San Francisco International Airport (SFO) has revised several details relating to its International Terminal Duty Free and Luxury Stores Leases concession that was advertised earlier this year – with all dates herein now replacing those announced earlier.

SFO management has confirmed that the International Terminal Duty Free and Luxury Stores Lease still covers the management and operation of 10 Duty Free and Luxury Stores locations in the International Terminal – pus one location in Terminal 1.

As reported earlier, the proposed minimum annual guarantee remains at $42m, with the minimum acceptable percentage rent offer set at 30% of gross revenues and the term of the proposed lease reconfirmed as 14 years.

International and domestic passenger growth at San Francisco International Airport. Click to enlarge. (Source: SFO/RFP document).

TWO MAIN LOCATIONS

SFO management says that the International Terminal will house four duty free locations and six luxury boutiques, while T1 will also continue to be a core duty free location, with the minimum acceptable investment from any bidder set at $1,000 per square foot, which is equivalent to $45.9m. In addition, a proposal bond of $1m is also required.

According to the airport’s pre-tender proposal documents, SFO passenger growth has increased by an average of 5.3% over the last five years and by 4.5% over the last ten.

DFS Group is currently the incumbent duty free retailer at San Francisco International Airport.

HIGHEST SPENDERS AT SFO

At the same time, airport management points to its passenger survey research which shows that the highest group of spenders fell into the $50 or below category – accounting for 37% of the total – followed by those spending $50 to $100 (29%), $101 to $200 (17%) and $200-plus (17%).

Turning to its scoring system for the evaluation of potential offers, SFO has set a total possible maximum of 110 that can be achieved by individual companies within the tender process.

It states that it will award 25 points for proposed concept, 20 for international design and capital investment, 10 for customer service and quality control, 10 for the business plan, 35 for the percentage rental offer and 10 for the oral interview.

International passengers by region/destination.

NEW SUBMISSION DATES

The new RFP date now replaces all previous timetables and is set at Monday September 11, 2017 (1400 hours) with the submittal deadline set at 1400 on Friday, September 15, 2017 at 14.00. In addition, SFO anticipates that the concession award will be published in November 2017.

As already reported, proposers must have had five years in the last eight owning a duty free business with luxury brands which has achieved minimum annual gross sales of $60m at a single airport.

For further information, contact John Reeb at tel: 650-821-4500; fax: 650-821-4519.