 interact with sales staff.                                      FL. 33444 USA. www.travelmarketsinsider.net
       The impact of the interaction is also                     E-mail: editor@travelmarketsinsider.net
 lower among Gen Z shoppers, reports                             Tel (561) 908-2119
                                                                 Travel Markets Insider is a weekly newsletter distributed 50 times a year
 m1nd-set. More than eight out of ten                            via e-mail, on a subscription basis only.
 shoppers among Millennials and all age                          The annual subscription is US$200. Printed in the USA. All rights reserved.
 groups combined report a positive outcome                       © 2022 by Pasternak Communications, Inc.

 October 2022                                                             8
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North American airport modernizations place focus on optimizing concessions - Travel Markets Insider
INSIDER

                                                                                                     Mohn added: “Although a sizeable
                                                                                                proportion of the Gen Z consumer
                                                                                                generation is still below 18 and whose
                                                                                                purchasing power barely surpasses their
                                                                                                parents’ allowance, the potential among this
                                                                                                generation – both as future customers and
                                                                                                disruptors – is not to be underestimated.”

                                                                                                Socially conscious
                                                                                                      “Both Millennials and Gen Zs have
                                                                                                a strong tendency to favor sustainable
                                                                                                practices when shopping in Travel Retail,”
                                                                                                Mohn continued. “While they are keen on
                                                                                                championing brands with a strong social
                                                                                                and environmental impact and story, they
                                                                                                are equally intent on shouting out on social
                                                                                                media about less virtuous brands and will
                                                                                                be quick to name shame companies and
                                                                                                brands which do not demonstrate ethical
                                                                                                and environmentally friendly practices.
                                                                                                This is particularly true among Gen Zs,”
                                                                                                Mohn concluded.

                                                                                                Planned vs impulse
                                                                                                     m1nd-set also reveals that Millennials
                                                                                                are more apt to plan their purchase in
                                                                                                Travel Retail (79% vs 64% for Gen Zs),
                                                                                                but more Gen Zs purchase on impulse
 Spending trends                                     One of the major differences is the        (36% of Gen Zs compared to 21% among
      Average spend is another area where      overall spend among both age groups.             Millennials and 18% among all age
 m1nd-set reports considerable differences     Whether in domestic or Travel Retail,            groups).
 between Millennials and Gen Z consumers       Millennials represent a higher proportion             Gen Zs are also keener to enter
 in Travel Retail. Spend among both age        of the overall consumer spend. Both              the physical store, says m1nd-set (49%
 segments is significantly lower than the      generations combined currently represent         compared to 38% among Millennials and
 average among all age groups which is         just over 30% of total retail spend, but this    44% of all passengers). Once in the stores
 US$101.                                       share is set to increase to 48% by the end       however, Millennials tend to purchase
      For Millennials, average spend is $70,   of the decade.                                   more; 23% of Millennials purchased
 with the highest spend allocated to the             In Travel Retail, the spend is currently   compared to 17% of Gen Z shoppers and
 Electronics category at $124, followed by     6% among Gen Z consumers and 25%                 22% of total passengers, generating a
 Jewellery & Watches at $118 and Fashion       among Millennials. According to m1nd-            conversion rate of 61% for Millennials,
 & Accessories at $98.                         set the Millennials’ share of spend in           35% among Gen Zs and 50% for all
      Average spend in Travel Retail among     Travel Retail will increase by only a few        passengers.
 Gen Z shoppers is considerably lower at       percentage points by the end of the decade            More information on m1nd-set’s
 $44, with the highest spend being allocated   while the growth in spend by 2030 among          research and consultancy services can
 to Perfumes at $111, Electronics, $103 and    Gen Zs consumers is expected to be more          be obtained from m1nd-set by writing to
 Alcohol, $61.                                 than threefold.                                  info@m1nd-set.com.

 October 2022                                                          10
11   October 2022
INSIDER

 WTTC: Domestic travel helped U.S. retain its position as the
 world’s biggest Travel & Tourism market
       The latest World Travel & Tourism        11th position in 2021.                                 grow more than 41% this year. For the next
 Council’s Economic Trends Report,                    Across Asia-Pacific, major Travel                10 years, it predicts business travel could
 released Sept. 6 and conducted by Oxford       & Tourism markets saw huge losses                      grow an average of 5.5% annually and may
 Economics, ranks the U.S. as the world’s       in international spending. In addition                 return faster in the Asia-Pacific region.
 biggest and most powerful Travel &             to China, countries like Thailand and                        WTTC predicts by 2032, China will
 Tourism market by GDP contribution.            Japan, which ranked fifth and eighth in                overtake the U.S. to become the world’s
       But WTTC notes that the rankings         international visitor spending before the              biggest Travel & Tourism market.
 in the U.S., like other top economies,         pandemic, fell out of the top 20 altogether                  The research shows China’s Travel &
 are bolstered through high numbers of          in 2021.                                               Tourism contribution to GDP could reach
 domestic travel, as international visitor                                                             $3.9 trillion by 2032, making it the world’s
 numbers plummeted.                             Business Travel and China growth                       most powerful Travel & Tourism market,
       Despite its number one position, the     outlook is positive                                    and India could leapfrog Germany to reach
 U.S. Travel & Tourism’s contribution to             According to WTTC’s forecasts,                    third place with a projected value of $457
 the U.S. economy fell by $700 billion from     worldwide business travel is expected to               billion.
 2019, to just under $1.3 trillion last year.
       WTTC ranks China second and
 Germany third for sector GDP con-
 tributions, representing no change in
 ranking since 2019. However, total sector
 economic contribution in both countries
 declined versus 2019.
       China contributed more than $814
 billion to the Chinese GDP last year
 (vs. $1.86 trillion in 2019); Germany’s
 contributions to its economy were $251
 billion compared with over $391 billion in
 2019.
       The UK slipped dramatically from
 fifth place in 2019 to ninth in 2021, with a
 contribution of just over $157 billion, the
 biggest fall among the top 10 countries.
       Julia Simpson, WTTC President
 & CEO, said that the report shows the
 resilience of the Travel & Tourism sector.
       “Despite a challenging macro
 environment, Travel & Tourism has
 bounced back. The world, with some
 exceptions, is traveling again. And we are       Thw chart above compares the contribution of Travel & Tourism to GDP against the 2019 level.
 seeing a resurgence in business travel. Over     For instance, the sector’s contribution to GDP in Europe was 47.1% below the pre-pandemic level
 the next 10 years, Travel & Tourism growth       in 2020, and the gap reduced to 32.3% below 2019’s level in 2021, showing a strong rebound. It is
 will outstrip the overall growth rate of the     estimated that the sector’s performance in Europe could surpass 2019’s level in 2024 when Travel
 global economy.”                                 & Tourism contribution to the region’s GDP could reach 4.1% above the pre-pandemic amount.
                                                  Asia-Pacific is forecasted to be the first region to revert to the 2019 scenario (in 2023), while all the
 International visitor spending                   other regions are estimated to recover completely in 2024.
      In terms of international traveler          In 2022, as travelers’ confidence improves, the global Travel & Tourism sector is estimated to
 spend, France, which was ranked fourth           hasten its pace of recovery to 43.7% compared to 2021 and add a further 10 million jobs. WTTC
 before the pandemic, overtook Spain,             says that the sector is likely to return to pre-pandemic levels around the end of 2023 and the
 China, and the U.S. to grab first place.         preliminary data for the first half of 2022 supports this forecast.
                                                  Looking at a longer-term forecast, between 2022 and 2032, Travel & Tourism’s contribution to the
      China, which remains closed to much
                                                  global economy is expected to grow at an average annual rate of 5.8% which is more than double
 of the rest of the world, was in second
                                                  the 2.7% average annual growth rate estimated for the global economy. In that same period, the
 place for international visitor spending
                                                  sector is forecasted to generate 126 million additional jobs.
 before the pandemic but fell dramatically to

