First Class Food—Pre-Flight

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Published October 21, 2011

| FOXBusiness

It’s true that airline travel isn’t what it used to be. Gone are the days of white-gloved stewardesses and donning your nicest hat before heading to the airport. Now fliers are lucky to get a bag of peanuts during their time in the sky. However, the scene on the ground tells a different story.

Walk through many major airports in the U.S. and travelers will find a few unexpected surprises, from celebrity-chef endorsed eateries, to full-service restaurants where travelers are encouraged to relax for a four-course meal before boarding their flight.

“We are seeing an overall mindset change about travel in the U.S.,” says Rick Blatstein, CEO of OTG Management, an airport restaurateur that recruits big names in fine dining to airports nationwide. “Previously airports treated customers as a captured audience, but they have found out that poor selection and high prices do not equal high sales.”

Blatstein, whose company is behind the April 2011 renovation of New York’s LaGuardia Airport’s terminal D, says that sales at the terminal’s two table-service restaurants and bar area are now 27% higher than traditional terminals at the top 50 airports around the country. The terminal’s restaurants include Bisoux, a partnership with the owners of iconic New York French bistros Pastis and Balthazar, and Crust, a Neapolitan-style pizzeria developed by New York baker Jim Lahey, owner of New York’s Sullivan St. Bakery.

OTG has similar fine dining establishments at New York’s John F. Kennedy International Airport, including steakhouse 5ive Steak, Italian restaurant AeroNuova and Jet Rock Bar & Grill at Ronald Reagan National Washington Airport. But East Coast travelers aren’t the only ones in for a treat.

At San Francisco International Airport, Director of Community Affairs Michael McCarron says that in the last five or six years, the airport has recruited higher-end eateries and bars that reflect San Francisco’s eclectic local cuisine.

“We want people to know they are in the San Francisco Bay area as soon as they get off the plane,” says McCarron.

The airport’s most popular table-service restaurants include local San Francisco names like Perry’s and Lark Creek Grill, both offering American fare of steaks and fish, at around $15-$20 per entrée. Although Lark Creek Grill just opened in April, McCarron says the idea of making the airport a destination for food and drink is nothing new. San Francisco airport first began its transition to fine dining 10 years ago when it opened a new terminal, and in a post- Sept. 11 world, it found that passengers were more eager to get through security, find their gate, and then relax over a nice meal.

“The whole dynamic has changed. Pre-security food stands weren’t doing well because security was the hassle people wanted to move through as quickly as possible. Combine that with the fact that most airlines don’t serve food anymore, and now every full-service restaurant we have is beating our projections.”

But not just any restaurant can succeed in an airport, McCarron warns. Each full-service eatery at the San Francisco airport went through a tough selection process: Up to 10 restaurants bid for one spot, and a “blue ribbon panel” of experts in the restaurant and travel industries make the final decisions on which eateries offer the best experience to travelers.

The only doubt left as to the success of the new restaurants was the economy, McCarron says. Although San Francisco’s airport saw traffic increase by 3% and 4% over the last two years, concerns over whether people would want to spend another $100 on dinner and drinks after having just paid $1,000 for their tickets remained.

“We wondered, ‘is the economy strong enough that people will want to spend money in these places?’ But give them a comfortable place where they can eat and do work and they will. It’s all about having the right options.”

According to a study of more than 1,000 U.S. travelers conducted earlier this year by airport technology company NCR Corporation, 57% of people would patronize a sit-down restaurant or bar after clearing security. And 38% of respondents report time is not an issue, saying they clear security with more than an hour to spare before their flight.

However, the study also reflected that 23% of travelers would be reluctant to partake in dining and entertainment options for fear of getting lost or missing their flight. But OTG’s Blatstein says his company even has an answer for that: At JFK and LaGuardia airports, travelers can now order food at their gate via iPads installed at every seat and have it delivered to their gate. 

But the flight is, of course, the main reason people are at an airport. At a certain point, does it matter how nice the restaurant is, or how fancy the technology? Frequent flyer Patrick Gray, president of consulting firm Prevoyance Group, flies as much as 150 days out of each year, and is pleased with recent improvements.

“I wish the situation were different, but realistically, I have no idea if the security line is going to take five minutes or an hour,” says Gray. “I leave myself two hours to make it through security and get to my gate, but when you breeze through, you’re left with an hour and a half to kill. I am certainly going to choose a nice full-service restaurant over a Styrofoam box that’s been sitting under a heat lamp for two days.”

Gray does a mix of international and domestic travel, and says in the past, international terminals offered a much better selection for food, drink and shopping. However, he says that in in the last three years, domestic terminals have now matched—if not surpassed—quality found in international terminals.

“This makes perfect sense,” says San Francisco’s McCarron. “Seventy-five percent of our traffic is domestic, and that’s the case for a lot of airports. You have to cater to your biggest audience, and I think a lot of airports realized they were missing the boat by leaving their nicest restaurants in the international terminals.”

Hospitality company Delaware North, which operates in 18 domestic airports nationwide, runs hundreds of full-service restaurants in airports’ domestic terminals. Vice President of Business Development Bob Stanton says one reason for the improved food selection in airports is the increased competition for spots. In the 1980s, airports contracted with one food vendor to bring them everything they needed: coffee, donuts, sandwiches, etc. But since the late 1990s, airports have been fragmenting their real estate and leasing to different companies, thus heating up the competition for diner’s dollars. 

“Twenty years ago, concession was 20% of an airport’s revenue, and today it’s closer to 50%. If you have one master concession that runs the whole airport, you’re not going to be able to charge as much rent if you had multiple companies competing for the same space,” says Stanton.

Stanton, whose company recently opened the Wolfgang Puck bistro and the Morimoto Skewers at the Los Angeles International Airport, says that companies competing for space at airports have to be savvy about the traveler they’re trying to reach. As baby boomers begin retiring from the work force, restaurants looking to catch the attention of a business traveler need to appeal to a younger generation.

“There is an evolution of who the passenger is,” says Stanton. 

But not only is the passenger evolving, the idea of what airports offer is evolving with them, says Paul McGinn, president of MarketPlace Development, the company that rents space to vendors at LaGuardia.

“When is the last time you got on a plane and were served something substantial to eat? Just as people have learned not to count on dinner being served on their flight, eventually they will learn to expect a quality dining experience at the airport,” says McGinn. “For companies like us, it’s terrific. As more airports improve their quality, the attitude is going to shift—‘Hey, wanna get to the airport? There should be something good we can eat.’”

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