As U.S. airlines have cut back their fleets and flights, airports across the country have taken a hit to their bottom lines. Those empty gates mean much less revenue, and they have to make up the money from somewhere.
Enter airport shopping, which falls under the category of “concessions.”
According to a new report on the world’s airports, concessions are the leading form of non-aviation revenue. The Airports Council International (ACI) looked at 650 airports, representing 70 percent of the world’s passenger traffic, in its “2014 Airports Economics Report.
Here are some key findings:
- Concessions account for 27 percent of the money that airports earn outside of aviation services.
- Parking is next at 20 percent.
- Rent paid by airport tenants is third, at 18 percent.
Here’s a snapshot of how things look for Denver International Airport, which is celebrating its 20th anniversary this year.
It generated more than $322.8 million in gross concessions revenue in 2014, up 9.5 percent from the $294.8 million generated by the program in 2013.
If you’ve ever been to DIA, you know that concessions are a big deal. The airport offers travelers access to 140 shops, restaurants and services covering more than 177,000 square feet of space.
This emphasis helped Denver boost a key statistic, called revenue per enplaned passenger. It averaged $12.07 in 2014, up 7.58 percent from $11.22 per enplanement in 2013. The 20014 number was an all-time high for the airport.
The airport credits its Retail Merchandising Unit (RMU) and kiosk program for the boost. This gives small businesses the chance to sell at Denver International without a big capital investment.
In 2014, that program generated about $16.4 million in gross revenue, the highest amount since the RMU program began in 2011.
As concession leases continue to expire at Denver International, the airport expects to transform about 75 percent of its shops, restaurants and other amenities over the next few years.
In 2014, it opened 21 new or updated concession locations as part of its transformation, with 42 new or updated concessions opening in the past two years.
Next time you’re looking for a story idea, call or visit your local airport. If you see a new shop, there’s probably a reason.