Interested bidders for the core 10-year duty free contract at Abu Dhabi’s Midfield Terminal Building (MTB) – slated to open on the 7 July 2017 – are ‘fine-tuning their proposals’ after Abu Dhabi Airports Company (ADAC) had to reallocate 2,500sq m – at the North and South ends of the airport – to the transfer security area.

 

Dan Cappell, ADAC’s Senior Vice President, Business Development told audience members at the MEADFA conference, held in Dubai this week that ‘to be fair’ to retailers the duty free tender will be relaunched by the end of this week to give those involved an opportunity to rethink their proposals after the unexpected shift in space in favour of a larger transfer security area.

 

“All of the other group drawings have been finalised; the time frame has been extended to the end March next year,” said Cappell. He also revealed that expressions of interest for the rest of the commercial offer – which include high street, travel essentials, luxury and F&B – will go out in the next two weeks with the RFPs being launched in January.

 

In an exclusive interview with TRBusiness for the November issue of the magazine, Mohammed Al Bulooki, Chief Commercial Officer for Abu Dhabi Airports Company said:

 

60% TECHNICAL AND 40% FINANCIAL

“While work progresses at a rapid pace on the Midfield Terminal Building, with more than 18,000 workers onsite at any time, an aggressive capacity enhancement programme is underway at our existing terminals to ensure the airport can handle the rapid passenger growth being experienced and forecasted to continue until the MTB opening.”

 

Dan Cappell, Senior Vice President of ADAC.

 

During Cappell’s presentation in Dubai this week, he was keen to point out that by focusing on the customer and the retail offer ADAC will be successful, which means it is not concerned that its tender evaluation criteria is based on 60% technical and 40% financial.

 

Cappell said that it took some negotiation to get this decision to be approved by the board. “We firmly believe though, that by focusing on the retail execution, the customer offer, quality of staff, the inclusion of Arabian hospitality and the overall customer experience, we’ll increase our penetration, conversion and spend.”

 

In terms of the unusual and potentially risky 60/40 balance in the evaluation criteria, Cappell simply said that if ADAC wants to raise the bar in terms of its retail offer, the technical aspect has to rank highly in order for all parties to make money.

 

Commercial zoning plans for MTB.

 

28,000SQ M OF COMMERCIAL SPACE

Cappell included some interesting context for his presentation by pointing out that just over 40 years ago there was no UAE. He talked about all the impressive new tourist attractions that have risen up out of the desert, such as Yas Island’s Formula 1 race track. He also mentioned future projects such as the Louvre and the Guggenheim museum.

 

He said that the Middle East and GCC in particular have been at the forefront of global investment in aviation and infrastructure over the past two decades.

 

He added that projected growth in Abu Dhabi is outstanding and ADAC expects pax to rise from 20m in 2014 to 40m in 2020. He believes that a major driver for consistent double-digit growth has been Etihad Airways.

 

Cappell reiterated, what was already reported back in April 2014, by TRBusiness.com, that commercial space accounts for 28,000sq m (excluding lounges). This is broken down into core duty free at 4,800sq m; retail 8,620sq m of which luxury represents 4,300sq m. High street and travel essentials account for 4,300sq m and 11,000sq m have been allocated to food and beverage. And finally four ‘iconic stores’ ranging in size from 290sq m to 490sq m with the option of three-storey frontages, will act as key focal points at the new terminal building.

 

Dan Cappell’s presentation made great use of virtual reality, prepared in collaboration with The Design Solution.

 

NECESSARY ADAPTATIONS PUSH BACK TENDER

The walkthrough duty free store is no longer 100% walkthrough – as a result of having to increase the transfer security ‘slabs’ by 2,500sq m on both the North and South side – meaning that the escalators are now more centrally located.

 

Cappell finished his presentation at MEADFA with a ‘clear message’: “To the brands and retailers tendering we have a very clear message: We urge you to be bold, be daring and be brave in your discussions.

 

“We are not constraining creativity in any way. Do not be afraid to push the envelope in retail innovation and execution. We have the space, we have the desire and commitment to create the world’s best airport retail offer that is aligned with this truly spectacular building.”

 

In the Q&A that followed, Cappell denied that luxury would dominate the retail portfolio at MTB, and instead pointed to a number of features, which cater to passengers with smaller budgets. This includes high street brands, travel essentials and a supermarket.

 

When a question was posed about the barriers to data sharing between all stakeholders, Cappell said he couldn’t understand this. He said that information such as the fact that 62% of passengers spent 2.5 hours dwell time at Abu Dhabi airport, was extremely useful to all parties.

 

Editor’s comment

Dan Cappell’s presentation was slick, clear and reasonably concise punctuated by video footage both of Abu Dhabi and others which made use of virtual reality to take the audience on a journey of the future MTB.

 

Left: MTB construction site.

 

As expected, Cappell made use of hyperbole at every given opportunity both about the MTB project and Abu Dhabi itself. While the operator’s claims that MTB’s retail offer will be ‘sensational, spectacular and revolutionary’ are yet to be proven, it certainly puts pressure on the team at ADAC until 2017 to deliver something that the world of aviation has never witnessed before.

 

TRBusiness also wonders if the opening will indeed still take place on the 17.07.2014, considering that the duty free tender has now been rescheduled at a reasonably early stage in the project. When TRBusiness spoke to Al Bulooki earlier this year, he was extremely confident that the deadline for opening would be met. He even claimed that he ‘liked the sound of 17.7.2017’ very much and was determined that a milestone event deserved a milestone date.

 

Cappell emphasised the importance of ‘quality staff’ and a customer-centric approach, which of course relies heavily on well-educated sales assistants and servers etc.

 

It will certainly be difficult to manage and train a huge team of staff at the new 700,000sq m terminal. It will be interesting to see if the airport operator, together with the retailers and brands will be able to control consistently excellent service and ensure that it aligns with the potentially ‘sensational’ retail offer.