 October 2022                                                              12
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INSIDER

   Erik Juul-Mortensen, TFWA President; David McWilliams, Adjunct Professor of Global Economics at Trinity College Dublin’s School of Business;
   Raymond Cloosterman, Founder and CEO of Rituals; Swan Sit, AF Ventures Operating Partner

 TFWA Conference and workshops focus on post-pandemic era
       The conferences and workshops              who will address brand-building in a               Property Director Fraser Brown, Incheon
 at the 2022 Tax Free World Exhibition            changing world. Cloosterman’s Unilever             International Airport Corporation Director
 & Conference will offer a content-rich,          background and creation of a luxury                Duty Free Management Team Sung Bin Im,
 business-relevant format that will focus on      lifestyle chain make him ideally qualified         and Chief Digital & Commercial Officer of
 key themes for the post-pandemic era, says       to discuss all matters branding.                   Istanbul Airport Ersin Inankul.
 organizer TFWA.                                        The Conference will also look at life              Topics for discussion will include
       From economics and the Metaverse,          in the Metaverse with the help of a global         the evolution of the airport retail business
 to brand-building in a changing world, the       expert on new digital technologies: Swan           model, new customer trends and spending
 opening Conference of the 2022 TFWA              Sit, Operating Partner of AF Ventures,             patterns, changes to the airport retail mix,
 World Exhibition & Conference will               a Leading Voice on Clubhouse and the               and the integration of digital into the
 address some key trends shaping duty free        former Global Head of Digital Marketing            commercial offer. The panelists will also
 and travel retail in the aftermath of the        for Nike, Revlon, and Estée Lauder. This           explore some of the challenges faced by
 COVID-19 crisis.                                 is a topic of great relevance as the Travel        airports and airlines over the European
       Taking place from 9-11:45 CET on           Retail industry increasingly harnesses             summer season, and the travel industry’s
 Monday Oct. 3, in the Grand Auditorium of        the power of artificial intelligence and           preparedness for the return of pre-2020
 the Palais des Festivals, the TFWA World         augmented reality.                                 international traffic levels.
 Conference will open with a State of the               The TFWA Conference is being                       The Innovation in Action session
 Industry address from TFWA President             moderated this year by Juliet Mann, an             will look at the latest developments in
 Erik Juul-Mortensen.                             experienced TV anchor, specializing in             customer engagement courtesy of speakers
       Juul-Mortensen will be followed by         business news. She was a correspondent             including Intelligent Track System Founder
 a discussion between David McWilliams,           for CNN’s weekly business features show            & CEO Morten Pankoke and Founder &
 Adjunct Professor of Global Economics            Marketplace Europe and is currently host           CEO of Inflyter Wassim Saadé. Also on
 at Trinity College Dublin’s School of            of The Agenda, the weekly current affairs          the program are Alexander Trieb, Founder
 Business and one of the most authoritative       talk show on CGTN.                                 and CEO of Duffle, a digital travel retail
 – and entertaining – voices on economics                                                            marketplace, and John Williams, Global
 and geopolitics today; and Raymond               TFWA workshops                                     Scotch Director at Diageo.
 Cloosterman, Founder and CEO of Rituals,               The popular TFWA workshops return                  This workshop will showcase some
                                                  this year, with two sessions scheduled             of the latest technological solutions that
                                                  during lunchtime on Tuesday, Oct. 4, for           are helping brands and retailers engage
                                                  The Airport Forum; and Wednesday, Oct.             travelers in new ways and put the spotlight
                                                  5, for Innovation in Action in the I5 studio       on some of those new initiatives, and
                                                  inside the Palais des Festivals.                   explore how new tech is helping shape
                                                        The Airport Forum session will               positive passenger experiences in the post-
                                                  feature Heathrow Airport Retail &                  pandemic world.

                                                    The TFWA Conference is being moderated by Juliet Mann, host of The Agenda on CGTN.

