Tampa Revamps Concessions & Retail for $13.5 Million

Tampa International Airport (TPA) snagged the title of "best airport in the country" in a recent Zagat survey, but it's not resting on its laurels. Throughout the past year, TPA has initiated extensive improvements to more than half of the retail and food/beverage offerings in the airport and has introduced new concepts throughout its airside and landside facilities.

In December 2007, TPA extended its contracts with HMSHost, the prime operator that holds licenses to operate major retail and food/beverage brands. HMSHost also maintains subleasing rights in the airport. Although the contract wasn't scheduled to expire until 2010, TPA extended it until 2015. The new expiration date not only synchronizes with the projected opening of the airport's new north terminal, it also accelerates the redevelopment of current retail and food/beverage programs.

HMSHost operates in more than 100 airports worldwide - including North America's 20 busiest airports - and was the first to introduce brands into airport venues in the early '80s.

Why So Early?

Timing was a critical component in TPA's decision to extend the contracts and the resulting construction projects.

"We extended both the retail and food and beverage contracts in exchange for more branded concepts, which required HMSHost to invest more in construction than was required under the existing contract," explains Diane Vercelli, senior director of properties and contracts at TPA.

Transition language not included in the former agreement was also added.

With the north terminal project looming, current and potential tenants are anticipating changes in traffic patterns. According to Steve Johnson, senior vice president of business development at HMSHost, it would be difficult for TPA to bid out redevelopment of retail and concessions now when a portion of the traffic will be going to the new terminal in six years.

"When the new north terminal opens," Johnson says, "our contract will be coming to an end and then it can be bid out as a package. Companies will know what they are bidding on. By refurbishing and reconcepting the existing facilities, Tampa Airport alleviates the problem of new vendors hesitating over whether they would be able to recoup their investment in six years."

Increasing Revenues

Tampa International's overarching goal was to increase concessions revenue throughout the landside area of the airport to balance the post-9/11 migration of vendors to airside areas. More than half of the retail and food/beverage facilities, both landside and airside, are being either refurbished or reconcepted.

Johnson categorizes Tampa International as a healthy, even "ideal," airport.

"It has nice traffic flow and is considered one of the best airports in the country," he explains. "It's easy to navigate, travelers like it and it has a nice balance of pre-security and post-security retail and food and beverage locations."

Despite the troubled economy and lower passenger traffic, TPA hopes to see a 25% increase in revenues the first year after the major refurbishment/reconcepting efforts and 5% to 10% thereafter.

Johnson concurs about the likelihood of increased revenues for the airport, citing Carrabba's Italian Grill as an example: "We're spending $2.5 to $3 million on that restaurant alone. The old Wharf restaurant, which was a nice restaurant in its day, did about $2.5 million in annual revenue. The new Carrabba's will do about $5 million. When you put out a new quality brand, even though it's in the same location as the old brand, sales go up. Because our rent is based on sales volume, the airport stands to make a lot more money."

Facts and Figures Project: Redeveloping and Reconcepting Retail & Concessions Programs Location: Tampa International Airport Cost: $10 million (Food/Beverage); $3.5 million (Retail) Prime Operator: HMSHost Architectural Firms: CSJM Architects, Chute Gerdeman, DP3 Architects, Lami Grubb Architects, Pavlik, Design Team, Schenkel Shultz Contractors: Independence Construction, Miken Corporation, Sierra Construction

TGIFriday's is undergoing extensive renovations. "We're spending a lot of money to make it look brand new," Johnson says. Even before the makeover, the landside airport restaurant, directly across from Carrabba's, was already the highest grossing location in the entire chain.

Except for work on TGIFriday's and Burger King, construction is scheduled to be complete by the end of this year. Carrabba's, the first in any airport, is scheduled to open in November.

A phased construction plan is alleviating excessive construction noise for both travelers and tenants. Delaying construction of TGIFriday's and Burger King until after spring break prevents a business lag for the restaurants during that particularly high-traffic season.

Communication Is Key

Initiating a project that touches so many retailers and food/beverage vendors throughout the airport could easily lead to a logistical nightmare. Communication between HMSHost and airport management has been critical to its success. To facilitate communications, TPA management assembled an in-house project team with representatives from Properties, Planning and Development, Maintenance, Operations, and Security to meet bi-weekly with the project and development staff from HMSHost and its architects and contractors.

New Retailers at Tampa International Landside • Brookstone • Destination Time • Harley Davidson • News Central • Sport's Scene • Talie • Tommy Bahama/Vera Bradley • United Colors of Benetton Airside • Bijoux Terner • I Tech (three locations) • News Express • Postcards from Tampa • Sweet Factory

New Food & Beverage Options at Tampa International Landside • Baja Fresh Mexican Grill • Brioche Doree • Carrabba's Italian Grill • Zia Juice Airside • Chili's Too-To Go • Popeye's Chicken & Biscuits • Sam Snead's Tavern

The scope and tight timeline of the project required the participation of several architectural firms and contractors. In addition to the companies HMSHost hires, sublessees often bring their own.

"TPA management is pleased with how the project has progressed," says concessions and business development manager Connie Mundzak. "Tenants and airport staff have had strongly favorable reactions to the scope of the project, how it has been handled and what it will bring to our airport. These positive reactions are a direct reflection on

HMSHost's professionalism and TPA management's commitment to stay closely connected to the project."