IN IND Concessions Refresh Program I nformation & Networking Session November 8, 2017 10:00am South Ticketing Hall Indianapolis International Airport https://www.ind.com/business/concessions-refresh-program
Agenda - Information & Networking Session 10:00am – 12:00pm Presentation: • Welcome & Introductions from IAA Team • IND Overview and Profile • Review of Concessions Program and Future Space Planning • Prime Concessionaires Introductions • ACDBE Program • Board of Health Review • Procurement Process • Q & A Noon-1pm: Lunch on Catwalk 1pm-5pm: Networking and Tours
Welc lcome and In Introductions Mario Rodriguez – Executive Director Mamon Powers – IAA Board Member/Chair of the Terminal Optimization Committee Al Bennett – IAA Board Member Marsha Stone – Sr. Director of Commercial Enterprise David Shaw – Director of Concessions & Air Service Jason Paltzer – Retail Operations Coordinator Carol Hurley – Marion County Public Health Department Holli Harrington – Director of Supplier Diversity Doreen Cherry – Procurement Manager
IND Overview an IN and Pro rofile 49 Nonstop Destinations – ties most in IND history 8.6+ million projected travelers in 2017 2% more travelers in 2017 vs. 2016 2017 is trending to be a record year Origination & Destination (O&D) Airport Alaska Airlines began operating at IND in May 2017 Delta announced a nonstop flight to Paris, France – to begin in May 2018 4
Ser erving In Indiana (a (and Beyond) • IND is only 7 miles to downtown • 1.9 million residents in Indy metropolitan • Primary service area population >3,000,000 • Approximately 2 hour drive time 5
IND is Economic Engine for Central Indiana • > $5.4 billion annual economic impact • > 10,000 on airport jobs • 49 nonstop destinations – ties IND record! (Up from 39 in just 2014) • Most West Coast access in IND history • IND ranks Top 10 Connected Medium Airports (Source: MIT Airport Connectivity Quality Index) • #2 largest FedEx operation in world • Nation’s eighth -largest cargo facility • No local taxes used for airport operations 6
Departing Passenger Historical Data Departing Passenger Data from 2013-2017 4,400,000 4,300,000 4,239,828 4,200,000 4,008,256 4,000,000 3,800,000 3,683,765 2018 and Beyond 3,598,718 3,600,000 +1.0%-1.9% Growth Forecast 3,400,000 3,200,000 2013 2014 2015 2016 2017 7
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Air irline Market Share (a (as of f September 2017) – Robust Competition 1% 3% 21% 34% 3% 23% 14% 1% 9
IND - Perennial World Class Award Winning Airport • J.D. Power North America Airport Satisfaction Study Highest in Customer Satisfaction for Medium Airports 2010 and 2016 • ACI Airport Service Quality Award Best Airport in North America 2010, 2012, 2013, 2014, 2015, 2016 • ACI Director General’s Roll of Excellence • Condé Nast Traveler Readers’ Choice Best Airport in America 2014, 2015, 2016 and 2017 • Travel + Leisure World’s Best Awards Top 10 Best Domestic Airports, 2016 • TripAdvisor Travelers’ Choice Favorite U.S. Airport, 2016 10
ConcessionsOverview – Today’s Program Concourse B • 54 retail and food & beverage concessions spaces • 65,000 + square feet of concessions Civic Plaza space • 42% of concessions space are pre-security Concourse A • 58% of concessions space are post-security
Concession Refresh Program • Enhance Customer Experience • Create a Sense of Place • Remain Relevant for Today’s Traveler Guiding Principles for Sense of Place Authenticity Discovery/Surprise Delight
Concessions Overview – Today’s Program Concession SPACE Concession SALES 28% 42% 58% 72% Pre-Security Post-Security Pre-Security Post-Security 13
ConcessionsProgram Overall Sales Gross Sales by Category Sales Per Departing Passenger Food and Beverage News & Convenience Specialty Retail EPAX $11.20 $50.0 4,400,000 $11.16 Millions 4,300,000 $45.0 21% 4,200,000 $40.0 4,100,000 $35.0 14% $10.90 4,000,000 $30.0 3,900,000 $25.0 $10.72 3,800,000 $20.0 65% 3,700,000 $15.0 3,600,000 $10.0 3,500,000 $5.0 3,400,000 $- 3,300,000 2014 2015 2016 2017 2014 2015 2016 2017
Future Concessions Refresh Program Objectives • Optimize the customer experience and increase customer/passenger satisfaction • Maximize Concessionaire financial returns and Revenue to Airport • Create a “sense of place” and capture the spirit of Indianapolis and the region • Represent local, regional, national and international concepts and brands • Create opportunities for Airport Concessions Disadvantaged Business Enterprises (“ACDBE”) • Remain relevant in a dynamic ever-changing environment 15
