New Connector Opens Concessions Opportunities at Philly Int'l

Borrowing from its own playbook, Philadelphia International Airport (PHL) is developing concessions for Terminals D and E using a scaled-down version of the strategy it used in the Terminal B/C Connector a decade ago.

When PHL consolidated Terminals B and C into one collective building for US Airways operations in 1998, it had enough space available to create a mall-like area with 33 stores and a sizable food court. The development, dubbed The Philadelphia Marketplace, was a "tremendous success," says Jim Tyrell, deputy director of Aviation Property Management & Business Development at PHL.

Ten years later, a new consolidated checkpoint has led to a similar project for the remainder of the airport's domestic carriers in Terminals D and E. The two former security checkpoints, with four lanes each, have been replaced by a 14-lane consolidated checkpoint in the recently completed D/E Connector. The connector allows passengers to conveniently traverse Concourses A, B, C and D to Concourse E without having to go through security checkpoints again.

Real Estate Realization

Once again, PHL had significant space available, so it developed another concessions area - this time with 10 post-security units in a 7,700-square-foot space.

As with the retail shops and food and beverage outlets in the B/C Connector, the initial D/E Connector offerings were selected by PHL in conjunction with Marketplace Development, its planning, management and development firm. Stores that made the cut include Tech Showcase, a high-tech computer equipment and accessories store that started in PHL as a cart location. It joins seven national retailers: Borders Books, Taxco Sterling, InMotion, Lids/Lids Kids, Sunglass Hut, Crocs and Brookstone. Two new food and beverage options, Peet's Coffee and Vino Volo (profiled in our July/August 2008 issue) round out the new mall-like space.

Construction of the new spaces began in early 2006 and concluded on Dec. 30, 2008.

"We are very pleased with their performance given the time of year that they opened and our current economic climate," says Marketplace Development president Paul McGinn. "They are doing well."

The new D/E Connector will eventually also include additional ticket counters, gates, baggage claim areas and even more food and retail spaces.

Photo Credit: Rick McMullin, Philadelphia International Aiport.

Larger Issues

Prior to the current expansion project, D/E was often seen as the "difficult stepchild" of the airport. "D/E was the oldest area with difficult operations," explains Tyrell.

Southwest Airlines, for instance, operated four gates in Terminal D and four in Terminal E. Passengers arriving in D and connecting to flights in E had to exit D and go through security again in Terminal E. "It was a difficult situation," recalls Tyrell. "Now you have a very smooth transition between the two that makes it so much nicer."

While facilitating flow, PHL also maximized concessions revenues. And even more is expected. The new, 10-unit mall is merely Phase I of the airport's three-phase $250 million expansion project.

The recently completed security checkpoint and concessions development will be followed by a second phase, which will consolidate the ticket building and an inline screening building to screen bags more efficiently in the back of house.

Phase II will also include an additional six to eight stores, depending on the surrounding tenant mix. "These locations are being leased now and are expected to open within the next year," reports Tyrell.

In April, PHL and Marketplace had completed a conceptual identification process on the food side and were beginning to review retail options.

"Marketplace is reviewing solicitations and will be making recommendations," Tyrell notes. "As a leasing operation, they never stop trying to identify tenants."

Phase III will complete the project with a hammerhead expansion on the end of Terminal E to add three new gates and create a seven-gate complex on the rotunda for Southwest. The hammerhead will also include a 5,000-square-foot foodcourt with four new concessions. The new units are slated to open in spring 2010, when Southwest begins to operate at its new gates.

Facts & Figures Project: Concessions Development Location: Philadelphia International Airport Terminal D/E Connector Developer: Marketplace Development Units: 8 retail units, 2 food and beverage outlets Construction Complete: Dec. 30, 2008

A Legacy of Success

Since the completion of The Philadelphia Marketplace in the B/C Connector, Marketplace Development developed PHL's new commuter Terminal F in 2001 and the new international Terminal A West in 2002.

"Marketplace works in partnership with the City of Philadelphia on all the terminal expansion and improvement projects at PHL," McGinn says. "The result has been a dramatic improvement in the retail and food choices available to the traveling public at PHL. Over the past 14 years, we've worked closely with PHL to create a world-class retail program with more than 160 award-winning food and retail locations."

PHL and Marketplace Development's work was validated when J.D. Power and Associates announced that PHL ranked "Highest in Overall Passenger Satisfaction" among large airports in its 2008 North America Airport Satisfaction Survey. Food and retail services are one of six categories passengers rate.

In addition, The Philadelphia Marketplace in PHL's B/C Connector was recognized by Airports Council International-North America (ACI-NA) as the "Best Food and Beverage Program" of 2008 among large airports in North America.

According to Tyrell, the 10 newest offerings in the D/E Connector were not factored into the judging process of either award due to their late-2008 opening. The awards, however, have helped the airport's subsequent leasing efforts.

"The D/E Connector is an addendum to an already honored award-winning program," he explains.