Isle airports Airports across the country have seen revenues decline in the wake of the Sept. 11 terrorist attacks, the Iraq war and now the SARS disease worry.
share in pain
The facilities are hurting across
the country, but Honolulu depends
more on foreign travelersBy Russ Lynch
rlynch@starbulletin.comBut unlike Hawaii, they don't rely on international duty-free business for the biggest share of their funding.
Generally, airports have waived minimum-rent provisions in exchange for a percentage of the gross revenues of the shops and restaurants in their terminals, something that Hawaii's airport concession holders have been seeking.
"It's a trend at all airports. The whole industry is hurting post-9/11," said Tony Ciavolella, a spokesman for the Port Authority of New York and New Jersey, which runs La Guardia and JFK in New York and Newark Liberty International in New Jersey.
The airports are structured differently than in Hawaii, he said. At Newark, for example, Continental Airlines paid for its Terminal C and handles all the concessions itself, paying a lease for the ground.
It has won awards for its design and the quality of its concessions.
Business is down now, just as it is in most places, Ciavolella said. However, the various airports in the two states operate in different ways with some terminals financed and operated by the airlines.
That lessens the effect of a travel downturn, he said.
Airports generally say that business is down, but there is a slight advantage for some concession holders in that travelers have to check in so early because of new security restrictions that they spend more time in a terminal and that means more time to grab a meal or a drink or buy some gifts.
Hawaii concessions say they have been hurt by the fact that most of the restaurants and flower and gift shops are inside the newly defined security areas and not accessible to visitors to the airport, such as those seeing off family or friends.
Peter Fithian, a veteran of 40-plus years operating concessions at Honolulu Airport and president of Greeters of Hawaii, said that factor has definitely cut into the business at his flower shops in Honolulu Airport's main terminal.
But the drop in local business at most airports across the country is small, said Pauline Armbrust, Florida-based publisher of Airport Revenue News and other airport concession trade publications.
"Typically the meeters and greeters account for a a very small percentage of sales," she said. Most of the major concessionaires are not really concerned about being in the secured areas where only ticketed travelers can shop, she said.
Any airport that has a high level of international travel, such as Honolulu, is being hurt right now, Armbrust said.
"But nobody could predict 9/11" and no one could have expected a situation where the world's biggest airlines are in financial trouble, she said.
One of the problems in Hawaii is that the duty-free business and the other concessions at the airport have become a "mature business," said Greeters of Hawaii's Fithian. "Nobody else is really going into it," he said, so the airports are pretty much stuck with what they have.
Nationally, a few years ago there was a wave of retail development at airports, turning many terminals into shopping malls, and those are all feeling the pinch now, experts say.
Mike McCarron, a spokesman for San Francisco International Airport, said his airport worked out an arrangement with its concession holders that is similar to the deal the state of Hawaii will be working on with DFS Group.
There has been a decrease in foot traffic, both before the security check points and beyond and the concessions in the secured area have seen about a 15 percent decline in business, he said.
"But people are getting there earlier" because of the security procedures that they expect and that gives them more time to shop and dine, McCarron said.
"There are fewer people but they are staying longer at those places," he said. McCarron said his airport has temporarily replaced minimum annual concession-rent guarantees with a formula that has concessions paying a percentage of their revenues with no minimum.
The formula sets a level at which the minimum annual guarantees will kick in again, he said, but the revenue numbers have not yet reached that point.
He said one of the concessions agreeing to that deal is duty-free operator DFS Group, which also has the duty-free concession for Hawaii's airports.
State Department of Transportation