Authors: Ilia Lioutov, Senior Expert, Airport Economics and ESG, ACI Asia-Pacific; ANARA Secretary; and Philip Kwok, Economic Research Analyst, ACI Asia-Pacific
The simple idea of dinning or eating out at restaurants has changed significantly over the past two years. The concept of “normal” has become blurred. Before entering restaurants, it is now a custom, or requested by law in some countries, for diners to have their body temperature checked, hands sanitized, and personal details recorded for tracking and tracing, all before they are allowed to sit down, look at the menu, and remove face masks.
As for dinning at airports, the COVID-19 pandemic has created impossible hurdles for businesses. Restaurants have been hit hard by the reduction in passenger traffic as a result of border closures, social distancing measures, and nationwide lockdowns. On top of that, financial burdens arose from capacity reductions, installation of disinfection equipment, and COVID-19 testing for staff.
Before the advent of COVID-19, non-aeronautical revenues accounted for about 40% of total airport revenue at the global level. Food and beverage activities contributed about 6%1 to all non-aeronautical revenue. In response to the diverse passenger profiles and demand, airports have been offering dining options ranging from grab-and-go kiosks, casual restaurants, bars and pubs to Michelin Star status fine dining. In fact, food and beverage was an increasingly important component of airport revenues, which were on an upward trend for 10 years preceding the pandemic, growing at about 10% year-over-year.
It is clear that we are quite some distance away from a global recovery. Although ACI forecasts passenger traffic will return to 2019 levels in the next two to three years, global passenger traffic is estimated to grow +3.7% per year in the next two decades. The pandemic serves as a perfect opportunity for businesses and airports to re-strategize and rethink their business models in anticipation of the increase in future demand.
Acknowledging the importance of non-aeronautical revenue as an essential part of airport economics, including the business of food and beverage, ACI World established the Airports’ Non-Aeronautical Revenues and Activities (ANARA) Sub-Committee in early 2021—a global platform for discussing, brainstorming, investigating, analyzing, and formulating strategies, policy recommendations, and industry positions on how best to improve, facilitate, and diversify the range of non-aeronautical revenue sources for the benefit of the air transport ecosystem.
ANARA developed a working agenda and identified four initial areas of focus: digital transformation, concession agreements, duty free, and ground access. Each area of focus included a working group staffed with experts from Member Airports and World Business Partners from around the world, with the mission to develop position statements, guidance material, and other reference documents to enable our industry stakeholders to improve the traveller experience and recover from the pandemic in a sustainable manner.
Nonetheless, as we enter the third year of the pandemic, the topic of food and beverage has been left unaddressed so far and the level of interest is mounting. Food and beverage is an important revenue stream for airport operators and it deserves unique attention regardless of whether passengers just want to get a quick bite, or are looking for an exquisite dining experience while watching aircraft take-off and land.
The food and beverage industry has been growing even outside of the airport realm. More people are choosing to dine out for a number of reasons, including the convenience factor and lack of time to cook at home and the social incentive of being with other people. Even more important is the general move from materialistic consumption to experiential consumption, where restaurants and other food and beverage outlets represent an opportunity to enjoy and explore the ever-growing options for dishes and drinks.
When it comes to airports, they offer an additional layer of convenience on one hand and sophistication and glamour on the other hand: from a conventional cup of coffee while rushing to the gate for an early morning flight, to an exquisite food and wine bar with an airside view making it a perfect place to grace a longer layover.
However, like with any other type of business, there are numerous threats and opportunities surrounding food and beverage at airports which need to be duly addressed by the airport community and their commercial counterparts. There are also important lessons learnt by airports and food and beverage operators which can serve as reference for their peers, and also best practices that can be discussed and shared for the benefit of travellers, airports, commercial operators, and the wider aviation ecosystem.
ANARA will launch a dedicated working group on airport food and beverage. ACI is calling on Airport Members, as well as World Business Partners who specialize in the domain of food and beverage to join ANARA and its prospective working group on the subject.
As ANARA embraces diversity, Airport Members of all sizes and World Business Partners representing various types of food and beverage activities and various scale of operation are warmly welcome to participate. Interested parties are invited to contact the Secretary of ANARA:
**Disclaimer: Acceptance of applications will be at the discretion of the Chair, Vice-Chair, and the Secretary of the sub-committee. Even though there is no constraint on the number of members admitted to ANARA, membership will be limited to ACI member airport operators and World Business Partners. Other non-member organizations may participate and present pertinent activities and findings (e.g., research, software, services, etc.) at meetings, but participation may only be limited to a portion of the meeting. These decisions will be at the discretion of the Chair, Vice-Chair, and the Secretary of the sub-committee.
 ACI World 2021 Airport Key Performance Indicators (2019 data)
Economic Research Analyst
Philip Kwok joined ACI Asia-Pacific in 2018 as Economic Research Analyst. Philip’s responsibilities include analyzing passenger traffic trends, airport financial performance, privatization processes and capital expenditures among airport operators in Asia-Pacific and the Middle East. Philip also assists in leading the Regional Economics Committee and provides regional specific insights to complement ACI World’s advocacy strategies and policy positions.