A six-strong panel debated several key issues including the current concession model and the sharing of data.

A lively panel discussion debating the current airport concession model illuminated the second plenary session of the TFWA Conference at the Marina Bay Sands Expo and Convention Centre this today (7 May).

Travel retail executives including Lagardère Travel Retail Asia Pacific Chief Operating Officer Emmanuel de Place; King Power (HK) Managing Director Sunil Tuli; Aer Rianta International CEO Jack MacGowan; Hunter Palmer Global Retail Solutions Co-Founder Keith Hunter; and Neuhaus CEO Ignace van Doorselaere all took part in the discussion.

Tuli said: “Airports release tenders and provide interested parties with all the relevant information and participants then make the necessary calculations and offer a proposed minimum annual guarantee.

“What happens if sales are not what they projected?”

LACK OF FLEXIBILITY

He continued: “Normally, retailers pay the minimum annual guarantee or percentage rent depending on which is higher, but what happens if things don’t turn out as planned on the sales front? There is no flexibility.”

Reiterating the need for more flexibility in contracts, de Place added: “We need to work with airports to see how we can be more flexible and have less constraints in contracts.

“There needs to be flexibility in terms of the duration of contracts and there are other ways to collaborate. Why can’t we look at profit sharing?”

MacGowan, however, defended the role of landlords. He said: “It is in the nature of a landlord to extract as much rent as they can and take as little risk as possible. Retailers have to present a picture where landlords will gain more.

“There is nothing that would help an airport more than taking more rent and less risk.”

“We have to present a picture that will be more attractive to airports. They will even gain more – maybe a 20% uplift in pax which is ambitious.”

Hunter added: “The point of profitability and revenue will always be key, but it is about putting the customer at the heart of everything we do.

“If the wrong concession is in place then the retailer is not making money, the offer is not as it should be and the whole experience is impacted.”

King Power (HK) Managing Director Sunil Tuli had strong opinions on the current airport concession model and how it needs to change.

DATA SHARING

Another issue debated extensively was the sharing of data and whether this works. MacGowan remarked: “Data works. It is absolutely powerful.

“The only question is, do I have more to gain or more to lose. For a company the size of  ARI, there is a lot to gain, but you have to convince the big players to play the game as well.”

Other presentations included a detail analysis from Boston Consulting Group Fillippo Bianchi who presented key findings and recommendations from a study commissioned by the TFWA on the evolution of the business model in DF&TR.

Bianchi commented: “When we speak about difficulty in sharing data, I appreciate from a historical sense people can be sensitive about this.”

Aer Rianta International CEO Jack MacGowan believes the ‘big players’ must be convinced of the merits of sharing data.