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138 Resource Manual for Airport In-Terminal Concessions
12
10
8
Years
6
4
2
0
Advertising Duty Free Food & News/Gift Services Specialty
Beverage Retail
Large Hub Medium Hub Small Hub Non-Hub
Source: LeighFisher using data from the airport surveys conducted for ACRP Project 01-11.
Figure 9-1. Typical term lengths in concession agreements.
is generated in a potential concession opportunity, a longer term may be needed for the con-
cession opportunity to be viable.
• The contracting approach. Term lengths of concession agreements in the Direct Leasing and
Prime Concessionaire approach are similar. The term lengths of Third-Party Developer agree-
ments are longer because of the additional front-end hard (construction) and soft (marketing,
leasing, and management) costs inherent in Developer agreements.
• Airport development plans. New concession locations or anticipated closures of existing
locations for terminal redevelopment may justify longer terms to maintain continuity during
periods of change, to offer additional periods of time to compensate for additional investment,
or to offset sales decreases.
• Concession concept types. Customarily, the term lengths for convenience retail agreements
are longer than the term lengths for specialty retail agreements because of the narrower mar-
gins in newsstand merchandise. Food and beverage agreement terms are longer than retail
agreement terms because of the additional equipment required and higher buildout costs.
60%
50%
Percent of reporting airports
40%
30%
20%
10%
0%
1 Year 2 Years 3 Years 4 Years 5 Years Other
Advertising D uty Free Food & Beverage
News/Gift S ervices Specialty Retail
Source: LeighFisher using data from the airport surveys conducted for ACRP Project 01-11.
Figure 9-2. Typical term extension option periods in concession agreements.
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154 Resource Manual for Airport In-Terminal Concessions
Cost of constructing
improvements
Design review processes
Lack of transparency in
solicitation process
Length of term
Mid-term refurbishment
requirements
Minimum annual guarantees
Percentage rents
Performance standards in
concession agreements
RFP processes
Concessionaires
Airport operators
Street pricing
1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
No Importance High Importance
Source: LeighFisher using data from the airport surveys conducted for ACRP Project 01-11.
Figure 9-7. Airport concession industry business practices in need
of improvement.
include, among other types, in-terminal concession agreements. An accompanying CD-ROM
provides sample agreements. The CD-ROM included as part of ACRP Report 33 is also avail-
able for download from the Transportation Research Board’s website as an ISO image. The
report and sample agreements may be downloaded at http://www.trb.org/Publications/Blurbs/
Guidebook_for_Developing_and_Managing_Airport_Cont_164803.aspx.
