Research Projects

Tackling the Economics of Concessions

The Concessions industry has evolved greatly over the past decade. The volume of ACDBE's, Concessionaires, and lines of business have grown significantly. Each Airport has developed programs differently. Understanding the economics of the Concessionaires (living wages, pricing models, operational costs, etc.) as well as Airports (pouring rights, leasing structures, CRDC's, etc.) is critical to Commercial Management.

In addition, technology will play a more critical role in future years. What is the cost benefit and how does that factor into decision making?

Background (Describe the current situation or problem in the industry, and how your idea would address it.)

The true economics remain a mystery at times for Concessionaires and Airports. Post COVID 18 operational costs will climb. How will this further change in a post COVID 19 world?

Objective (What is the desired product or result that will help the airport industry?)

An objective look at the cost pressures of a "deal" and the various models used by airports.

Approach (Describe in general terms the steps you think are needed to achieve the objective.)

A study of the variety of economics across the country along with other factors such as trends towards local flavors, increased ACDBE participation and other considerations.

Cost Estimate and Backup (Provide a cost estimate and support for how you arrived at the estimate.)

$250,000 based on previous studies I have been involved in with ACRP and the Airport.

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Idea No. 510