Washington offers 7-year DF contract

By Doug Newhouse |

The Metropolitan Washington Airports Authority (MWAA) is tendering seven duty free/duty paid shops at Washington Dulles and two at Ronald Reagan Airport.


The seven post-security locations at Washington Dulles International Airport are in Concourses A, B, C and D comprising approximately 10,830sq ft, while the post-security locations at Ronald Reagan National will offer duty free/duty paid shops for transborder passengers in Terminals A and C.


The final date for submission of bids is May 28, 2014, with offers expected to be opened in June for both committee and Board approval. All operators will need to find a Disadvantaged Business Enterprise (DBE) partner to take on a 25% share in the business [DBE participation is obligatory if public airports in the US want to be able to call upon Federal funding-Ed].


The existing agreement with Duty Free Americas expires on July 31, 2014, with the new contract period set to run from August 1 2014 to July 31, 2021. [See chart below for sales history-Ed].



Sales at Washington Ronald Reagan Airport are mainly transborder and relatively small.




The new minimum annual guarantee has been set at $1.1337 per enplaned [departing] international passenger, or approximately $3.95m, based on 3,484,464 enplaned international passengers in 2013. As expected, the annual MAG will be calculated on the winning retailer’s offer times the previous year’s total enplaned international passengers. In addition, MWAA adds that the percentage of gross sales payable on this contract will be fixed at 22% of gross sales.


The successful bidder must also pay a ‘Performance Guarantee’ which is equal to 50% of the first year’s MAG and this will be adjusted at the end of each contract year. [Click on chart to enlarge].



Another unusual cost relates to the incumbent operator’s historic investment in fixed improvements for its facilities at Dulles Airport. The MWAA says these have not been fully amortized under the existing contract period, so any new operator that might be selected will have to pay a ‘buyout amount’. It says that this needs to be part of the overall proposal with the amount not exceeding $315,000.


Meanwhile, the MWAA only recent announced that a number of new or enhanced retail offerings are also being established at Washington Dulles Airport this year. These offers from Michael Kors, Coach, L’Occitane, Thomas Pink, Chanel, Dior, Lancôme, Burberry, Montblanc and Estée Lauder.


[See also: Big retail changes in Washington: http://www.trbusiness.com/index.php/regional/americas/14779-big-retail-and-restaurant-changes-for-ronald-reagan-national-airport-.html]


[TOP IMAGE: Washington Dulles International Airport].


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