Nation's airport concession stands go from no name to brand name

December 31, 1990|By Tom Belden | Tom Belden,Knight-Ridder

PHILADELPHIA -- One of the most welcome trends in recent years for travelers on the nation's toll roads is beginning to show up in major airports: the replacement of restaurants and snack bars serving bland, often expensive, generic food with nationally known fast-food outlets.

The leader of the movement is Host International, a division of Marriott Corp. that operates 102 travel plazas on 16 toll roads nationwide and 750 food, beverage and merchandise shops in 52 U.S. and foreign airports.

Host is serving up food by Burger King, Bob's Big Boy and Mrs. Field's Cookies, among others, at highway plazas in 13 states. Currently, nationally franchised brands are being added at all the plazas on the Pennsylvania Turnpike and the New York State Thruway.

For air travelers who can't stomach another nameless hamburger on a soggy bun, Host is providing a glimpse into the future with the variety of restaurants and shops it opened in November at Phoenix Sky Harbor Airport's new Terminal 4.

The Phoenix terminal has 32 food and beverage "units," including a Burger King, five Pizza Huts, two Vie de France Cafes, two Swensen's Ice Cream Shops, a TCBY yogurt store and stand, and two Nathan's Famous Hot Dogs stands. In addition, the terminal's generic restaurants, also operated by Host or by local entrepreneurs, place a heavy emphasis on Arizona regional specialties, including Mexican and Southwestern cuisine.

Host also is carrying the use of nationally known brand names in airports beyond food service. It has a branch of the upscale retailer Bloomingdale's at Kennedy International Airport in New York. In the Detroit and Minneapolis airports, Host will open early next year lounges named Cheers and designed to resemble the bar in the popular television series.

JTC Host is not the only airport concessionaire operating franchises with brand name food and merchandise. Dobb's House, a division of Greyhound Dial, operates Sbarro's Pizza restaurants in several airports.

The change to branded food, beverages and other merchandise is moving into an industry that for years has imposed inflated prices on a captive market. Host and other concessionaires say airport restaurant prices are usually 10 percent to 50 percent higher than those of outside competitors because of the high rent charged by airport operators.

"I think the industry . . . has been a dinosaur that moved very, very slowly," said Robert Dorfman, Host's executive vice president and general manager. "It's probably looked upon its customers as captives. It's done things on a self-serving basis . . . I don't think the business was very customer-driven."

Concessionaires such as Host are moving toward brand names for some very obvious business reasons.

In recent years, the company began listening more to customers, who perceive a better "price-value relationship" at nationally franchised restaurants, Dorfman said. That means customers are more willing to spend money where they believe they are getting their money's worth.

Host found that sales at airport and highway travel plazas went up 200 to 300 percent when nationally recognized brands were substituted for generic products. That more than makes up for franchising fees and marketing costs that franchisers usually assess each unit, Dorfman said.

One Burger King at Detroit Metropolitan Airport, for instance, does close to $3 million a year in business -- or almost twice the volume of the generic snack bar it replaced -- and it uses only 25 percent as much space.

On the down side of the movement, the higher volume does not necessarily mean that food will be getting a lot cheaper at airport brand name restaurants than at generic ones. Dorfman said Host tried to keep airport prices no more than 10 percent to 20 percent above those in a mall or other outside restaurant.

In some airports, Host has proposed reducing its food prices in exchange for rent reductions from airport authorities. But that could present an airport operator with having to offset that decrease with increases for other airport users, such as airlines, Dorfman said.

Another important aspect to successfully changing the food and merchandise at airports or highway plazas is to make it appropriate to the city or region, Dorfman added.

"It's real important we respond to the demographics going through an airport," he said. "In Orlando, it's more fast food because of the number of families. In San Francisco, it's more high-quality restaurants. When you're going through the airport in Honolulu, we want to make sure you feel like you're in Hawaii and not in Cleveland."

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