One of an airport’s most lucrative revenue streams is from commercial activities, which can be broken down into two categories: retail and food and beverage (F&B). Additional funds also come in from other sources, such as parking.
Income from retail and F&B often makes up half – or even more – of an airport’s total revenue. Therefore it’s easy to see why it’s so important for operators to continually develop and refresh their commercial offerings.
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By doing so, operators can not only enhance passenger experience but also make their sites more appealing to potential retail or F&B tenants. With this in mind, we take a look at some of the most interesting commercial projects recently completed or currently underway.
Stockholm-Arlanda Airport, Sweden
As part of the airport’s wider upgrade project, Swedish airport owner and operator Swedavia is making its biggest commercial investment to date, in the form of a new 11,000 square metre (118,403 square feet) retail space, called Marketplace, at Stockholm-Arlanda Airport (ARN).
When fully open, the airport’s commercial offering will have 40 new outlets, with a mix of Nordic and international offerings. The project came about as part of the operator’s long-term development plan to build capacity, as passenger numbers continue to grow post-pandemic.
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Retail and passenger studies informed Swedavia’s commercial strategy and the design of Marketplace, with the operator investigating how trends are influencing the wider market.
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By GlobalData“We looked internationally, and also considered potential future retail trends and the possible impact they might have on our airport because we’re always thinking about what’s coming next,” says Swedavia CCO Charlotte Ljunggren.
“We wanted to make sure we had something on offer for everyone; so local and global brands and different price ranges. You should be able to buy a hotdog for SEK20 ($1.91) but also have the option of more expensive fine dining.”
One of the project’s biggest challenges has been completing the work whilst the airport is still open to the public – the solution being to break the work into three separate stages.
Phase one was opened to the public on 27 September 2023, and has 10 new shopping and dining concepts, including three F&B offerings that are aimed towards families, with one open 24 hours a day, and a new flagship duty-free store.
“International visitors want to see things local to Sweden, so we’ve designed the store to look like a Swedish home, with a kitchen area, dining room, etc,” says Ljunggren. “We’ve also worked closely with local brands, so you can purchase locally-made gifts, food, and drinks. This has also been combined with large, international brands so that passengers have a good selection of options.”
In response to passenger needs and trends, Swedavia and its Switzerland-based travel retailer partner Dufry also introduced a ‘pre-order and collect in-store’ service for the duty-free store, as “we think it’s very important to accommodate the evolving needs of our passengers,” Ljunggren says.
As part of their work, Marketplace’s designers also created dedicated areas for pop-ups to provide new experiences for regular travellers. Retail pop-ups have a space set aside in the heart of the commercial area, while the food hall has a space for two F&B pop-ups that will change twice a year.
Phase two is scheduled for completion this year, with the final phase, and the full Marketplace, opening at the beginning of 2025.
John F. Kennedy International Airport, US
As part of the larger redevelopment project currently underway at John F. Kennedy International Airport (JFK), $125m is being invested into redesigning and expanding Terminal 8’s commercial area.
It will feature a New York-inspired ‘Great Hall’, which will include a mix of locally-owned retail and F&B offerings, providing economic opportunities for the local community and showcasing New York’s iconic culinary and retail scene.
The renovated space is expected to bring over 60 new outlets to the terminal and create 300 concession jobs.
“Local businesses help us create a sense of place unique to the region,” says Amanda Zhang, American Airlines’ VP of airport affairs and facilities – JFK is one of the airline’s major hubs in the US.
“We look forward to working with our project partners and the local community to deliver a transformative dining and shopping experience that represents the dynamic New York region.”
Leading the development is JFK T8 Innovation Partners, a joint venture led by URW, which says it is committed to achieving the goal of 30% Airport Concessions Disadvantaged Business Enterprise (ACDBE) for concession operators.
ACDBE is a small business accelerator programme designed to help smaller retailers gain the opportunity to operate at airports.
Kansai International Airport, Japan
Kansai International Airport (KIX) opened its new integrated commercial area to the public in December 2023. The area has been completely redesigned, with a central plaza, a gate area where passengers can enjoy themselves right up to boarding, and four ‘mood’ zones that offer a range of atmospheres.
These mood zones are named Peaceful, Curious, Active, and Fun. They have been designed to improve customer flow and synergy effects, while offering travellers everything from luxury brands, cafes, and restaurants, to walkthrough duty-free shops, bars, and stores that provide a ‘sense of Japan’.
This work is an important part of KIX’s large-scale Terminal 1 renovation project, as Tatsuhisa Hida, stakeholder coordination manager at the T1 Renovation project management office, Kansai Airports, explains.
“Of our sales, approximately 60% are non-aero, and of these, the majority are retail sales – directly managed revenue and tenant rent – which we consider to be significant and important.”
The renovation project has been broken down into four phases and is scheduled for completion in spring 2025 ready for the Osaka-Kansai Expo. The end goal is to enhance the terminal’s capacity to approximately 40 million passengers – it was originally designed for 12 million and saw 23 million pass through in 2018.
“Demand has changed since the terminal originally opened; in particular we’ve seen a rapid increase in passenger numbers,” says Hida. “In response, we’re undertaking renovation work to expand international capacity, enhance the airside area, and improve passenger experience.”
At a size of 2,500 square metres (26,910 square feet), the new commercial area has one of the largest walkthrough duty-free stores in Japan with a total of 27 units, broken down into 16 retail stores, nine F&B outlets, one complex, and one service offering across 10,000 square metres (107,639 square feet). This will rise to 16,000 square metres (172,223 square feet) upon completion of Phase 4.
iGA Istanbul Airport, Turkey
Unifree Duty Free at iGA Istanbul Airport (IST) brings together 1,000 domestic and international luxury brands across an area of 53,000 square metres (570,487 square feet) in size and, according to the airport, is home to the world’s largest bazaar store, which – at 3,000 square metres (32,292 square feet) – offers items from over 100 national and domestic producers.
The scale of its physical shopping offering must be applauded, but the airport is now turning its sights to providing customers with a wider range of shopping options.
No stranger to technology, having already introduced holographic narrations and digital assistants, iGA Istanbul Airport is now in the process of bringing in a contactless shopping experience in response to customer needs and retail trends.
It plans to launch ‘istBuy’ e-commerce platforms, where products and prices are listed and can be ordered in advance, with fast-moving consumer goods (FMCGs) delivered to passengers by courier. These will follow on from the ability to peruse the airport’s restaurant options and reserve a table for the time of your choosing, which is already available.
There are also plans afoot to introduce istBuy Quick at the airport’s international terminal. When in place, this will enable travellers to scan and buy products without having to physically queue and check out with a member of staff.
The airport is also embracing AI technology to provide what it calls “a rewarding shopping experience” through another new digital offering, CİGA. CİGA is a virtual shopping assistant, which the airport claims is designed to help passengers make “more informed and conscious purchasing decisions”.
Using augmented reality (AR), the CiGA digital assistant character can offer travellers information about retail outlets in the airport and provides information on any promotional offers available.
“Using AR technology for shopping is crucial, as it represents the initial step towards the digitalisation of commerce at iGA Istanbul Airport,” says Ersin İnankul, VP of digital services and commerce at iGA Istanbul Airport.
“Passengers can now monitor dynamic campaigns and discount codes at iGA Istanbul Airport using AR technology. This AR-powered marketplace was developed to enhance the shopping experience for passengers at our airport, making it seamless and convenient while ensuring utmost comfort.”