 October 2022                                                              14
15   October 2022
INSIDER

 Hawaii: July visitor arrivals reach 92+% of July 2019 figures but full
 recovery not forecast until 2025
       Preliminary visitor statistics released   communities,” he expaloins.                    the U.S. East in July 2022, up by 2.3%
 by Hawaii’s Department of Business,                   “Travelers from around the world have    compared to the 243,498 visitors in July
 Economic Development and Tourism                come to know and appreciate that Hawaii        2019. U.S. East visitors spent $643.4
 (DBEDT), report that 919,154 visitors           is indeed a special place where dreams do      million in July 2022, up 26 percent
 came to the Hawaiian Islands in July 2022,      come true,” he said.                           from $510.7 million in July 2019. Daily
 representing a 92.4% recovery from July                                                        spending by U.S. East visitors in July 2022
 2019.                                           Visitor Spending and Visitor Arrivals by       ($260 per person) increased significantly in
       This is the highest monthly visitor       Major Market                                   comparison to July 2019 ($216 per person,
 count since January 2020. Visitors spent             All 919,154 visitors in July 2022         +20.1%).
 $1.94 billion in the state in July 2022, an     arrived by air service, mainly from the              There were 23,133 visitors from Japan
 increase of 14.3% compared to the $1.70         U.S. West and U.S. East. In comparison,        in July 2022 compared to 134,587 visitors
 billion reported for July 2019.                 995,210 visitors (-7.6%) arrived by air        (-82.8%) in July 2019. Visitors from Japan
       Despite the strong numbers, DBEDT         service in July 2019.                          spent $42.8 million in July 2022 compared
 does not forecast full recovery until 2025.          No out-of-state cruise ships came to      to $186.5 million (-77%) in July 2019.
       Hawaii Tourism Authority President        Hawaii in July 2022 or in July 2019.           Daily spending by Japanese visitors in July
 and CEO John De Fries, comments:                     The average length of stay by visitors    2022 ($233 per person) was flat compared
       “Meaningful economic recovery             in July 2022 was 9.36 days, up from 8.92       to July 2019 ($234 per person, -0.4%).
 continued during the peak summer month          days (+4.9%) in July 2019.                           In July 2022, 25,684 visitors arrived
 of July as Hawaii saw significant increases          The statewide average daily census        from Canada compared to 26,939 visitors
 in total visitor spending from the U.S. and     was 277,444 visitors in July 2022              (-4.7%) in July 2019. Visitors from Canada
 Canada markets compared to July 2019.           compared to 286,419 visitors (-3.1%) in        spent $57.1 million in July 2022, compared
 Travel demand from Japan is anticipated         July 2019.                                     to $50.1 million (+14%) in July 2019.
 to gradually increase as we head into the                                                      Daily spending by Canadian visitors in
 fall and winter seasons, with the recent        U.S. tourist spend higher than in 2019         July 2022 ($189 per person) increased
 resumption of air service between Tokyo-              In July 2022, 528,319 visitors arrived   compared to July 2019 ($158 per person,
 Kona and Tokyo-Honolulu adding to the           from the U.S. West, an increase of 14.2%       +19.6%).
 steady return of international flights.”        compared to 462,676 visitors in July 2019.           In July 2022, there were 92,861
       De Fries said that Hawaii’s destination   U.S. West visitors spent $973.8 million in     visitors from All Other International
 management work will continue to focus          July 2022, up 45.4% from $669.8 million        Markets, which included visitors from
 on educating visitors about traveling within    in July 2019. Daily spending by U.S. West      Oceania, Other Asia, Europe, Latin
 the islands in a manner that is mindful, “as    visitors in July 2022 ($211 per person) was    America, Guam, Philippines and the
 we seek to balance the economic vitality of     much higher compared to July 2019 ($165        Pacific Islands. In comparison, there were
 our industry with the health of our natural     per person, +27.6%).                           127,510 visitors (-27.2%) from All Other
 environment and the well-being of our                 There were 249,157 visitors from         International Markets in July 2019.

 October 2022                                                           16
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INSIDER

 IAADFS promises more flexibility and broader audience for
 2023 Summit of the Americas

       The International Association of          rooms have already been renewed by last          much more strictly confined to only duty
 Airport & Duty Free Stores opened               year’s participants.”                            free.
 registration for exhibitors at the 2023              Payne said that the Association                   “Today, travel retail has morphed into
 Summit of the Americas the first week of        has a general floor plan laid out, but has       something much broader; it is much more
 September – much earlier than last year         not laid out specific spaces yet so as to        of a mixture. We want to accommodate
 -- in the expectation that the recovery         accommodate requests.                            that,” he said.
 underway and positive momentum from
 the 2022 event, will spur interest in           Networking                                       Eliminating airport gate deliveries
 participating.                                       The Association is also deciding                  In other IAADFS activities, the
       The Summit will take place April          where to place a networking area,                Association is coordinating more with
 16-19, 2023 at the Palm Beach County            considering either in a hallway, within          other organizations to achieve certain
 Convention Center in Palm Beach, Florida.       a ballroom or in the room where they             changes. Working with Airports Council
       Michael Payne, IAADFS President           will hold the content sessions. In any           International, the IAADFS is trying to
 & CEO tells TMI that the organization           event, there will be a dedicated area for        eliminate gate deliveries of items bought at
 is looking to be flexible to accommodate        networking, Payne assured.                       the duty free store, for example.
 as many requests as possible, and will be            “We want to be a little more flexible             “We would like Customs to do some
 opening the show to a broader audience.         than normal because it will take time for        demonstration projects, which will show
        “We wanted to start the process          people to figure out what they want to do.       that we really do not need to still have that
 earlier to give people a chance to make         But we want to work with them to help            requirement in place in the U.S. Customs
 their decisions, and allow exhibitors           provide as good a return on investment as        has expressed some willingness to test this
 to get their spot. We wanted to get that        possible,” he added.                             to see that they still get what they need out
 momentum going,” said Payne.                                                                     of [secure gate deliveries] but so do our
       Opening registration earlier also gives   Fewer content sessions, more industry            members,” said Payne.
 Payne the opportunity to speak to people in     partners                                               “With the staffing and turnover
 Cannes during TFWA World Exhibition to                 In response to the feedback the           difficulties going on in the airports these
 answer questions they may have.                 Association got after last year’s event, there   days, gate delivery is just another burden
       Initial response was good, he said,       will also be a more streamlined education        that isn’t necessary.
 with 14-15 commitments for exhibition           program.                                               “The stores and airports have to
 space received in the first week.                      “Most likely we will hold only four       provide staff to provide the service, and
       Payne says that attendees will be         sessions, to allow more exhibitors and           some people do not trust the system and
 seeing a few changes from last year, when       visitors to attend,” noted Payne, who said       would rather not shop if they cannot take
 the Association tested a hybrid, abbreviated    it is partnering with organizations like         the item with them. Customs worries that
 format as the industry eased back in to live    Airports Council International (ACI) and         people will buy duty free and then pass
 events.                                         the Airport Retail & Restaurant Association      it to someone domestically, but in many
                                                 (ARRA) to put together the sessions.             international terminals there really is no
 Trade Floor returns                                                                              opportunity to do that. ACI has been very
       The 2023 Summit returns to a more         Capturing more of the travel experience          instrumental in helping us get this issue
 traditional format featuring an exhibit hall         Payne notes that the IAADFS has             initiated,” he explained.
 in combination with a limited number of         also been having conversations with                    Payne says that the IAADFS is also
 private exhibit/meeting rooms.                  ARRA about doing more projects together,         monitoring several issues, including
       “The Palm Beach Convention Center         including opening the duty free show to          making sure that the revenue allocated to
 has a substantial exhibit area on the first     more ARRA members.                               airports and operators from the CARES
 floor, which we had chosen not to use last           “We might incorporate some Food &           Act* is getting utilized properly.
 year. But we will use it in 2023 based on       Beverage exhibiters in the upstairs area.              “We are talking to the airport
 the feedback we got from exhibitors,”           There are now a number of companies              authorities to determine that those funds
 explained Payne.                                doing duty free, travel retail and food and      get to the operators they were meant for,”
       “Some people liked having the             beverage. And we think there will be others      he said.
 spaces spread around but most of the            as the industry tries to capture the whole              *The Coronavirus Aid, Relief, and
 exhibitors said they would prefer to be         customer experience,” he said. “With             Economic Security Act (CARES Act) is a $2.2
 in a more central location. So we are           ARRA’s engagement, we will probably              trillion economic stimulus bill passed by the
 working on designing a floor plan that will     have more interest among the F&B sector.”        116th U.S. Congress and signed into law by
 accommodate those who want stands. But               Payne said inviting more categories to      President Donald Trump on March 27, 2020.
 we are still going to offer the private rooms   exhibit could open the show up, especially
 that we did last year. A number of these        as opposed to 30 years ago when it was

