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State to open bids The state is expected to pick one company tomorrow to run retail shops, kiosks and carts throughout Honolulu Airport, a business that generates about $40 million in annual sales.
for airport concessions
A contract that may be worth up
to $40 million in annual sales
will be awarded tomorrowBy Russ Lynch
Star-BulletinBids will be opened at 2 p.m. in an airport conference room. Assuming that the highest bidder can prove it is qualified, a five-year contract will be awarded, to start March 15 and run through March 14, 2006.
Previously, different concession operations have been broken up into separate contracts. This time, it will be one contract for 37 retail outlets in four categories -- packaged foods; gifts, apparel and luggage; sundries and toys; and jewelry and shells. The successful bidder also will get a choice of one of two warehouse spaces at the airport, of between 5,000 and 6,000 square feet.
Confidentiality rules prohibit state airports officials from saying whether more than one potential bidder has submitted pre-bid qualification documents.
In recent years, the separate businesses have mostly been run by one company, DFS Group LLP, doing business as DFS Hawaii.
DFS was the sole bidder for the much bigger duty-free concession for all of the state's airports earlier this month. The company bid $60 million a year for that contract, which will also allow it to take orders for duty-free goods at off-airport sites such as its recently rebuilt Galleria in Waikiki.
DFS is expected to bid for the non-duty-free business as well but company officials refused to comment on the bid.
The qualifications may make it hard for others to enter the contest. The winning bidder must be prepared to pay the state at least $8.75 million a year or 20 percent of the concession's total sales, whichever is higher. To enter a bid, a business must show that it has at least 10 years of retail experience and that for five of the past 10 years it has conducted "a major retail operation with annual sales for such operation in excess of $20 million."
The winner will have to post a bond of at least half of its first-year minimum guarantee, be prepared to invest at least $2.5 million to improve the spaces it uses at the airport, and be prepared to shift some of its locations as the state Department of Transportation works on improving the airport.
Concessions such as the retail and duty-free operations join with landing fees and other airport-user charges to cover the cost of maintaining and operating the state's airport system.
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