High-End Pet Resort at Denver Int'l Provides Convenience for Travelers, Boosts Non-Airline Revenue

Author: 
Ken Wysocky
Published in: 
May-June
2015

Things are going to the dogs (and cats) at Denver International Airport (DEN), and passengers - as well as airport officials - couldn't be happier.

The reason for their delight is Paradise 4 Paws, a luxury pet resort that opened at the airport in December. In addition to eliminating many of the hassles associated with dog and cat boarding for travelers, the 25,000-square-foot facility provides an ongoing source of non-aeronautical revenue for DEN. The company that operates the business is also thrilled, because the new location expands its, er, pawprint into another major market.

Under a 15-year agreement, Paradise 4 Paws pays DEN a fixed annual rental fee during its first two years - about $92,000 per year, reports airport spokesman Heath Montgomery. After that, the Chicago-based company pays either a higher rental fee or 10% of its gross annual revenue, whichever is greater. The rental rate increases about 10% per year after the initial two-year rate, notes Greg Hegarty, senior vice president of properties in DEN's revenue management division.

The idea of adding a high-end pet-boarding facility emerged from two sources: the airport's periodic customer surveys and benchmarking information about amenities at other similar-sized airports.

"The concept really came from our customers," Hegarty notes. "About 61 percent of our 53 million annual passengers either begin or end their trips in Denver, which surveys show is very animal-friendly. S

facts

figures
Project: High-End Pet Boarding
Location: Denver Int'l Airport
Within: WorldPort freight & cargo facility
Operator: Paradise 4 Paws 
Opened: Dec. 2014
Size: 25,000 sq. ft.
Capacity: 150 pets
Operator's Est. Building Cost: $1 million 
Lease Length: 15 yrs
Rent: $92,000/yr for first 2 yrs, then 10% higher rental fee or 10% of gross annual sales, whichever is greater
Project Architect: Schmidt Design 
General Contractor: Z Constructors Nationwide
Engineering: B & H Engineers

o in early 2014, we put out a request for proposals for pet lodging ... and Paradise 4 Paws brought to the table the most innovative and competitive package."

Saq Nadeem, the company's founder and chief executive officer, considers DEN a great fit for the company's target customers: affluent pet lovers.

"It's part of our business concept to focus on top airports in the United States, and Denver is always striving to be the best airport in the world," says Nadeem. The company operates three other pet resorts at Chicago O'Hare International, Chicago Midway International and Dallas/Fort Worth International and recently signed a contract to open a location at New York's John F. Kennedy International. It also operates two "boarding lounges" - one near Love Field in Dallas and another in central Denver where travelers can drop off their pets for shuttle-service delivery to the company's resorts.

"The response has been phenomenal," Nadeem says of the company's new location at DEN. "It's our best opening to date."

Pet Project

The Paradise 4 Paws at DEN is located inside WorldPort, a freight and cargo center on the south end of the airport. The facility can accommodate 150 animals a day, and is open 365 days a year; check-in and checkout is offered 24 hours a day. In addition to a variety of cageless accommodations, the resort offers on-site parking with complimentary terminal shuttle service, spa and grooming services, veterinary care, obedience training and massage therapy. A la carte options include bottled water, Frosty Paws frozen treats, personal cuddling time, bedtime stories, private pool time and Kitty Laser Tag. 

Canine lodging runs the gamut, ranging from 5-by-6-foot suites for $45 per night to "Top Dog" accommodations for $100 per night that provide Spot with a private 9-by-9-foot suite, complete with a flat-screen television, full-size bed and 24-hour webcam access for owners. 

Standard dog perks include premium bedding, nightly tuck-in service and playtime in one of the resort's two play areas: one for dogs under 25 pounds and another for larger dogs. Each area features a bone-shaped splash pool, indoor grass, soft rubber floors and webcams for pet owners with separation anxiety.

Cats are housed in a separate gated community. Rooms range from $25 per night for a 5-by-5-foot deluxe bungalow to $35 per night for 5-by-9-foot presidential accommodations. The resort's feline lodging overlooks an adventure jungle, where cats can cavort among custom-made trees or watch the constant movement inside a large aquarium.

Taking Care of Business

"We want to make pets' stays comfortable and enjoyable," Nadeem emphasizes. "We really focus on convenience and quality. We know how difficult and inconvenient it can be to leave a pet behind." 

By operating around the calendar and clock, Paradise 4 Paws makes it easy for passengers to drop off and pick up their pets - despite early departures or late arrivals, he notes. At more typical boarding facilities, travelers often end up paying for an extra night's stay because of holiday schedules or flight times outside of standard business hours.

"That's why we came up with the concept of a pet resort at an airport, where people can just drop off their pets on the way in and pick them up on the way out," says Nadeem. 

Demand for luxury pet boarding is driven by an increasing tendency for pet owners to "humanize" their dogs and cats, he observes. "More and more people are either putting off having children or marriage, and they're instead finding companionship with pets," explains Nadeem, quoting industry research that says 80 million U.S. households now include pets. 

"In addition, empty-nesters also are looking to fill a void left by departing children," says Nadeem, who owns two Blue Weimaraners (Vera and Miuccia) and two cats (Gucci and Versace). "I am one of those crazy pet people."

According to the American Pet Products Association, owners spent a whopping $58 billion on their four-legged friends last year, and it expects that number to exceed $60 billion in 2015. The category of pet services, which includes grooming and boarding, posted the biggest gains in 2014, with a nearly a 10% increase; and the association expects the category to grow 8% this year.

Revenue Diversification

At DEN, the Paradise 4 Paws pet resort reflects a different trend: boosting and diversifying non-aeronautical income.

"This revenue helps drive down the costs for airlines helps make us more competitive," Hegarty explains. "It's all about attracting airlines. If you can drive down airline costs, it makes you more competitive.

"This has been going on for decades," he continues. "As the airline industry evolved through consolidations, airports awakened to fact that they, too, needed to be competitive. Airlines are looking at how to best utilize their aircraft and which markets to serve ... so airports started to focus on the overall cost structures of doing business at their airports."

Like many other airports, DEN continues to search for new sources of non-aeronautical revenue to drive down costs for carriers. Paradise 4 Paws is simply one of its latest finds. 

"Airports are very focused on the volume of passengers ... and airlines drive that," adds Hegarty. "The more domestic and international travel we bring to our airport, the more revenue we generate through things like retail sales, car rentals, parking, food and beverage and so forth."

Fulfilling New Expectations

DEN passengers can expect even more top-tier amenities as the airport continues to study what travelers want - and then develops programs accordingly. 

"As technology continues to grow and becomes more accessible, it drives customer expectations," says Hegarty, pointing to the C concourse as an example. When the airport recently expanded the area, it included more comfortable gate seating, USB ports and outlets for charging electronics, and the ability to order food via computerized tablets. 

Looking ahead, he reports that the airport will work to improve customers' rental car experiences and solicit new vendors for about 70% of its concessions to attract fresh concepts.   

Many of the airport's future efforts will target two specific groups: "engaged explorers," defined as energetic and open-minded optimists who love the novelty of travel and share their opinions via social media, and "demanding elites," travelers who value status, are career- and family-oriented and desire a lot of options at the airport.

"Our analysis shows there are many different 'buckets' of Denver International travelers," he explains, "but these two segments represent the best opportunity to generate non-aeronautical revenue."
As for the "engaged explorers" and "demanding elites" with pets, DEN already has them covered.   

Subcategory: 
Concessions/Retail

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