Concessions Master Plan Update
Working Draft for Discussion Purposes
January 25, 2016
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
Topics for Presentation
• Current Program Review
• Comparative Airport Benchmarking
• Space Requirements
• Space Development
• Next Steps
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
1
Current Program Review: Sales per Enplanement
DEN has achieved strong growth
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
2012
2013
Food & Beverage
2014
Retail
Services
Jan-Jun '15
CPI
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
2
Comparative Airport Benchmarking
DEN total sales equal average of comp airports
2014 Total Sales per Enplanement
$18.00
Sales per Enplanement
$16.00
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
DTW
SLC MDW CLT
ATL
PHX DFW
IAD
BWI
IAH
MSP DEN
Food & Beverage
SEA
PHL
ORD
LAX MCO EWR
LAS
SFO
MIA
JFK
Retail
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
3
Comparative Airport Benchmarking
But, retail sales well below average, indicating growth potential
2014 Retail Sales per Enplanement
$8.00
Sales per Enplanement
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
DTW MDW CLT
ATL
SLC
PHX
ORD
IAD
DFW DEN
MSP
BWI
PHL
IAH
SEA
LAX
MCO EWR
SFO
LAS
MIA
JFK
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
4
Comparative Airport Benchmarking
Retail area well below average, leading to below-average sales
2014 Retail Relative Area
Area per 1,000 Enplanements (sq. ft.)
6.0
5.0
4.0
3.0
2.0
1.0
0.0
ORD
CLT MDW LAX
ATL
DEN
SLC
DFW
PHX
SEA
EWR
IAD
SFO
DTW MSP
IAH
LAS
BWI
JFK
PHL
MCO MIA
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
5
Comparative Airport Benchmarking
Entire concessions program is below average in space availability
Area per 1,000 Enplanements (sq. ft.)
2014 Total Relative Area
12.0
10.0
8.0
6.0
4.0
2.0
0.0
MDW ORD
CLT
ATL
LAX
DEN
SEA
SFO
SLC DFW IAH IAD PHX
Food & Beverage
Retail
BWI
LAS
EWR DTW
JFK
PHL
MSP MCO MIA
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
6
Our
Concessions
Master…Plan
Objective …
…
Planning
for Success
for Everybody
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
7
… Planning for Success … for Everybody
Space Requirements
The Right Amount of space
Space Layout
Optimal Locations to maximize
sales, operator profits, and rent
Concept Planning
Balancing customer needs and
operator feasibility
Merchandising
Blending local, national, and
international brands
Space Utilization Factor
Components
Passenger Characteristics
Demographics
Trip Purpose
Meeters/Greeters and Well-Wishers
O&D vs. Connecting
Residence
Facility Characteristics
Tenant Profitability Analysis -- Annual Cash Flow
Clustering of Concessions
Pro Forma 2009 Sales (Based on Delta Relocation)
Accessibility
Main Terminal
Checkpoint
Concourse
Local Souvenirs
Books and
Newsstand
Newsstand
Newsstand
Chocolate
Visibility
Area
800
2,199
1,210
1,618
2,822
Capital Investment
$409,557
$668,052
$430,010
$749,097
$892,011
Airside vs. Landside
Pro Forma 2009 Sales
$256,687
$1,269,554
$1,005,038
$388,419
$1,033,235
Walking Distances
Expenses:
Peaking
Cost Passenger
of Goods
$112,942
$558,604
$442,217
$170,905
$454,624
Labor
72,124
144,248
72,124
144,248
216,372
Concessions
Characteristics
Other
Variable
12,834
63,478
50,252
19,421
51,662
Rent
29,776
147,268
116,584
45,057
119,855
Number
of
Facilities
Capital Recovery
54,975
30,250
40,450
70,550
Utilities
3,680
10,115
5,566
7,443
12,981
Category Mix 23,916
Overhead
118,286
93,641
36,190
96,268
Subtotal
$255,272
$1,096,975
$810,634
$463,713
$1,022,312
Branding
EBIDT
$172,580
$194,404
($75,293)
$10,923
Pricing Policies $1,415
9
1
2
3
4
5,10
6
Tenant Economics
Making sure Everybody Wins
7
$10 Boutique
305
$260,578
8,954
$3,409,304
$395,614
$4,348,548
$174,070
72,124
19,781
45,891
7,625
1,403
36,860
$357,754
$1,913,361
721,240
217,427
504,432
203,850
41,188
405,161
$4,006,660
$37,860
Less: Debt Service8
Cash Flow
Total
$341,889
($531,238)
$1,415
$172,580
$194,404
($75,293)
$10,923
$37,860
44.0%
16.6%
5.0%
11.6%
4.7%
0.9%
9.3%
-12.2%
($189,349)
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
8
Concessions Space Requirements
DEN needs 210,000 square feet by 2030
Concessions Space Requirements - Total Airside
(Square Feet)
Concessions Category
Developed
SUF
Current
Program
Concession Space Requirements
2020
2025
2030
Food and Beverage
5.3
114,186
171,500
186,900
209,000
News/Convenience, Specialty Retail, Services
4.1
52,849
132,500
144,500
161,600
Duty Free
6.0
2,837
8,600
9,300
10,200
169,872
312,600
340,700
380,800
32,295
35,225
39,391
1,431
1,544
1,711
Total Concession Space Requirement
Projected Enplanements (000)
Projected International Enplanements (000)
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
9
Concessions Space Requirements
DEN needs more space in all concessions categories
Current Program
2030 Planned Program
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
10
Finding Concessions Space
DEN needs 210,000 square feet by 2030
2030 Airside Concessions Space
(Square Feet)
Total Concession Space Requirement
380,800
Current Airside Program
169,872
Airside Concessions Space Deficit
210,928
Great Hall (estimated)
Sample Space Planning
75,000
Expanding Existing Concessions
Activating Mezzanines
Repurposing Non-Concessions Space
New Building Area
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
11
Space Development: Potential Sales Gain
Food & Beverage Concessions
2014 Sales:Area Ratio
Retail Concessions
2014 Sales:Area Ratio
$12.00
$8.00
$7.00
$10.00
$6.00
Sales/EP
Sales/EP
$8.00
$6.00
$4.00
$5.00
$4.00
$3.00
$2.00
$2.00
$1.00
$0.00
$0.00
0.0
2.0
4.0
6.0
8.0
0.0
1.0
Relative Area (SF/1000 EP)
2.0
3.0
4.0
5.0
6.0
Relative Area (SF/1000 EP)
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
12
Space Development: Projected Sales Gain
$128 Million incremental sales
Sources of Projected Sales Growth
2014 Actual to 2030 Projection
Millions
(2014 Dollars)
$600.0
$500.0
$128.6
$400.0
$300.0
$200.0
$480.8
$56.9
$537.7
Enplanement Growth
2025-2030
2030 Projection
$66.9
$285.4
$100.0
$0.0
2014 Actual
Enplanement Growth Program Expansion
2014-2025
2025 Projection
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
13
Next Steps
Task
Schedule
Infrastructure Inventory
Finalize Space Plan
Financial Plan
Phasing Plan
Master Plan Document
DENVER INTERNATIONAL AIRPORT
CONCESSIONS MASTER PLAN UPDATE
Working Draft for Discussion Purposes
JANUARY 25, 2016
14