Abu Dhabi Airport’s passenger facilities spur overseas peers

As Abu Dhabi International Airport’s upcoming Midfield Terminal prepares to accept the brands it has chosen for its 11,300 square metres of dining space in the building, other airports overseas are moving fast to upgrade their passenger facilities.
The operator Abu Dhabi Airports did not disclose to The National which brands will be in the terminal, but said the concessionaire contracts went to the Emirates Group subsidiary Emirates Leisure Retail (ELR), the airport and motorway dining specialist HMSHost International, the duty free retailer Lagardère Capital and the British caterer SSP.
Seeking to boost the key measure of retail sales per passenger, airports are expanding and refurbishing shopping areas and ensuring routes to gates steer customers past – or through – as many stores and restaurants as possible.
London’s Stansted has just completed an £80 million (Dh425.3m) makeover that increased space in the departure lounge by 60 per cent, providing more room for shops.
“Airports now are basically shopping malls with runways,” said John Jarrell, the head of Airport IT at Amadeus, which supplies technology systems to the industry.
But the lucrative business has been hit by falling numbers of Asian travellers, traditionally the biggest spenders. Major European airlines have reported falling demand from passengers from China and Japan this year as a result of the attacks in Paris and Brussels.
“Air travellers have become very discerning price-wise and impulse buying at the airport is becoming rarer,” said the ACI Europe spokesman Robert O’Meara.
Frankfurt airport is trialling a scheme where passengers in the Lufthansa lounge can shop on their tablets and have goods brought to them, and another where passengers can order food from tablet-toting staff to be brought to the gate and eaten there or on their plane.
Many European airports, including Copenhagen, Gatwick, Stansted and London Heathrow, also now offer “collect on return” services that allow customers to buy goods and pick them up when they return from their trip.
Heathrow, Europe’s busiest airport, offers passengers not flying via Terminal 5 the chance to order items from the Chanel store there – a service much used by high-net worth customers flying to the Middle East from Terminal 4.
His airport completed a £40m revamp of its luxury shopping area last year that added more shops, including Louis Vuitton and Bottega Veneta.
France’s Nice Côte d’Azur Airport announced in October it was undertaking its largest-ever commercial renovation – one that it hopes will achieve its vision to create the “most surprising commercial experience in a European airport”, Filip Soete, the chief commercial officer, said at the time
“By 2017, both terminals will have been entirely renovated to provide double the retail areas and double the waiting areas,” Mr Soete said.
“We began with the idea two and a half years ago to revamp our two terminals, and are investing €4m [Dh188.8m],” Mr Soete said. “Our vision is to deliver the most surprising commercial experience in a European airport, with a real sense of place and local brands to create that surprising effect. We want to be a little bit different and that was a goal throughout the tender process.”
While the concept of duty-free was invented in Shannon, Ireland in 1947, it has since lost meaning for European travellers, which do not get the tax-free prices that passengers from outside the European Union enjoy.
Thanks to the satellite building, work to expand Terminal 2 capacity is already fairly well advanced. By contrast, the next big construction project in the passenger segment, the refurbishment of Terminal 1, is still at the planning phase. The refurbishment will significantly increase the appeal of Terminal 1, the airport said, creating enhanced capacity and expanding the functionality of the terminal.
The Frankfurt airport operator Fraport illustrated the importance of Asian travellers when it said that passengers from China, Russia, South Korea, Japan and Vietnam made up just 7 per cent of passengers in 2015, but 31 per cent of retail revenue.
Faced with such hurdles, airports are trying to maximise the time available to customers to shop by reducing times spent queuing at security checks and giving people better directions via apps or touch-screens to find their way around often sprawling terminal buildings.
Fraport’s app, for example, allows passengers to take a picture of a sign at Frankfurt airport and have it translated into Chinese.
European airports relied on non-aeronautical revenue – sales earned from retail and car parking – for 40 per cent of their revenues in 2013, the most recent year for which data is available, according to ACI Europe.
Of that revenue, retail – including food and drinks sales – accounted for 46 per cent, up from just 28 percent in 2008. That equates to about 18 per cent of airports’ total revenue.
The British hub increased its retail revenue by 9 per cent in 2015, about a fifth of its total annual revenues, representing per passenger retail revenue of £7.58, up from £7.14 the previous year.
Across the Atlantic, Los Angeles airport has gone one further. In November authorities there approved opening a special terminal for the rich and famous to wait for their flights, far from the paparazzi and riffraff.
Back in Abu Dhabi, the people behind the Midfield Terminal were all too aware of the importance of giving passengers a memorable experience when deciding on which firms to include.
“The winning concessionaires were those that had demonstrated their ability to deliver on the vision behind it all – providing spectacular ideas that will translate into sensational experiences, exceeding the expectations of our business partners and customers alike.”
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