Atlanta airport seeks businesses for new terminal
The Atlanta Journal-Constitution
Hartsfield-Jackson International Airport soon will seek concessionaires to help the city put on its best face for globetrotting travelers.
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The Atlanta airport will issue nine or more requests for proposals, probably in early September, for service providers at the $1.4 billion international terminal under construction. Concessions will range from restaurants, currency exchange and banking to duty free and other shops.
Atlanta City Council member H. Lamar Willis said that while the terminal's design was scaled back from more fanciful plans for budget reasons, nothing stops the airport from offering the best in retail and restaurants.
"International travelers are used to a certain type of experience," said Willis. "If they don't get it, they might not spend their money."
Airport officials recently told the council's transportation committee they will host an "industry day" in May to explain the concessions program to potential bidders.
The airport also will seek new contracts for some concessions on Concourse E, which now handles overseas flights. Those contracts are set to expire in 2012, just as the new Maynard H. Jackson Jr. International Terminal is scheduled to open.
The airport's concessions program director, John Cugasi, departed last week for a job in Los Angeles with Caruso Affiliated, a company that wants to launch an airport concessions division. Caruso said in an e-mail it does not have plans to bid on Atlanta concessions this year.
Cugasi helped transform 90 Hartsfield-Jackson storefronts into shops with more local branding, such as the Piedmont Park TravelMart, or internationally known names like Salvatore Ferragamo. Cugasi was hired in 2005 from HMSHost, a major airport concessionaire, to make over the airport's aging retail shops. His mission was to give the Atlanta airport a stronger sense of place. Willis believes Cugasi succeeded at that.
"Unfortunately, he's gone," said Willis. "I hope the vision is still going to be there." Cugasi could not be reached for comment.
An airport official said Cugasi's departure won't delay the bidding process for the new concessions.
"We are on schedule," said Arnaldo Ruiz, assistant general manager-commercial development in an e-mail. "Although we will miss John Cugasi’s leadership, we have extremely competent personnel in the business unit to move the process forward without delay."
Ruiz will take Cugasi’s place until a new concessions director is named.
Concessions are projected to be the top revenue category at Hartsfield-Jackson this year, generating $109 million for the airport, just ahead of parking. On average, travelers dropped $7.55 at Hartsfield-Jackson per stop-over in 2008. According to Airport Revenue News' most recent list of revenue per boarding passenger at the top 50 airports, that put Hartsfield-Jackson in 44th place. Pittsburgh, which also recently upgraded its retail mix, was first with $13.68 spent per boarding passenger. Since that ranking, Hartsfield-Jackson's number has risen to $8.90, according to an airport spokeswoman.
The new retail shops rang up $1.1 million more in rents for the airport in the first half of fiscal 2010 than the previous shops. Brighton Collectibles alone did $1.5 million in annual sales while Lacoste did more than $1 million, airport officials told the city council.
While it can be more expensive to operate at an airport due to security screenings of both staff and merchandise, airport concessions have a rapt audience and tend to do a high sales volume. Average sales per square foot at the airport is $2,215, the airport said, compared to $700 per square foot for a leading Atlanta mall.
Ray Uttenhove, executive vice president and managing principal of real estate services firm SRS Real Estate Partners in Atlanta, said $700 per square foot is about what Lenox Square mall does.
"Anything above $600 to $700 is considered pretty dynamic," she said, calling Hartsfield-Jackson's numbers "very good."
While behind Chicago's O'Hare International Airport, which has $2,384 in sales per square foot, Hartsfield-Jackson's sales per square foot exceed Detroit Metro Airport ($1,342), Denver International Airport ($1,295) and Dallas/Fort Worth International Airport ($1,154), the airport said.
Staff writer Kelly Yamanouchi contributed to this report.
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