 October 2022                                                            18
2 23

Join us in West Palm Beach, Florida, for the 2023 Summit of the
Americas, the most important event for the duty free and travel
retail industry in the Americas and Caribbean! Take advantage
        of the opportunity to meet industry colleagues for
  networking, learning, and business-to-business meetings
                    during this three-day show.

Visit www.2023summitoftheamericas.org to learn more about
 registration, room reservations, and ways to increase brand
       exposure through exhibit space and sponsorship.

April 16 – 19 I Palm Beach County Convention Center I West Palm Beach, Florida
      		                               19                              October 2022
INSIDER

 Dufry’s new strategy “Destination 2027” focuses on
 Four Pillars to enhance travelers’ experience
       Dufry presented the new company
 strategy at Capital Markets Day in London
 on Sept. 6.
       Under the name of “Destination
 2027,” the four-pillar strategy is designed
 to “make travelers happier,” says the
 company.

 Solid fundamentals but shifts in
 consumer behavior and travel patterns
       The airport travel market has proven
 to be a resilient and attractive space,
 showing a strong rebound after the COVID
 crisis, said the travel retail giant, which --
 after a steady acceleration of demand over
 the past six months -- expects passenger
 volume to resume growth in line with the         and nationalities, as well as through                Dufry reports that it will strive
 historical trajectory.                           digital channels, with extensive digital        for “superior profitability” with a logic
       While its fundamentals are solid,          engagement before and after travel, to drive    of zero-based budgeting, focused on
 the industry is experiencing a significant       consideration and loyalty.                      disproportionally allocating resources to
 shift in consumer behavior and in                     Dufry’s travel experience revolution       activities that make the most impact for the
 travel patterns, notes Dufry. “Consumer          also brings together travel retail and food     customer, while leveraging technology to
 demographics have changed, bringing              & beverage through its transformative           simplify work and operations.
 about, amongst other things, a stronger          business combination with Autogrill. This            In addition to budgeting discipline,
 demand for personalized experiences,             will allow Dufry to engage consumers            Dufry will systematically and actively
 a greater influence of online media in           with a broader set of products and a wider      manage its portfolio of concessions, with
 purchasing decisions, and stronger interest      range of experiences, which will provide “a     stronger focus on the evaluation of full
 for sustainable, healthy, ecofriendly            platform to make travelers happier during       profitability and cash flow contribution.
 products,” said the company in an official       travel,” says the company.
 statement.                                                                                       4. Connecting the other three pillars of the
       Travel patterns are also changing, it      2. Continue to Diversify its Geographical       strategy, ESG continues to be a defining
 noted, with stronger rebound of domestic         Presence to tap into fast-growing markets       ambition for Dufry and a “strong light-
 and short-haul routes, increasing share of       and hedge against regional economic             house” for its day-to-day business, which
 low-cost service, acceleration of leisure        cycles and shocks.                              the company says is “providing a source
 vs. business travel, and different mix in the         Building on a strong portfolio of          of inspiration of what to do best for our
 origin of international travelers, especially    international airport locations and global      customers, our employees, and the world
 on the path to full recovery after COVID.        brands, Dufry will continue to expand its       at large.”
                                                  footprint, with strong focus on the highly
 Four pillar strategy                             attractive and resilient U.S. market, and a           Xavier Rossinyol said: “The new
       To cater to the needs of these “new”       dedicated strategy for Asia-Pacific, building   company strategy has been crafted
 travelers, and continue to lead the Travel       a team focused on a set of strategic markets    based on a deep understanding of our
 Experience space, Dufry developed a new          in the region and on the fast-growing           stakeholders’ needs, customer insights and
 strategy, “Destination 2027,” built around       cohort of the Chinese traveler.                 the current market trends evolution.
 four pillars.                                         In Europe and Rest of the World,                 “Our new strategy ‘Destination 2027’
 1. Launch a Travel Experience Revolution         Dufry will accelerate its business              will be delivered by further empowering
 by creating – together with brand and            development process and set clear priorities    our already excellent teams and reinforcing
 landlord partners – a unique, new value          and targets.                                    them when needed. As a team, we are in a
 proposition for customers.                            The combination of travel experience       position to generate sustainable long-term
       The new value proposition is based         revolution and geographical expansion is        value for all our stake-holders, including
 on customized offerings for travelers,           expected to translate into annual turnover      employees, landlords, brand partners, and,
 including elements of experience, new            growth of 5% to 7% in 2025-2027.                finally, our shareholders.
 categories, and exclusive products.                                                                    “This is supported by the trans-
       This experience will be delivered both     3. Foster a Culture of Operations               formative business combination with
 in physical “smart” stores, with a modular       Improvement to fuel profitability,              Autogrill as an inherent part of our vision
 concept that allows it to customize the          accelerate cash-flow generation, and            to deliver a holistic travel experience and to
 offering to different passengers, routes         reinvest in growth.                             make travelers happier.”

