Committee Identifies Three Threats to Industry

The Commercial Management Committee serves as a forum for members to share ideas and exchange information among airport concessionaires, consultants and commercial properties professionals as well as to identify the best commercial practices at airports. The committee focuses on concession and commercial property management issues and develops an annual work plan that includes projects that will address key industry issues.

Recently, the Commercial Management Committee members identified four threats and challenges that were included in ACI-NA’s Winter Board Report. The short-term threats and challenges include:

  1. Increase generation of airport non-aeronautical revenue.
  2. Understand ways in which technology can be implemented with or by concessionaires to assist in improved customer service to increase revenue generation.
  3. Without access to capital, concessions will have difficulty committing to construction or will require much longer term to recover the higher cost of capital, which has an impact on airport lease terms.

The committee identified one long-term threat; with more attention than ever before on concessionaire selection processes. There is a need for the future process to be standardized, streamlined, tightened, and transparent to the airport community.  To address this particular threat the Steering Group proposed to formulate the Concessions Contracting and Business Practices Working Group. The new working group’s objective will be to identify industry standards and best practices for contracting and procurement approaches, and concession agreements.  Working group members will strive to find similarities and make comparisons between various approaches and figure out ways to increase transparency throughout the whole process. The committee will promote the working group research and findings, through conference presentations and webinars.

There will be three educational sessions during the 2011 ACI-NA Airport Economics & Human Capital Conferencerelated to commercial management. The sessions include commercial land development, increase net revenue from public parking, and innovative income generation ideas. In addition, there will be a Commercial Management Committee meeting to provide updates on all committee projects and initiatives and discuss industry issues.

Contact ACI-NA’s Aneil Patelfor more information.