Resource Manual for Airport In-Terminal Concessions (2011) / Chapter Skim
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13 Managing the Concession Program
13 Managing the Concession Program
Pages 200-215
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From page 200... ...
. This chapter discusses the following topics in concession program management: • Staffing requirements and qualifications • Lease management systems • Understanding the concession agreement • Importance of comprehensive concession agreement files • Interaction with concessionaires • Marketing the concession program • Organizing the concession staff • Performance monitoring • Reconcepting existing units • Transition planning • Airports with well-managed concession programs 13.1 Staffing Requirements and Qualifications The number and experience of concession management staff are the primary determinants of the effectiveness of concession management.
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From page 201... ...
Inherent in the airport concession management staff 's duties is the ability to read, interpret, and enforce contract requirements. This is a critical component of successful concession program management.
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From page 202... ...
Concessionaires should also know their obligations under the concession agreement. The airport concession managers should meet with each of the concessionaire managers before the commencement of any new agreement and whenever new managers are assigned to discuss the provisions of the agreement so that both parties have a clear understanding of what is expected and required.
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From page 203... ...
Periodic meetings between the airport concession manager and the concession operators to discuss performance and upcoming events that may affect concession operations, to pose and answer questions, and to address other topics of interest that arise are recommended. During periods when the concessionaire's business is getting established and during periods when major changes are occurring, more frequent meetings should take place.
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From page 204... ...
All of the airport concession managers in our survey who perceived themselves to be effective in managing and improving the performance of their concession programs believed that regular communications with concession tenants was a key contributor to their effectiveness. Monthly or bimonthly meetings with tenants were cited as a particularly effective forum for communicating information and discussing issues and concerns.
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From page 205... ...
The Port of Portland brands the landside concession area at Portland International Airport as the "Oregon Market." The developer of the concession programs uses its "AIRMALL" brand at Baltimore/ Washington International Thurgood Marshall, Boston Logan International, Cleveland Hopkins International, and Pittsburgh International Airports. The branding of retail programs at major airports outside the United States is common.
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From page 206... ...
13.7 Organizing the Concession Staff The number of concession management staff may vary from as few as two individuals with responsibilities in addition to their responsibilities for the concession program at small hub airports to numerous individuals that deal only with concessions, but in separate units with different 206 Resource Manual for Airport In-Terminal Concessions Figure 13-4. Example of a distinctive shopping bag advertising the concession program (Amsterdam Airport Schiphol)
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From page 207... ...
13.7.1 Reporting Relationships of Concession Managers According to the survey conducted for this research project, the individual with primary fulltime responsibility for the concession program at large hub airports is most likely to report to the airport operator's commercial director or an overall deputy director (67%)
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From page 208... ...
At a minimum, the concession manager's duties include the following: • Understanding the underlying terms and conditions of the concession agreements to be monitored • Assessing risk to determine where monitoring time is best spent • Developing and documenting a monitoring plan • Interacting regularly with concessionaire managers • Developing an understanding of each category of concession operation • Conducting compliance reviews • Providing constructive feedback to concessionaire management, as needed • Responding to concessionaire questions and requests and advising concessionaires of upcoming events that may affect their business • Acting as an advocate for the concessionaire when needed • Following up on customer complaints • Reviewing and evaluating concessionaire performance • Briefing senior management on concessionaire activities • Taking corrective action to address noncompliance when necessary Quality control practices (discussed in Chapter 3) are an important part of concession performance monitoring.
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From page 209... ...
83% 61% 56% 72% 82% 18% 47% 71% 27% 55% 73% 73% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Formal staff inspection program Mystery shopping services Customer comment cards Passenger/customer surveys that include evaluation of current program Large Hubs Medium Hubs Small Hubs Figure 13-6. Quality control practices and frequency of use in managing the concession program.
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From page 210... ...
in concession agreements as a disincentive to committing the violations noted above. These penalty clauses provide for escalation of the amounts to be paid to the airport operator for recurrence of the same violation, and do not preclude other rights and remedies addressed in the concession agreement, such as a declaration of default.
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From page 211... ...
Another sample set of steps in progressive enforcement of concession agreements is the following: • Identify the potential violation. • Read and review pertinent provision(s)
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From page 212... ...
Airport concession managers should be empowered to make First Notice and Imposition of Penalty progressive enforcement determination decisions and should have quick access to legal counsel and airport policy-makers, if assistance in making such decisions is needed. Great care should be taken to avoid implementing enforcement actions prematurely or incorrectly, as this can create embarrassment and make future enforcement actions more difficult.
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From page 213... ...
For these reasons, a reconcepting request predicated on a term extension should be considered carefully and only after careful and documented business analysis. The approval should take into account the effect of the decision on other tenants and on the concession program overall, but most of all, it should be based on a clear benefit to the airport enterprise.
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From page 214... ...
13.11 Airports with Well-Managed Concession Programs There is considerable value in networking with peers regarding airport concession programs to determine what has and has not worked well. Fortunately, airport operators tend to be coop214 Resource Manual for Airport In-Terminal Concessions
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From page 215... ...
: • Large Hubs – Dallas/Fort Worth International Airport – Las Vegas McCarran International Airport – Los Angeles International Airport – Minneapolis-St. Paul International Airport – Phoenix Sky Harbor International Airport – Salt Lake City International Airport – San Francisco International Airport – Tampa International Airport – Toronto Pearson International Airport – Vancouver International Airport • Medium Hubs – Austin Bergstrom International Airport – Calgary International Airport – John F
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