 October 2022                                                            20
21   October 2022
INSIDER

                         DFA opened a Macallan Boutique at JFK Terminal 7 last year, one of only four in the world.

 One on One with Jerome Falic, Duty Free Americas CEO
 Diversified geographic and business models help DFA recovery
      Despite the difficulties of the past                                                            taking out others,” says Falic.
 few years, Duty Free Americas performed                                                                   DFA this month started construction
 strongly due in large part to its different                                                          on a 3,000 square foot extension to the
 trading models and the variety of the                                                                store, which will expand the retail area by
 geographic locations in which it operates.                                                           another 25%.
 According to published rankings, the                                                                      “The expansion will enable us to
 Florida-based company had sales above                                                                house many more beauty brands, most of
 US$1.6 billion in 2021. The Moodie Davitt                                                            which will be niche brands. We are going
 Report on Top Travel Retailers positions                                                             to be introducing many new fragrance
 the company as #10, an impressive                                                                    brands, which are really taking off in
 achievement among global giants and                                                                  China. And we have several brands that we
 Asian super stars.                                                                                   were able to sign exclusively.
      “Business has come back quite a bit,                                                                 “In the next few weeks we will be
 in almost every area,” confirms Jerome                      Jerome Falic, DFA CEO                    installing the newest Gucci counter with
 Falic, DFA CEO, speaking with TMI                                                                    cosmetics and fragrance. We just brought
 recently. The company operates about 200         completely. We were closed for most of the          in anther brand from Shiseido, called Ipsa.
 shops across all its locations, including in     month of July. But we have now re-opened            In October, we expect to receive the new
 some of the key airports in the U.S., along      and are doing quite well again. August was          Valentino cosmetics and fragrance counter
 major borders in North and South America,        a very good month. Business came back
                                                                                             The DFA Macau store is now 100% dedicated to beauty.
 as well as in the Chinese resort of Macau,       strong. This is all due to Chinese
 which was a bright spot through most of          traffic.”
 the pandemic.                                          The company expects this
                                                  momentum to continue. DFA’s
 DFA in Asia                                      Macau store is now 100%
        “We had a very strong 2020 and 2021       dedicated to beauty, and the
 through DFA Macau in the Venetian Hotel          company has introduced many
 in Asia. We were very fortunate,” confirms       exclusive, niche brands in this
 Falic, who said the store was closed for         store.
 just a few weeks during the height of the              “Throughout 2020, 2021 and
 pandemic.                                        as recently as this past month, we
        “But surprisingly, we have gone a         have been bringing in new brands.
 little backwards in Macau in 2022. The           We are continually fine-tuning the
 year started off strong but then dropped off     selection, bringing in some brands,

 October 2022                                                               22
Miami International Airport                                 Atlanta International Airport
                           Miami, FL USA                                               Atlanta, GA USA

The Venetian                                                The Venetian           Punta Cana Airport
      Macau                                                       Macau            Dominican Republic

                                             The Venetian                   Miami International Airport
                                                   Macau                                Miami, FL USA

THE PREMIER TRAVEL RETAILER IN THE AMERICAS
      discover more at dutyfreeamericas.com

		                                               23                                   October 2022
INSIDER

 that should be completed in December or
 January.”

