Reflecting on August 10

Airport concessionaires shareexperiencefollowinglatest security rules

There are events synonymous with dates not soon forgotten, and August 10, 2006, falls under that category for North American Airports and their business partners. Amid security concerns about gels, liquids and aerosols, such hand-carried items were prohibited past security checkpoints and aboard planes. While these liquid and gel restrictions have since relaxed significantly in both the United States and Canada, Centerlines surveyed a cross-section of associate member companies to share experiences generated from August 10.

Rodderick I.McOwan, CreativeHost Services' Executive Director

It has been a very complex time. When it hit on August 10, there was a lot of confusion in terms of the message that was delivered. You can’t do anything. You can’t serve any water to the customers. Then you can. But you must take the tops off. Then you can’t. Then you can.

We quickly adapted to it, but it severely impacted revenues. We have been doing some promotional work where if you bought a bottle of water at a specific price, the second bottle was $1. Prior to August 10, we had anywhere between 25 percent and 40 percent of consumers buying the second bottle of water.

That obviously had a major impact on us pre-security, and post-security it wasn’t working out. Because, after all, how do you drink two bottles of water before you get on the plane?"

Nick Biello, President of Delaware North Companies TravelHospitality Services

It was every possible scenario, and that went on for about two days. After those two days were over, it all settled down. With bottled beverages, some airports were allowed to sell them, some airports were allowed to sell them if they took the caps off, and some airports were allowed to sell them if they took the caps off and poured them into a plastic cup. At some airports, we couldn’t give the plastic lid we generally supply with fountain drinks because they wanted to minimize the opportunity to take it on the flight.

I think when you make decisions and just pass an edict out of Washington, the rules are up for interpretation and everyone interprets them differently.

That is why we have to be so flexible. I remember people were asking me that day what we were doing differently. My thought was caution; don’t do things too differently because things change so dramatically in this industry that you can go off the cliff trying to change and get ahead of it."

Mark Knight, BAA USA Vice President and Regional Director

A couple of things happened. We had some products that could not be sold, but that was balanced by longer dwell times. As a general statement, we held our own and in most cases our total business went up. Obviously, specific merchants had difficulty. For example, The Body Shop and places like that that sell virtually all liquids. . .that’s a different story. But on the whole, I was a little surprised to see the business stay as strong as it actually was.

There have been some changes made that may positively impact our business. Liquids purchased airside now appear to be acceptable for carry on. That is huge because, of course, that will now give an opportunity for all the people that are a little unsure that they can actually purchase their products with peace of mind. And it will be good for business as well. I think that is a really positive development.

Jean-BaptisteMorin,HDS Retail NA President and CEO

"From August 10th until September 22nd, the retail of liquids, gels and aerosols of any kind was not allowed in the sterile, post-security area in Canada. All products such as shaving cream, toothpaste, shampoo and food products like maple syrup, which is a staple in Canadian souvenir locations, couldn't be sold. It has been a major hit. We have rents that are to be paid no matter what happens, and we had a major disruption to our service. For example, we had to shut down our post-security Fruits & Passion body care locations. These are now reopen, but were closed for six weeks.

Basically the interpretation of the bans and these new security measures were stricter in Canada, which was frustrating for us during that period of time. We also operate stores in the U.S. where we were fully capable of selling beverages. The irony of this is we could sell drinks in the U.S., which was the target, while we could not in a country that was not."

Gregg Paradies, The Paradies Shops President and CEO

"There were changes in the merchandise. People who would regularly buy a snowglobe bought a deck of cards or t-shirts. Overnight, we adjusted the way we did things. We offered free shipping in some cases, and we provided arrival kits for both men and women with travel-size essential items: shampoo, deodorant, shaving cream all for $12.99 in pre-security locations.Now our stores have the quart-size plastic bags that are being made available free-of-charge as a courtesy."

Roger Fordyce,HudsonGroup Executive Vice President ofOperations

The immediate hours right after the ban were more chaotic than anything else. As the regulations came down, the landlords instructed us to pull certain products. We immediately sourced alternative health and beauty care products that were now banned. With items such as shaving cream and deodorants, there was no alternative. But Pepto-Bismol liquid was replaced with Pepto- Bismol tablets and NyQuil liquid went to a cold remedy tablet form, so we were still able to provide that product, but in an alternative format.

Anytime a new regulation comes out, we send our buyers back out to the market. The three-ounce situation is going to be the norm in many of our locations pre- and post-security because it is what passengers can take as carry on. So obviously, we will be sourcing products to meet the new standard and the sizing of the product that is appropriate for them.

Obviously, it is better for us on the beverage side because people can now take a bottle of water with them on the plane. Before, they were forced to consume, which may have swayed people not to purchase a beverage if they only thought they had five minutes and they had to guzzle it down real quick. I think that will help our sales on the food and beverage side."

Rana Florida,HMSHost Corporation Senior Director, Communications and Marketing

"Our mission throughout the whole process has been to make sure travelers get accurate and timely information. The whole process has been very confusing, so we have made efforts to give our employees accurate, up-to-date information to make sure the passengers have the information they need to make their trips easier and better. Whether it is through signage or verbal communication, we’re updating them on a constant basis. We recognize the need to help calm the travelers. Pre-security there was a decrease in beverage sales. We only have a few pre-security locations, but instead of getting a venti, customers would get a tall-sized coffee at Starbucks. And instead of getting a 32-ounce bottle of water, they would get a 16-ounce bottle of water. But post-security, people were getting to the airport earlier with more time to spend. We saw people gravitating to our sit-down restaurants and news cafes. With more time to sit down, we saw our sales increase."

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