Originally Posted by phesto
Spanish duty-free giant enters Vancouver airspace
Aldeasa beats Swiss operator to massive YVR contract, as airport expansion opens up new revenue streams to mirror terminal growth
Grant Wing
Highly visible changes at YVR – including a major expansion of its international terminal and a new duty-free operator – are opening up fresh opportunities for retailers and new streams of revenues for the airport.
The expansion, with four newly opened international gates, is part of YVR’s $1 billion capital construction project designed to accommodate a projected 3.6% increase in passenger traffic.
The $200 million, 36,000- square-metre terminal expansion also introduces a new logo and visual identity for the airport. A central pavilion area featuring a large jellyfish-filled aquarium and a stream flowing through the centre of the building will be completed this June.
YVR’s manager of retail and passenger services, Chris Gilliland, said the expansion allows YVR to significantly expand its commercial offerings to customers. Retail and concession revenues are a big part of YVR’s overall revenues.
YVR reported 2005 revenues of $329.8 million, of which $58.8 million were concession revenues. Non-aeronautical revenues accounted for about 60% of YVR’s total revenues in 2006.
Gilliland said YVR has a pricing policy that mandates brand retailers in the airport charge the same for their products in the airport as they do elsewhere. Also, YVR, which is 100% leased, selects tenants through a bid process requiring interested businesses to submit financials, customer service, concepts and capital expenditures.
Gilliland added that YVR makes efforts to keep products from overlapping with products sold at its duty-free shops. Duty-free sales are a lucrative part of YVR’s non-aviation related revenues, with net duty-free sales reaching $61.8 million in 2004.
YVR’s new duty-free operator, Aldeasa, ranked fourth largest airport retailer in the world, took over duty-free operations this March. YVR is its first operation in North America. Madrid-based Aldeasa was awarded YVR’s duty-free concession for an eight-year contract term, with a two-year option. Aldeasa was awarded the contract over larger incumbent Zurich-based Nuance Group, which operated YVR’s duty-free for about 10 years. Gilliland said Aldeasa is particularly strong in marketing to international customers and mentioned a recent sale of $7,000 worth of cigars to a Japanese visitor.
Aldeasa claims resilience to economic downturns and says it is the first duty-free operator to operate profitably following the extinction of duty-free for EEC flights, which caused a nearly 60% decline in sales for other European operators.
Aldeasa Vancouver CEO Toni Felany sees YVR operations as a strong entry into the North American market for Aldeasa. The company is also planning a duty-free concession in Atlanta later this year.
Felany said Aldeasa’s YVR stores currently have between 160 and 170 employees, which should rise to about 240 employees in June when the full operation is running. Aldeasa will also operate a duty-free store in downtown Vancouver.
Between 40 and 50 ex-Nuance employees have been hired so far at Aldeasa, with more possibly in the future, said Felany.
He said YVR is highly regarded among duty-free operators.
The airport authority, he said, is one of the “most known in the duty-free industry because they are very proactive and, especially, taking a North America prospective, it is among the best,” said Felany.
YVR’s Gilliland says the new duty-free operator and terminal expansion will provide advantages to all YVR retailers.
“From what I’ve heard everyone’s really excited because they are creating a brand new shopping experience, and when you combine that with thematics, you really create a dynamic shopping environment where everyone is going to succeed and everyone is going to win in that case.”
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