 U.S. Northern Border
      DFA’s border business also delivered          Miami International
 very solid returns, says Falic.                    Airport and DFA opened
      “We have been quite fortunate here as         a joyous free-standing
 well, on our side of the border,” he says.         LEGO store in the
                                                    North Terminal this
 DFA operates more than 30 stores on the
                                                    summer.
 U.S. side of the border with Canada.
      “When the U.S. and Canada re-opened
 the border after closing for COVID, we
 have seen our business growing every day.
 I hear how difficult it is on the Canadian
 side, but our business is coming back quite     Airports
 strong.”                                             DFA is the duty free concessionaire       concessionaire. DFA has received an
                                                 at Miami International Airport (MIA),          extension on its concession contract in
 U.S. Southern Border                            Hartsfield-Jackson Atlanta International       Atlanta, as well as Miami.
       The DFA duty free stores on the           Airport (ATL) and New York JF Kennedy                “We are very happy with all of our
 Southern border never even shut down,           International Airport, Terminal 7, among       airports. Every one of our U.S. airports
 confirmed Falic, since they catered to the      others.                                        has their own dynamic and way of doing
 large number of students and essential                                                         business. We also have a lot of airports
 workers who cross over between the              Miami                                          that never get reported on, but they are
 U.S. and Mexico every day. And since                  “Miami has been fantastic for us. And    very important in our portfolio—like
 the border re-opened fully in 2021, Falic       this business is growing every day. We         Panama and Punta Cana in the Dominican
 reports that business has been much             opened a Lego store in MIA a couple of         Republic, for example.
 stronger.                                       months ago – and it has been doing great.            “We have a large presence in
       “We never closed. We stayed open          We opened a new Montblanc shop also.           Panama, and Punta Cana Airport has been
 everywhere on the Southern border and           During most of the past two years we never     a wonderful airport for us, especially
 business was pretty good. It never really       stopped. We are always building, always        throughout the pandemic. Once people
 stopped.”                                       fixing the stores. We had just remodeled       started to travel and they wanted to go to
       Following the closure of the DFA/         one of the shops before COVID, and now         a resort destination, many came to Punta
 UETA San Ysidro flagship in 2016 due to         we plan to remodel more of them. Miami         Cana. We have done, and continue to do,
 modernization and expansion of the port of      continues to grow for us,” says Falic.         some important changes in Punta Cana.”
 entry between the U.S. and Mexico, DFA                The DFA concession contract at MIA
 has obtained a new property that will house     still has several years to go, and qualifies   Challenges & Opportunities
 a multi-story, multi-use facility. Although     for extensions. As a result of the COVID              Even as Falic feels that the DFA
 the company had originally planned to have      disruptions, a ruling by the Miami-Dade        business is getting back to normal, he
 the new facility completed sometime in          Board of County Commissioners and              admits there is still a ways to go, especially
 2020, Falic tells TMI that it will probably     the Mayor added an additional four-year        as travel picks up more and more.
 still be a few years before that project will   extension to the current contract, which             “I see a lot of growth opportunities
 go forward.                                     will have it run through 2029.                 ahead. And we are constantly making
                                                                                                changes within our shops, always
 Latin America                                   New York JFK Terminal 7                        upgrading, looking for new opportunities
       DFA has had a long-time presence                 “Terminal 7 continues to do quite       and new brands to bring in to the shops,
 operating major stores on the Uruguayan         well,” says Falic. “We have the Macallan       new offerings.”
 border and was in the process of opening        Boutique there, one of only four in the              Looking at short-term challenges,
 new locations on the Brazilian border when      world. We are always looking to see where      Falic, like many other airport operators,
 COVID sidetracked the progress.                 we can add something different to our          says that staffing continues to be an issue.
       Falic confirmed that the new store        shops, and we have something very special            “We use job fairs wherever we
 DFA had planned to open on the Brazilian        for Terminal 7 coming up, which we can         possibly can. Wages have become very
 border in Foz do Iguaçu is taking longer        discuss at a later date.”                      competitive and it is much more costly to
 than expected, although several of its stores          As part of JFK’s modernization plans,   run the business,” he says.
 on the Uruguay side of the border are open      Terminal 7 is scheduled to be demolished             Operators are also experiencing
 and had stayed open during much of 2020.        as other terminals are expanded. “This is      supply side issues and product shortages.
 It also operates a store in the Iquique Free    still about three years away, though,” notes         “We could be selling even more, and
 Zone in Chile.                                  Falic.                                         recover even faster, if we had higher fill
       “We are very strong on the Uruguay                                                       rates. As much as business is back, this is
 side of the border but opening stores on the    Atlanta, Panama, Punta Cana                    where we feel we could be much stronger,
 Brazil side is a much slower process,” he           Atlanta is another major U.S. airport      if our purchase orders were fulfilled
 says.                                           where DFA is the exclusive duty free           100%.”

 October 2022                                                           24
INSIDER

 Left: Civil Rights Trail Market by Hudson At Birmingham-Shuttlesworth International Airport. Right: The Atrium At Colorado Springs

Hudson expands U.S. airport footprint with new retail concession at Colorado
Springs Airport and expansion in Birmingham
     Hudson has won a new 7-year contract               The new stores will boast                          One of the key new retail concepts
at Colorado Springs Airport (COS) and             “Instagrammable” backdrops for travelers,          is The Civil Rights Trail Market, which
announced a 7-year contract extension at          with storefronts that feature vibrant              along with other new locally curated
Alabama’s Birmingham-Shuttlesworth                wrap-around designs and eye-catching               stores, “truly celebrate the culture of this
International Airport (BHM).                      imagery that recreates some of the most            legendary city, while driving excellence in
                                                  recognizable sites – like Pike’s Peak – in         the traveler experience,” said Brian Quinn,
COS: brand accessibility & local                  photogenic, shareable moments.                     EVP and Deputy CEO of Hudson.
partnerships                                            Hudson will also introduce local                    The Civil Rights Trail Market by
      COS serves more than two million            brands through a rotating incubator                Hudson is a first-of-its-kind concept travel
travelers a year, and is a gateway to historic    program. In partnership with Colorado              convenience store that pays homage to
sites, and a popular adventure and sports         Springs entrepreneur Linda Weise and               the historic civil rights movement and
scene.                                            the Community Cultural Collective, local           the U.S. Civil Rights Trail. Through a
      Under the new contract, Hudson              artists, businesses, and craftspeople will         partnership with Lee Sentell, Author of ,
will introduce three stores– two travel           have dedicated spaces to display their             the storefront dons an official timeline
convenience and one specialty retail. Each        work and showcase their neighborly love,           and powerful imagery of the national and
store will be individually crafted with           with the offering continually evolving and         local civil rights movements. Copies of the
unique design elements and offer locally          expanding.                                         book are available for purchase as well as
sourced products to create a sense of place                                                          Civil Rights Trail branded merchandise
perfect for the Colorado Springs lifestyle        BHM: reimagined portfolio inspired by              honoring Birmingham’s leading role in the
and experience.                                   Alabama                                            movement and presence along the Trail.
       Hudson will begin operating at COS               As part of the 7-year contract                     The other locally-themed concepts
on September 1, 2022, with construction           extension, Hudson has transformed four             are Magic City Market by Hudson, Sweet
for the three new stores starting in 2023.        of its existing retail spaces in BHM into          Home Alabama by Hudson and Alabama
The new stores will operate under the HG          locally-themed stores and introduced a             Sports Connection, a specialty retail
COS Concessionaires JV with local Airport         new specialty brand Automated Retail unit.         concept offers sports memorabilia and
Concessions Disadvantage Business                 With a footprint of more than 5,000 square         apparel, with a large selection of branded
Enterprise (ACDBE) Partner Uyen Le,               feet, these new concepts honor Alabama’s           merchandise from universities in the
owner of two Beauty Bars in Colorado              culture and important place in American            surrounding area, including Miles College,
Springs.                                          history while creating a brand experience          Samford University, and UAB: The
                                                  uniquely positioned for the airport and its        University of Alabama at Birmingham.
Concepts designed specifically For COS            more than 2.5 million annual travelers.                  In addition, Automated Retail is a
     The three stores – one pre-security                Hudson has been operating at BHM             24/7 specialty retail brand destination
and two post-security – will span more            for 19 years, a tenure that includes a long-       specifically tailored to the local market.
than 4,700 square feet of concessions             standing partnership with local Airport            Automated Retail at BHM features
space, and be anchored by Hudson –                Concessions Disadvantaged Business                 accessories from Happy Socks, and furry
Colorful Colorado, a locally-themed               Enterprise (ACDBE) Partner Irmatean                friends wearing University of Alabama
travel convenience concept equipped with          Watson, Inc.                                       apparel in an Automated Teddy Machine
self-checkout and mobile POS; Hudson                    The new stores are located throughout        from Build-A-Bear Workshop.
Nonstop; and specialty retail concept The         Concourses A and C, and the Automated
Atrium At Colorado Springs, featuring a           Retail unit is affixed to Hudson’s other
collection of local, regional, national, and      travel convenience store, Hudson Vulcan.
global brands.                                    Several stores offer self-checkout registers.