Future Business Opportunity • 40 concessions spaces are expiring at the end of 2018 • 5 concessions spaces are expiring at the end of 2020 DRAFT – SUBJECT TO CHANGE 16
Doing Business at an Airport Airport vs. Street Retail: Key Business Considerations • Construction Costs • Security • Airline Operations • Small Spaces • Operating Hours • Operating Costs • Delivery/Storage • Employee Badging • Employee Parking • Labor 17
Possible Deal Structures • Direct Lease • Joint venture • Participation financially and operationally by two or more parties • Sublease • Prime concessionaire and one or more subtenants • Licensing/Franchising • Other 18
DRAFT – SUBJECT TO CHANGE Future Concessions Space Allo llocation Recommendation Current Proposed 30% 42% 58% 70% Post-Security Pre-Security Post-Security Pre-Security 19
DRAFT – SUBJECT TO CHANGE Future Concessions Programming Recap • 50 News & Convenience, Concourse B Retail and Food & Beverage Concessions Spaces Civic Plaza • 62,000+ Square Feet of Concessions Space Concourse A • 30% of Concessions space is Pre-Security, 70% is Post- Security 20
Civic Plaza - DRAFT – SUBJECT TO CHANGE Civic Plaza - Existing Civic Plaza - Proposed Total Square Footage Offerings Current: 27,599 Proposed: 19,480
Concourse A - Proposed Concourse A - Proposed Total Square Footage Offerings Current: 19,828 Proposed: 20,435 Concourse A - DRAFT – SUBJECT TO CHANGE Concourse A - Existing 22
Concourse B - Proposed Concourse B - Proposed Fast Casual Total Square Footage Offerings Current: 19,557 Proposed: 24,335 Concourse B - DRAFT – SUBJECT TO CHANGE Concourse B - Existing 23
Anti ticip ipated Tim Timeli line Event Anticipated Date* Information and Networking November 8, 2017 Issue Solicitation February 2018 Solicitation Response Due Date 2018 Q2 Tenant Solicitation Award (s) 2018 Q3 Phased Construction Timeline 2019 - 2021 https://www.ind.com/business/concessions-refresh-program TENTATIVE – SUBJECT TO CHANGE 24
The IAA’s Supplier Diversity Program Holli Harrington – Director of Supplier Diversity
About Our Polic licie ies The Indianapolis Airport Authority (IAA) values diversity and is committed to providing meaningful opportunities to Disadvantaged, Minority, Women and Veteran Business Enterprises (DMWVBE). It is the policy of the IAA to implement measures to increase the participation and utilization of DMWVBE’s in Authority contracts and their respective subcontracts issued in relation to airport related services and purchases, including but not limited to construction, professional services, goods and concessions. ACDBE Program: Participation of Disadvantaged Business Enterprises in Airport Concessions The United States Department of Transportation (USDOT) requires every airport that receives federal grants to maintain a Disadvantaged Business Enterprise (DBE) Program. The program for Airport Concession DBEs (ACDBE), is mandated by Title 49 Code of Federal Regulations part 23 (49 CFR 23).
Purpose of the ACDBE Program • To ensure nondiscrimination in the award and administration of concession opportunities • To create a level playing field on which ACDBEs can compete fairly for concession opportunities • To ensure that only firms that fully meet ACDBE eligibility standards are permitted to participate • To help remove barriers to the participation of ACDBEs in concession opportunities Who Can Quali lify as an ACDBE? Only firms organized for profit are eligible §26.73(d). • To qualify as an ACDBE, a firm must be: • An existing small business, as defined by Small Business Administration (SBA) standards • At least 51% owned by socially and economically disadvantaged individuals who: ✓ are US citizens or permanent residents ✓ possess expertise in their field ✓ control the daily business operations ✓ Have a personal net worth less than $1,320,000
Busin iness Opportunities for ACDBEs • Food and Beverage Concessions • News & Gift Concessions • Specialty Retail Concessions • Services Concessions • Goods and Services Supplier • Management/Joint Venture
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Carol Hurley – Environmental Health Specialist churley@marionhealth.org Office Number 317-221-2255 Cell Number 317-373-2713 30
Mission Statement To Promote Physical, Mental and Environmental Health; Prevent and Protect Against Disease, Injury and Disability. 31
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