Travellers view Vancouver International Airport Authority (YVR) as the place they go to catch a flight. Retail executives at the facility, however, view the airport as a shopping centre.
They know that their customers’ prime concern is to board their plane. Their goal, however, is to entice each passenger to shop as much as possible while in transit.
Their success has been impressive.
Each passenger at YVR spends an average of approximately $20.50 at the airport before boarding a flight. That’s second only to New York’s John F. Kennedy Airport (JFK), where passengers spend an average of US$24.07.
YVR also has the most square feet of retail space per passenger among major North American airports. But the airport is not resting on its laurels. Instead, it is planning to expand retail offerings.
YVR, which boasts 170 shops and 166,000 square feet of retail space, confirmed in June that it has partnered with London-based developer McArthurGlen Group to build a 340,000-square-foot outlet mall next to the airport. Other plans are to add an additional 16,800 square feet of retail, food and beverage space by 2015 to an area known as A & B Pier.
Those moves would create a combined 522,800 square feet of retail space – good enough to catapult the airport and its nearby mall to No. 16 on Business in Vancouver’s list of largest shopping centres in B.C., behind the 547,192-square-foot Brentwood Town Centre, which is No. 15. That, of course, assumes that other malls do not also increase in size.
Several other moves underscore that YVR executives are not taking their strong retail sales for granted.
One pioneering retail move came when YVR executives leased space to iStore for two boutiques, which not only sell Apple Corp. devices and accessories but also operate what will soon be four vending machines.
Travellers will be enticed to use the machines if they need ear buds or even a new iPad and arrive when the iStore is closed. Alternatively, they may believe that the store is too far a walk.
Regardless, they can put their credit card in the iStore-branded vending machine and watch their purchase drop from inside, much like the way chocolate bars fall inside conventional vending machines.
“We make sure that the retail mix and food and beverage services work with passenger flow,” YVR manager of retail and passenger service Chris Gilliland told Business in Vancouver. “That’s really important because we maximize the exposure to our commercial program.”
Unlike malls, the convention with most airports is to have master concessionaires, which operate sometimes dozens of stores or restaurants.
HMSHost Corp., which is a licensee for Tim Horton’s, Starbucks and Burger King, operates those restaurants at YVR.
SSP, meanwhile, operates everything from local bistros Vera’s Burger Shack and Monk McQueens to the international brand Camden Food Co. There is also Hudson Group, which operates stores that range from Hudson News newsstands to a Victoria’s Secret lingerie store.
YVR enters master concessionaire contracts largely for the convenience of not having to sign leases with each individual business.
Having more than one master concessionaire, however, spurs the competition that prompts better customer service.
Competition is not possible at the airport’s duty-free operations because federal government regulations prohibit multiple companies operating competing duty-free stores in the same airport.
“They will appoint only one duty-free licence per port,” Gilliland said. “That’s why we have World Duty Free Group [WDF] operate all 10 duty-free stores here at YVR.”
U.K.-based WDF’s Canadian CEO Freda Cheung told BIV that her duty-free company selected Vancouver’s airport to be its only Canadian presence because the airport is Canada’s gateway to Asia.
WDF opened its 10th duty-free store at YVR in June after spending an undisclosed amount to renovate 11,997 square feet of space.
Overall, WDF operates 56,080 square feet of duty-free space at YVR. That’s more duty-free space than any other North American airport except for JFK in New York.
“We have enjoyed very positive growth over the last couple years,” Cheung said. “With the new stores, we expect Vancouver airport to continue to maintain one of the top-three spends per passenger.” •