           		                                                            25                                                           October 2022
INSIDER

 Denver International Airport’s 2.6 million square foot Jeppesen Terminal features an internationally recognized peaked roof, reflective of the snow-capped
 Rocky Mountains, and designed to evoke the early history of Colorado when Native American teepees were located across the Great Plains.

 One on One with CPI Managing Director Susan Gray
 How global consultancy CPI is helping Denver International Airport
 create a benchmark Concessions Program Master Plan
 There is an unprecedented wave of airport infrastructure and terminal investments underway in the U.S. – a phenomenon that
 began prior to the pandemic outbreak, but which should accelerate since the U.S. Department of Transportation’s Federal Aviation
 Administration (FAA) announced it is awarding nearly $1 billion from President Biden’s Bipartisan Infrastructure Law funding to 85
 airports across the country to improve terminals of all sizes.
      Denver International Airport (DEN) is in the forefront of preparing for the future. Passenger traffic is returning at an incredible rate,
 and DEN is now ranked as the third-busiest airport in the United States and one of the top ten busiest airports in the world according to
 Airport Council International’s data for 2021. In recognition of its new concessions program, DEN has even been shortlisted for Airport
 of the Year at the Frontier Awards.
      TMI speaks at length with Susan Gray, managing director of the key consultancy – Concession Planning International --that is
 helping DEN develop and implement a Master Plan for its concessions that is designed to be a benchmark for decades to come. Lois
 Pasternak reports.

       Last fall, Denver International Airport                                                            workshop the commercial and customer
 CEO Phil Washington announced Vision                                                                     experience opportunity that existed at the
 100, a plan to ensure that the airport will                                                              airport.
 have the capacity and infrastructure to                                                                        “The DEN project has been a huge
 support 100 million annual passengers                                                                    and ambitious undertaking on the part
 within the next eight to 10 years. This                                                                  of the Denver International Airport
 strategic plan will guide the airport’s                                                                  management team,” CPI Managing
 work over the next three to five years, and                                                              Director Susan Gray tells Travel Markets
 was formulated after months of intensive                                                                 Insider.
 research, including the consideration of                                                                       “These initial engagements have
 community, employee and stakeholder                                                                      developed into the most exciting,
 feedback and suggestions, said the airport.         Susan Gray, Concession Planning International        professionally respectful working
       Most of the planning related to the           Managing Director                                    relationship, and the creation of what
 concessions program was done in close                                                                    we believe to be one of the most
 coordination with Australia-based specialist        continents.                                          comprehensive, considered, and ambitious
 airport commercial planning consultancy                  DEN began working on its Master                 strategic concessions programs we have
 Concession Planning International (CPI),            Plan long before the announcement of                 worked on in the last decade,” she added.
 which has advised on world-class programs           Vision 100, however. The Airport Authority                 Since that 2017 workshop, CPI
 for more than 100 airports across six               originally engaged CPI back in 2017 to               was engaged to develop and support

 October 2022                                                                  26
INSIDER

                                                                            The Great Hall project is currently working on Phase 1 and Phase
                                                                            2 concurrently. Phase 1 work is in the center of the terminal where
                                                                            crews are constructing new ticketing areas for United and Southwest,
                                                                            widening the balconies on Level 6, adding four new restrooms and
                                                                            adding 31,000 square feet to Jeppesen Terminal.

                                                                            Phase 2 work broke ground this summer on the north end of the
                                                                            terminal. The primary focus of Phase 2 is to enhance security by
                                                                            building a new security checkpoint on Level 6 in the northwest corner
                                                                            of Jeppesen Terminal. All Phase 2 work will be done by mid-2024.
                                                                            However, the new checkpoint is scheduled to open by early-2024.

                                                                            Left: Newly renovated portion of the Jeppesen Terminal, completed by
                                                                            DEN in Fall 2021.

implementation of an airport-wide              Expansion Program will build 39 new              where possible to do so, including the new
commercial Master Plan and strategy and        gates, increasing gate capacity at the airport   expansions;
plan for the three main concourses at Denver   by 30%. The first four new gates opened on       • Revisited the category mix and identified
Airport, each one handling circa 20m+          the west side of Concourse B in November         the appropriate split of retail, travel
passengers. Currently handling around 65       2020 and 16 new gates opened on the east         convenience and F&B in the future;
million passengers annually, DEN is forecast   side of Concourse C in May 2022.                 • Rearticulated the airports’ vision for
to reach 110 million before 2040.                   Work continues in the two remaining         the concessions program, ensuring that it
      DEN is centered around the Elrey         expansion areas across all three concourses.     attracts the very best operators with the
B. Jeppesen Terminal—which acts as a           All expansion areas are expected to be           most appropriate brands and concepts for
processor. This is the airport’s iconic main   operational in 2022.                             its passenger mix by concourse and reflect
building with roof sails that mimic the             Critically, the project includes around     the very best that Colorado and Denver has
snow-capped Rocky Mountains beyond.            10,000 sq ft of additional concessions space     to offer;
Jeppesen Terminal celebrated its 25th          programmed for the concourse expansions          • Very importantly - ensured that the
anniversary in 2020.                           alone, notes Gray.                               program would provide great opportunities
      This processor supports three large           She says that the concessions Master        for local operators and brands to do
linear concourses which are linked by an       Plan that CPI and DEN have developed             business at the airport.
underground train as well as a pedestrian      does the following:
bridge from the main terminal to concourse     • Maximizes the concessions space in the               “The new spaces in the concourse
A.                                             ‘center cores’ of each concourse;                expansions are incredible spaces. We
      DEN has been expanding the               • Identifies and maximizes the concessions       are immensely proud of them,” says
concourses, adding gate capacity as fast       opportunities throughout each concourse          Gray. “There is a marked contrast
as it can reasonably do so. The Gate           at concourse level and mezzanine level           between the old infrastructure and the
                                                                                                new infrastructure. While this is a little
                                                                                                frustrating, it’s a very tangible expression
                                                                                                of DEN’s ambition; they promised a better
                                                                                                experience, and they’re making it happen.”
                                                                                                     CPI did not design the new spaces in
                                                                                                isolation, Gray explains further.
                                                                                                     “We spent a lot of time making
                                                                                                sure the seating strategy will support
                                                                                                the concessions delivery. By identifying
                                                                                                the amount and type of seating needed
                                                                                                in each area of the airport, with an
                                                                                                emphasis on providing what we term
                                                                                                ‘F&B-friendly’ seating, we can ensure
                                                                                                the F&B concessions can maximize their
                                                                                                opportunity.
                                                                                                     “In a very busy, capacity constrained
                                                                                                airport, passengers get the best service, as
                                                                                                they can be served fast and consume their
                                                                                                purchase in their preferred location whether

