Airport retailers hope returning passengers are ready to shop
(This is a slightly different version of a story we wrote for NBC News)
Airline passenger traffic is still running far below pre-pandemic numbers. But U.S. airlines and airports are getting ready for what promises to be a busy, near-normal summer.
Vaccinated travelers will be flying to more places – perhaps even Europe. And more people in airport terminals means more customers for airport shops and restaurants still reeling from pandemic traumas.
“During the pandemic, many restaurants and stores had to be closed, while others were drastically scaled back to minimal hours,” says Rob Wigington, executive director of Airport Restaurant and Retail Association. With the return of travelers, many airport concessions are reopening. But ARRA projects these businesses will show a loss of at least $3.4 billion between summer 2020 and the end of 2021.
When they do return to airports, passengers will notice changes in retail operations ranging from shops permanently or temporarily shuttered to stores with reduced hours and limited stock.
At Denver International Airport, which reports seeing a major return to traffic, “Our retail program is doing very well, and concessions are fully open,” says airport spokeswoman Alex Renteria, although many shops are currently operating with reduced hours.
While many local brands are maintaining their presence at Oregon’s Portland International Airport (PDX), the airport lost iconic, long-time local tenants Powell’s Books and Real Mother Goose art and craft gallery during the pandemic. Now “concessionaires continue to adjust their operating hours so that they are open with the majority of the outbound flights,” says airport spokeswoman Kama Simonds.
After all but shutting down all concessions in the first phase of the pandemic, Philadelphia International Airport came up with a strategic plan for how and when to reopen its 185 retail, food, and beverage outlets. 40% of those concessions are local and minority-owned businesses, says PHL chief revenue office Jim Tyrell, “And if we closed them, they’d have a harder time coming back.” So, as travel demand began to pick up, PHL focused on opening those businesses first.
Today 85 of the airport’s 185 concessions are open. Although many are operating with reduced hours due to worker shortages (a national challenge) and limited airline schedules. “But we have not lost a single operator since the pandemic started,” says Tyrell.
Another upside, “We’re noticing that at PHL travelers who are shopping are buying high ticket, luxury items, including jewelry, high end handbags, sunglasses, and wallets. Things we wouldn’t expect pandemic passenger to buy,” says Tyrell. “It’s like you have people who have decided to travel and now they are all in. We hope that trend continues.”
A big challenge for Duty-Free Shops
At Los Angeles International Airport (LAX) no local retail shops have permanently closed, says airport spokesman Heath Montgomery. The schedule of international flights is still down, so only one duty-free shop, the main one in the Tom Bradley International Terminal (TBIT) is open. There, “sales are mirroring the slow rebound of international passengers. And the tasting area is still temporarily closed,” says Montgomery.
While 3Sixty Duty Free recently celebrated the grand reopening and expansion of its retail store in Terminal 4 at Fort Lauderdale-Hollywood International Airport (FLL) and announced plans to open additional outlets, “In general it has been a very difficult time for duty-free operators,” says Michael Payne President and CEO of the International Association of Airport Duty Free Stores, with sales down by as much as 80%.
In the few U.S. airports where duty free shops are open, there is uncertainty for travelers. “They’re flying for the first time in a year. They are in a rush to get to the gate. And they are more careful when shopping. Some things that they would touch, feel, taste, or try on, such as clothing, spirits, and cosmetics, they cannot do. And that changes the buying practice,” says Payne. Business travelers, a traditionally good source of revenue for duty free, are not flying yet either. “But I think things will eventually settle down and should get back to something normal.”
Bob Wigington of the Airport Restaurant and Retail Association agrees, “The industry will be in recovery mode for a long time, but with the continued help of our airport partners, and resumption of business and international travel, we will get to the other side of this unprecedented crisis”