Safer the airport, less busy its shops

Security: It's everywhere at airports these days, and those who sell to travelers say business is way down.

January 20, 2002|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

When lines start backing up at security checkpoints at Baltimore-Washington International Airport, retailers along the main concourse of shops and eateries know not to expect a rush.

"People get anxious when they see long lines, and they don't want to stop and shop," said Judy Bolly, an assistant manager for Columbia-based Regional Retail Concepts, which runs seven stores at the airport called Celebrate Maryland, Just Plane Kids and Discover D.C. "People don't want to get out of line."

It's been that way at BWI and at airports across the country since security was tightened and airlines eliminated thousands of flights in the wake of the Sept. 11 terrorist attacks.

"It's slow, and it hasn't picked up," said Renee Dunaway, a systems manager for Wilsons Leather store at BWI, as she polished the bags and briefcases that few passengers are buying these days.

Although airport retailers have begun to recover from drops in sales that ranged from 20 percent to 60 percent after Sept. 11, many are finding the landscape irrevocably altered.

Business, dependent on growing numbers of passengers through terminals, has been hurt by traffic declines, experts said. The number of boardings, or emplanements, dropped 19.5 percent nationwide in November, while the number of passenger miles fell 17.7 percent, according to the latest figures from the Air Transport Association. BWI has fared better than many other airports, with a 10.4 percent drop in November, preceded by a 6.4 percent drop in October.

And those who continue traveling are spending less "dwell" time before a flight because of lengthier check-in waits and security checks.

"Retailers have been hit by a double whammy since Sept. 11," said Ivo Favotto, the Sydney, Australia-based director of consulting firm Andersen's airport services practice. "If the number of passengers is down, then more or less so will be retail revenue."

That means retailers with a seemingly captive customer base can no longer count on a steady - much less growing - flow of travelers.

"This has never happened to the industry before," said Dick Dickson, president of The Paradies Shops, which runs about 300 airport newsstands and shops, some under brand names such as Brooks Brothers and PGA. "We've never had this loss of emplanements. We've never had security measures so difficult ... all coupled with the fact that the economy is not in good shape. This is like a home run for bad stuff."

What's more, passengers are not likely to be as focused on shopping. They may be more concerned with just getting through security on time or unsure of whether they can take an extra bag on board.

What Favotto describes as passengers' anxiety over processing has become one of the biggest impediments for airports and airport retailers, he said.

"A relaxed customer that has finished all their processing ... will generally spend more than one that hasn't finished these procedures," he said. "The time people might previously have spent shopping is now spent in queuing."

Hurting most are the "landside" retailers, those located before security checkpoints, as opposed to "airside" retailers, those near flight gates where passengers have time to kill while waiting to board.

Restaurants, food and beverage stalls and newsstands have generally fared better than specialty shops, said Marjorie Brink, a principal consultant at airport consulting firm Leigh Fisher Associates in San Mateo, Calif.

"People are going to eat, regardless," Brink said. Newsstands, too, have done well, "because of lower price points. And one thing people will continue to do is read."

Stephanie Dignan, who was flying from BWI back home to Fort Lauderdale, Fla., on a recent Tuesday, was intent on buying just the right University of Maryland T-shirt while browsing at the Celebrate Maryland store. But she was shopping only because she had voluntarily given up her seat and had three hours to kill.

"Normally I'm getting here and having to wait [in lines] and I don't have time," said the financial adviser, who travels frequently for her job.

`A material impact'

At HMSHost Inc., a Bethesda-based unit of Italy's Autogrill SpA that has retail and food operations in more than 70 airports worldwide, declining passenger numbers have had "a material impact on our business," said David Milobsky, a company spokesman. At BWI the company operates or leases 38 food outlets - such as Starbuck's, Wild Goose Microbrewery and Burger King - and 22 shops, such as the Museum Co. and Sunglass Hut.

HMS, which reported $1.6 billion in sales in 2000, would not disclose the percentage drop in business since Sept. 11, but said sales have dropped as much as plane boardings at some airports - typically those with a lot of connecting flights.

"Sales are still down significantly," Milobsky said.

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