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BREATH OF FRESH AIR

HMSHOST IS INVIGORATING AIRPORT CONCESSIONS WITH HOT NEW CONCEPTS

By Rodger Brown

Some might say it was one of those problems that are nice to have, this December debate at a meeting of the Hillsborough County Aviation Authority. The members were trying to decide how to proceed with a $14 million remodeling of Tampa International Airport's concessions spaces.

The point at issue: The authority did like the cachet of the dozen marquee brands lined up for new spaces — Fossil, Harley-Davidson, Tommy Bahama, to name a few — but however upscale, perhaps they were also too generic.

“I think we're making a big mistake having all the retail be 'Anywhere U.S.A.,' ” Pam Iorio, mayor of Tampa, Fla., told the members, according to published reports. “You want people to step into a shop and say this city I'm about to visit has a personality to it.”

Enter Bethesda, Md.-based HMSHost, an airport concessions operator whose history in the travel dining and shopping business dates back about 100 years. HMSHost suggested it could team up with a retro-chic brand that would boldly declare to deplaning passengers that they were definitely in the Sunshine State.

“For all our clients we search out in our product mix things that are indicative of an area or local brands unique to that area,” said Joan Ryzner, senior vice president of retail at HMSHost. “So for Tampa we suggested Ron Jon Surf Shop.” Indeed, here was a brand founded and made famous in Cocoa Beach, Fla., and that had recently experienced a rejuvenation of its own.

HMSHost's local-twist proposal earned the company a five-year extension on its contract to operate the concessions at the Tampa airport until 2015.

Any traveler who has ever grabbed a half-caf, no-foam latte while racing to catch a flight has done business with HMSHost, which has the exclusive contract to run all airport Starbucks units. The same goes for anyone grabbing a newspaper at News Connection, or the latest thriller at Simply Books, two of the proprietary brands HMSHost has developed to serve travelers. HMSHost runs retail and food-and-beverage concessions programs at some 100 airports worldwide, nearly three-fourths of them in North America, including 19 of the 20 busiest in the U.S.

With regard to its experience in the travel sector, the pedigree of the $2.3 billion company is unimpeachable. Founded in 1897, in Kansas City, Mo., as the Van Noy Railroad News Co., the company sold newspapers, snacks and tobacco at railroad junctions. It eventually moved into the hotel business and ran train station restaurants and bus station lunchrooms until securing its first airport concession at the San Francisco International Airport in 1954. It became Host Marriott Services when Marriott acquired it in 1982, then adopted the HMSHost moniker after its 1999 acquisition by Italian travel dining giant Autogrill.

HMSHost's longevity is one of its major selling points, as is its research on passenger flow and consumer behavior in airports. “We pride ourselves on our knowledge, our database and the services we use to collect this data,” Ryzner said. “It's what makes Host the world leader. We know how to get it right because we really understand zone analysis.” The term refers to an analysis of the ways travelers disburse down a concourse and move throughout an airport.

Such research is more important now than ever, Ryzner says, because of increasing demands by airports for greater return on their retail and restaurant space, as well as the rapidly evolving physical layout of the contemporary airport. “Just 15 years ago the space in airports was very disconnected, very chopped up,” Ryzner said. “Now its very contiguous space, so it is a lot easier to create neighborhoods of brands pulled together, which is what you would do in a mall environment or a mall tenant plan.”

Airports are placing more emphasis on concessions as a source of revenue, says Brett McAllister, the senior vice president and CFO of the Airports Council International-North America. “From an airport operator perspective, any time they have to do a renovation or redevelopment or new terminal design, they are actually considering the food-and-beverage and retail space at the very forefront,” McAllister said.

The trend dates back to 1992, McAllister says, when BAA USA built the first Airmall, a stretch of airport real estate dedicated to shopping and dining, at Pittsburgh International Airport. Even with the disruptions that followed the terrorist attacks of Sept. 11, 2001, the increase in retail development barely slowed. “It just so happens that when airports had to make capital improvements for security, they also saw an opportunity to build out retail,” McAllister said. “Why not do both at the same time? That is definitely a trend we've seen.”

But with virtually all the major airports today racing to build space for food sellers and stores, what is there to differentiate one airport shopping experience from another? These airports face the same conundrum Tampa International did. And they are all solving the puzzle the same way. “Localization is critical to an airport,” Ryzner said. “Every airport wants to have its own identity.”

As a direct operator of airport concessions rather than a developer that just recruits brands, HMSHost boasts hands-on expertise in working with local and regional businesses to adapt brands to the airport environment. “You create a local sense of place in two ways,” said Ryzner. “First, you can get that through the way you do your store build-out, through graphic presentation or local use of materials.”

Ryzner points to Miami International's festive, tropical decor; to Dallas-Fort Worth's “contemporary urban Western”; and to a new project the company is working on at Minneapolis-St. Paul International called Northstar Crossing, in which some stores sport faux birch trees on their facades and a lodgelike ambiance that conjures Minnesota's outdoorsy, Land of 10,000 Lakes reputation. “With a 3-D moose coming out of a window, you know you're in Minnesota,” she said. “You know you're not in Los Angeles.”

The concessions mix can be another localization tool, Ryzner says. Memorabilia and souvenir shops like the Minnesota Store, in Minneapolis, can be effective, and so can food brands grown from local origins. At Chicago's O'Hare International, HMSHost helped develop and launch BJ's Market & Bakery, a restaurant with roots on Chicago's South Side.

If a desirable brand finds itself unprepared to develop its own store, HMSHost will do it for them. That was the case with NASCAR's very first airport-based store, which opened in January at the Charlotte (N.C.) Douglass International Airport. “This is a circumstance where we wanted the brand, and they didn't want the distraction to their business, so we went in and showed them how we could bring their brand to life in an airport environment,” Ryzner said.

NASCAR attributes its confidence in undertaking the project to HMSHost's proven abilities in the field. “They are the category leaders in this space, and we leaned heavily on their expertise,” said Blake Davison, NASCAR's managing director of licensed products. “HMSHost took the lead on developing and designing the concept. We brought the NASCAR experience and expertise to the table and worked closely with them to develop a concept that accurately reflected the passion and imagery of the sport.”

HMSHost is equally satisfied. “The NASCAR store is now one of our crown jewels,” Ryzner said. “It's truly retail entertainment at its best.”