INTERNATIONAL. The latest edition of The Airport Retail Study*, published by URS Australia, finds that 92% of the surveyed airports continue to use minimum guarantees of some form in their concession agreements.
The Airport Retail Study, now in its third edition, is a respected source of retail performance analysis. Using a series of performance indicators, the study benchmarks the retail performance of 39 major international airports and airport groups in Europe, North America, Africa, the Middle East, South America and Asia Pacific. For the first time this year it also examines the role of concession and rental structures as one of the “˜management indicators’.
The authors said: “The vast majority of airports (92%) reported utilizing minimum guarantees in their concession agreements, although a small number (8%) did report having moved away from the use of minimum guarantees.”
They continued: “Given the “˜Trinity Forum’ debates that have been raging in the industry about concession structures, it is interesting to note that less than half – 48% – of participating airports used absolute (fixed amount) minimum guarantees.”
The study said that 26% of participants used per passenger-based minimum guarantees with another 26% employing some other form of minimum guarantee, usually a combination of fixed amounts and per passenger payment. It concluded that North American airports were the most likely to use absolute, fixed guarantees with European airports moving towards passenger-linked agreements and Asia Pacific’s opting for a mix of approaches.
The study also examined rental structures, looking at four key models used within most concession agreements:
– per square metre rents
– fixed percentage rents
– stepped percentage rents
– a combination of the above
The most favoured structure was the fixed percentage rent, used exclusively by 40% of airports.
In a fascinating section of the report, the Airport Retail Study also examines trends in concession duration, lease structures (master concession v outlet by outlet v combination approach) – and much else besides.
Minimum Guarantee Models used by Leading Airports |
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| Note: Based on sample of 39 major international airports and airport groups in Europe, North America, Africa, the Middle East, South America and Asia Pacific. Source: Airport Retail Study |
The study’s definition of retail includes duty free, specialty retail, food & beverage and foreign exchange. This is consistent with previous editions.
The airports in the study collectively account annually for over 650 million passenger movements, generate nearly US$7.4 billion in retail sales and manage nearly 500,000sq m of retail floor space.
*The Moodie Report is delighted to offer readers a -10% discount on the standard A$2000 price (US$1,425) for the latest edition. Simply download our special “˜Readers’ offer’ form from our “˜Features’ section at www.TheMoodieReport.com
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