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BWI visitors might shop mall-style in the airport

THE BALTIMORE SUN

PITTSBURGH - The staples of suburban mall shopping are present: GAP, Brooks Brothers and T.G.I Fridays. Then, there's an actual Staples office supply store.

But something is different here. The aisles between the 100 or so shops are strangely wide. Most of the bags people carry have wheels. And the shoppers come and go by airplane.

It's the Pittsburgh International Airport Airmall - the nation's first mall-style airport concession and a highly profitable retailing success that the managers of Baltimore-Washington International Airport hope to imitate.

The state Board of Public Works is expected to vote within a few weeks on whether to award the lucrative contract to manage BWI's retail concessions to BAA USA Inc., which built the Pittsburgh mall.

The Maryland agency that runs the airport recommended the company in place of HMSHost Corp. of Bethesda, which has run concessions at BWI for 30 years.

The officials hope the change will elevate BWI from its rank of 37th among U.S. airports in concession revenue per passenger, according to a study of 2002 sales by Airport Revenue News, a monthly trade publication.

Pittsburgh, by contrast, boasted the highest sales per passenger in the past year among American airports at $10.29, or about $9.30 if services such as foreign currency exchange and advertising are not included.

Travelers landing in Pittsburgh probably can't help noticing the storefronts inside the airport. The windows are filled with GAP's colorful sweaters, Nine West's spring line of shoes and Clinique's makeup. Signs remind passengers to stop for a Godiva chocolate and that Pennsylvania does not tax clothes. Skylights brighten the common areas.

"I usually take my lunch breaks and shop," said Rhiannon Whalen, an employee at Bath & Body Works, with a GAP bag on her shoulder, who arrived early for work to spend money before she made some. "People tell me every day what a great airport it is."

"Street" pricing at Pittsburgh's Airmall means that prices are comparable with those at area shopping malls - and are not inflated "airport prices."

"I wandered around, and the Italian [sandwich] looked good," said Byron R. Frank, a local Westinghouse engineer on his way to Stockholm, Sweden. "I knew what to expect here because I've been here many times. I know the other airports I've been to have fewer choices."

Ping Mei Law, on her way back to Ontario after visiting a friend in Pittsburgh, said she got to the airport early and had some time to spend shopping. She had her sights on a "3 for $10" soap deal at Bath & Body Works.

"We don't have this shop at home, so I always stop in here," she said. "There's really nothing here I can't buy on the outside, but they always say to come two hours early for international flights. I guess that benefits the merchants."

BAA estimates it could raise concession revenue at BWI to $7.36 per passenger in the next few years, up from about $5.50 in 2003.

The company also estimates that revenue to BWI could reach an average of $11 million a year, or $131 million during the 12-year contract, up from about $7.2 million last year - after the completion of more than $1 billion of infrastructure improvements in progress at the airport, including expansion of retail space to 120,000 square feet from 60,000 square feet.

Still, not all lawmakers and government officials are convinced that the airport is getting the best possible deal. The narrow focus of the airport's bid proposal brought only two bids, so a legislative hearing is scheduled for today about the process prior to the final vote on the contract.

Travel experts say many U.S. airports need to make changes to keep pace with passenger demands.

As long-term concession contracts expire, more are turning to so-called developer models, in which a company leases out space like a shopping mall operator. Few airports, however, have chosen to turn over all airport concessions to just one company as Pittsburgh has done.

"[BAA] is a European model, and Europeans seem to be doing a better job, so I can see why BWI would reach out to them," said William R. Graves, a professor in the School of Aeronautics at Florida Institute of Technology. "The public has changed its demands since Sept. 11 because they are spending more time in airports. Concessions used to be an afterthought, but now everyone is looking for a model they can reach out to."

BAA - the American subsidiary of the British company that owns and operates seven airports in England and their concessions - has already begun discussions with several local and national chains, some present in Pittsburgh, to move into BWI.

They include national chains such as Borders booksellers, Johnson & Murphy men's shoes, Cheesecake Factory, Godiva Chocolatier and Swatch watches.

"Pittsburgh has the first GAP to go in an airport, and BWI should have something like that," said Mark Knight, a regional director for BAA.

Local companies being sought by BAA for BWI include Obrycki's Crab House & Seafood Restaurant, Green Turtle restaurant and bar, Thrashers french fries, Jos. A. Bank's men's clothing and Chick & Ruth's Delly. About 30 percent are expected to be owned by women or minorities.

BAA, which opened its Pittsburgh mall in 1992, also runs concessions at Indianapolis International Airport and at three concourses at Boston Logan International Airport.

Last Saturday in Pittsburgh, shoppers came in waves as planes landed at the airport, a hub for US Airways. The airline's struggles, with passengers down 26 percent in the past year, have cut into traffic at Pittsburgh. With the number of travelers through Pittsburgh down about 20 percent to 14.3 million last year compared with 2002, mall sales are also down about 15 percent, BAA said.

BWI has recovered more strongly since the terrorist attacks of 2001. That's largely because of the growth of Southwest Airlines, now responsible for more than 40 percent of BWI travelers. About 19.7 million passengers used BWI in 2003, up 3.6 percent from 2002.

But BWI's current shop offerings have left many travelers feeling as though they didn't have much choice. Lines often grow long at the Starbucks coffee shops, one of the few brand names available at BWI.

Still, upgrading amenities at BWI won't be as simple as adopting the Pittsburgh model. Unlike Pittsburgh, BWI is not a hub airport where people have built-in layovers. Also, the terminal setup at BWI does not allow for one central mall like the one in Pittsburgh.

Instead, BAA will build a smaller mall-like area in the Southwest terminal that's scheduled to open next year. Other retail outlets will be spread out behind several security gates, meaning there will likely need to be more duplication of restaurants and shops.

HMSHost, the longtime concession operator at BWI, contends it could generate more revenue than in the past and improve shopping given the same expansion and improvements that BAA is using for its calculations. The company points to awards it has won serving other airports with its "prime" model, in which it operates all concessions itself and employs all workers.

BWI said the move was not about what Host could not do, but what developers like BAA could do.

"This has been a very deliberate process that has literally been going on for years," said Jonathan Dean, an airport spokesman.

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