USA. Interested parties will have from early October until December to prepare proposals for up to 11 retail and ten food & beverage concession at San Francisco International Airport Terminal 2 – the former international terminal currently being converted to domestic use.
The concessions will be awarded in February 2010. The design phase will conclude by the northern summer of 2010, with construction to conclude ahead of the scheduled terminal opening in early 2011.
 |
“Retail has been hit a bit harder but the decline is still only in single digits, so overall it’s a good story“ |
Cheryl Nashir Associate Deputy Airport Director, Revenue Development and Management San Francisco International Airport |
“Awarding leases fully one year before opening ensures concessionaires have time to develop concepts to the maximum,” commented Associate Deputy Airport Director, Revenue Development and Management Cheryl Nashir.
Concession space will total 32,000sq ft (approximately 3,000sq m). Most retail will be situated in an airside shopping street that all passengers will traverse on their way to gate lounges, with food & beverage concentrated in a marketplace.
There is a requirement for a bakery and a coffee offering, and an expectation of technology and travel goods stores, but SFO is seeking creative proposals for most locations. “We don’t want to be prescriptive – there are several retail locations that we’re labelling just speciality at this stage so that we don’t restrict proposals,” Nashir told The Moodie Report.
“There’s been a lot of interest and optimism among both incumbents and new players, particularly for food & beverage, and we’re hoping for some new tenants.”
Concessions will follow existing structures for payment – either a base or percentage rental, depending on which is higher, with terms of seven years for retail contracts and 12 for F&B.
Terminal 2 is forecast to handle 3.2 million passengers in its first year of business. Led by Virgin America and American Airlines, carriers will operate services across the US from the new facility, with Los Angeles, Dallas, Las Vegas, New York JFK, Chicago and San Diego the major destinations.
In an innovative move SFO will require food & beverage tenants to agree to a 16-point sustainable food policy inspired by the Slow Food movement. Vendors must follow guidelines on portion sizes, sourcing of hormone-free meat and cage-free eggs, and source organic, regional produce wherever possible.
“This is in line with the airport’s sustainability policy and responds to consumer demand for healthier foods,” explained Jane Sullivan, Manager, Marketing & Communications.
In the year to 30 July SFO recorded flat domestic passenger numbers (16.3 million, the same as for the previous corresponding period). The performance, creditable given the US recession, has been driven by fare competition between Southwest Airlines, Virgin America and JetBlue, along with consolidation of flights to SFO from other regional airports.
 |
Click here to view the enlarged image (then hover over graphs with your cursor and click for full detail) |
By contrast, international passenger numbers were down -10.4% to 4.8 million as a result of softer demand across all markets, a reduction in business travel, and seasonal capacity reductions by carriers.
Commercial revenues have held up well on a per passenger basis, however. Cheryl Nashir commented that food & beverage revenues have maintained a plateau around the US$6.60 per passenger level. “Retail has been hit a bit harder but the decline is still only in single digits, so overall it’s a good story,” she said.
In other concession news:
• Construction will start in October on new Terminal 3 retail kiosks for See’s Candies and environmental gift outlet Destination Green, due to be open by Christmas 2009. The Boarding Area F kiosks are of approximately 150sq ft (14sq m) each.
• New T3 speciality locations for the Hudson Group (ties and scarves, jewellery and beauty outlets) and Sunglass Hut will also be operational by Christmas. The specialty retail area totals approximately 350sq ft (33sq m).
• Harmony Pharmacy & Health Center, one of the first airport pharmacies in the US, has notched monthly sales of over US$100,000 since opening on 12 May. “We’ve just launched the pharmacy component this week so we’re looking at even greater upside,” said Nashir.
• SFO is engaged in the selection process for two leases covering nine ATM machines across domestic terminals 1 and 3. The proposed minimum acceptable bid amount is US$90,000 (equal to the minimum annual guarantee for the first year of the lease), for a proposed term of five years with an optional two-year extension.
• Also under way is selection for a lease agreement for pay-phones across the airport. With a term of four years and an option to extend by two years, the agreement requires a minimum annual guarantee of 27% of gross revenues.
• SFO has issued an RFP for a new term of the shoeshine concession at the International Terminal, with the stated aim of updating the existing service.
• Los Angeles-based Unique Retreats has secured the contract to install ten sleeping units post-security in boarding area A of the International Terminal. Equipped with single beds, HDTVs, soundproofing and office facilities, the 886sq ft (82sq m) sleeping pod facility aims to deliver on what Sullivan calls “our vision of making the airport a more comfortable place to dwell”.
• Information and documents on SFO’s concession may be obtained online at http://www.flysfo.com/web/page/about/b2b/conces/. For a hard copy of the document or if you would like additional information about this concession opportunity, call Sharon Perez, Principal Property Manager, Revenue Development and Management, at +1 650 821-4500.
 |
 |  |
Harmony Pharmacy & Health Center has notched monthly sales of over US$100,000 since opening on 12 May | |
MORE STORIES ON SAN FRANCISCO INTERNATIONAL AIRPORT
Hudson Group wins multi-store retail concession at San Francisco International Airport – 19/05/09
