Enhancing Concessionaire Management through Airport Retail Analytics solution

In recent years, the significance of airport ancillary revenue has become increasingly apparent. Traditionally, the focus has been on direct revenue from aircraft and passenger operations. However, attention is now shifting to ancillary services such as leases, parking fees, concessionaires, and more.

In May 2022, the Airports Council International (ACI) World released a White Paper highlighting commercial business strategy to help retail stakeholders leverage airports for growth and increased sales as passenger traffic rebounds. It also examines the legislative and regulatory policies affecting airport retail.

According to the latest report by Technavio on the airport ancillary revenue market, the sector is expected to expand at a compounded annual growth rate (CAGR) of nearly 8%, with an anticipated increase of USD 32.5 billion between 2021 and 2026. Concessionaires, including retail shops, car rental agencies, bars, food service companies, and coffee shops, play a crucial role in this growth. Effective concession contract management is essential to the airport revenue model.

Harnessing Data for Concessionaire
Contract Management

Managing concessionaire contracts involves various tasks, but with the smart use of data, artificial intelligence, and machine learning, these can become streamlined and precise. AI-driven solutions that capture concessionaires’ Point of Sale (POS) data in real-time can prevent revenue leakage, ensuring accurate income computation for airports.

Role-based analytics for real estate management, retail stores, food and beverage outlets, duty-free shops, car park utilization, and other ancillary units provide valuable insights into the entire ecosystem. This empowers airports to manage concession contracts more effectively, making data a critical component of concessionaire revenue and contract management.

Harnessing Data for Concessionaire Contract Management

The Role of IoT in Concessionaire
Revenue Management

Implementing the Internet of Things (IoT) is key to operational efficiency and revenue generation. IoT relies on three main components: devices, sensors or internet connectivity, and data analytics. When combined with machine learning, these analytics can help airports:

  • Reduce queue times
  • Increase dwell times
  • Enhance passenger experiences
  • Boost airport revenue
  • Improve cash flow with a unified view of all retailers
  • Minimize audit costs through faster, automated reporting
  • Increase returns from concessionaires
The Role of IoT in Concessionaire Revenue Management

IoT devices capture transaction receipts and billing orders in real-time, sending this information to a central server. This real-time automated sales data capture allows airports to analyze, audit, and monitor concessionaire sales accurately. Airports can also send promotional messages or coupons to passengers’ smartphones, encouraging upsales and cross-sales.

Impact of Retail Analytics on
Concessionaire Contract Management

web-management Fosters Mutual Interest Real-time data and its analysis allow airports to track concessionaire performance, helping draft contracts that serve the interests of all stakeholders, including customers, asset owners, and concessionaires.

web-management Improves Transparency Technological advances make airports more data-driven, enhancing transparency and fostering seamless information sharing among stakeholders. This leads to strategic decision-making and operational excellence, ultimately benefiting ancillary revenue.

Screenshot of Impact of Retail Analytics on Concessionaire Contract Management

web-management Aligns Stakeholder Interests Stakeholders share common interests such as payment, service quality, and product quality. Effective airport ecosystems require balancing these interests with individual motives. Retail revenue data analytics create transparency, aiding in structuring concession contracts and aligning stakeholder interests.

web-management Enhances Collaboration Effective collaboration between concessionaires and other stakeholders is crucial. Transparency facilitated by data analytics helps in planning, procuring items, and adjusting to changing consumer needs, fostering collaboration and enhancing the overall ecosystem.

web-management Improves Concessionaire Selection Retail revenue data analytics provide in-depth insights to objectively review concessionaires’ performance. This helps authorities decide whether to restructure contracts or replace underperforming concessionaires.

Conclusion

Technology unites all stakeholders, including concessionaires, to enhance the customer experience and maintain a balanced airport ecosystem. Integrating airport retail analytics technology benefits everyone—airport authorities, asset owners, customers, and concessionaires—ensuring a win-win situation for all.