           		                                                       27                                                           October 2022
INSIDER

 that be nearby or in a remote gate lounge,”     still existed with some concession spaces,       to passenger flow, seating, bathrooms, and
 she says.                                       she admits. Despite the large scale of           other services and amenities.”
      When the new CEO Phil Washington           the expansions, DEN is still very space
 arrived last year, he re-stated the intent to   constrained when all the functional,             Top engagement key to success
 enhance the customer experience as part of      operational and customer service                       With a primary focus of optimizing
 the airport’s new Vision 100 strategic plan.    requirements were factored in. As a result,      the commercial potential of the main three
      “The concessions Master Plan               some of the new concessions had to have          concourses at DEN, while delivering
 supports this by providing better quality       more support space at apron level and less       an outstanding and distinctive customer
 environments, greater choice and                at concourse level. CPI tried to give these      experience, CPI worked primarily with
 essentially as much concessions capacity        locations as much additional space as            DEN’s concessions team. But they were
 as possible as we plan to meet the growing      possible, says Gray.                             also engaged with the executive leadership
 demands of DEN’s traffic,’’ she says.                  “The new spaces at concourse level        team throughout.
                                                 are of super quality; strategically placed to          “I cannot stress enough how important
 Balancing challenges and compromise             provide choice to passengers in a superb,        the commitment of the airport’s leadership
      As airport commercial planners, CPI        high quality environment with good service       has been to the success of this program,”
 is used to compromise, stressed Gray.           provisions. There is not a single new unit       says Gray. “It would have been very
      “Unlike other environments, we             that is in a poor location. As planning          easy to stick with what they knew. But
 understand and accept that our customers        consultants we identify and advise airports      they recognized that they had a massive
 are primarily in the airport to fly             on how much concessions space they need          opportunity to not just improve the
 somewhere, not buy. It’s our job to balance     and where it should be located to deliver        concessions and customer experience but
 that with the airport’s need to generate non-   maximum revenues. When compromises               create a program that is a benchmark in
 aero revenue, and our collective desire to      are necessary – and they always are, in          North American airports. And they are
 deliver a great experience to everyone who      airports – we would always rather take           doing it.”
 travels through our infrastructure.”            reduced square feet if it means the space              CPI was also plugged in directly to
      Even with the expansion, challenges        we do have is in the best location relative      the airport’s planning and design team and
                                                                                                  their own project teams.
                                                                                                        “Too many airports work in
                                                                                                  departmental silos; the DEN team
 Award-Winning Mercantile Dining & Provision at DEN                                               provided the opportunity for CPI and the
 introduces “next level” offer                                                                    concessions team to engage directly with
                                                                                                  the architects and engineers designing the
                                                                                                  new expansions and we were able to have
                                                                                                  important and very respectful discussions
                                                                                                  that have had incredible results for DEN
                                                                                                  and their airline partners.”
                                                                                                        Gray says that CPI has also been
                                                                                                  working intensively with the DEN team
                                                                                                  to make sure all the existing concessions
                                                                                                  spaces can be re-leased in a timely manner.
                                                                                                        “The COVID pandemic slowed our
                                                                                                  plans, but the concessions team is now
                                                                                                  really confident it has a robust program
                                                                                                  and will be getting those opportunities in-
                                                                                                  market as soon as possible,” she concluded.
                                                                                                  “From our perspective as a global
                                                                                                  commercial consulting firm, we’ve found
                                                                                                  that the airports who had the ability – or
                                                                                                  perhaps it was the courage – to stay their
      In August, Denver Mayor Michael            concept of the same name in Union Square,        course during the recent COVID pandemic
 B Hancock opened the new Mercantile             the unit is ‘next level’ in terms of the fit-    are the ones who are recovering faster.
 Dining & Provision concept at the center        out, the menu offering, the choice it offers     Airports such as DEN had the courage
 core of Concourse A.                            – bar, sit-down dining and take-away – and       of their convictions; Penny May, Chief
      With Mercantile Market, James Beard        customer service, says Gray.                     Commercial Officer and SVP Concessions
 Award-winning chef Alex Seidel brings                 “In line with some of the concessions      Pamela Dechant, with the new CEO Phil
 a wide-ranging grab-and-go section and          Master Plan’s key principles, the unit opens     Washington, were integral to the City of
 cafe, endless counter seating and quiet         up the views to the airfield, letting in loads   Denver’s decision to carry on with the
 dining areas in 4,500 square feet and an        of natural light and views to the planes and     major concourse development programs.
 open kitchen design that features a 15 seat     mountains beyond. It’s a step-change – and       This means the airport is so well positioned
 Chef’s Counter overlooking Mercantile           it’s a statement of intent from the DEN          to leverage the return of passengers
 chefs preparing each dish to order.             team. This is just the beginning!” she says.     in record numbers and give them an
      An adaption from a downtown                                                                 experience they can be proud of.’’

 October 2022                                                            28
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