Follow along with the presentation by scanning the QR Code 1 2022 Concessions Program
Outreach Session 1
Food & Beverage and Retail
In Person:
Monday, April 25, 2022
Tuesday, April 26, 2022
Virtual:
Monday, May 2, 2022
Tuesday, May 3, 2022
Wednesday, May 4, 2022
Program Agenda
Part I – Airport, Market & Concessions Program Overview • Airport & Market Overview
• Passenger Demographics
• Concessions Program Information
Part II – Doing Business at the Airport
• Airport vs. Street: Business and Operational Differences • Airport Concession Disadvantaged Business Enterprise (ACDBE Program) Part III – Upcoming Schedule
• Notable Dates (subject to change)
Part IV – Question & Answer
• Question & Answer
3 Part I
Airport, Market & Concessions Program Overview
4 Airport Vision Statement
Be an exemplary regional transportation
hub that provides access to the world
Airport Mission Statement
Provide safe, sustainable, and secure
facilities that meet the transportation
needs of Central California while enabling
regional economic growth and providing
excellent service
5 • FAT offers direct flights
to 16 airports including five
international mega-hubs
(ORD, SFO, LAX, DFW , SEA)
• Closest commercial service
airport to three national parks
• Nearest major commercial
airports are several hours away
in driving time
• “FATforward” multi-year airport
expansion launched in 2020
including:
• New four-level parking garage
• New Terminal Wing
• Expanded TSA Security Checkpoint
• New International Arrivals Area
Airport & Market Overview
6 • FAT draws most of its
passengers from the Central
Valley’s six county area that
includes Fresno, Madera,
Mariposa, Merced, Kings, and
Tulare counties
• The Central Valley’s six county
area has a population of over
2 million
• From 2000 to 2020, the
Central Valley’s population
grew by 26%
Airport & Market Overview
Passenger Area of Residence
7 Source: Fresno International Airport 2019 Concessions Preference Survey Airport & Market Overview
• The Central Valley six-county
area produced nearly $90 billion
in gross domestic product (GDP)
in 2018 -- greater than the GDP
of 13 states
• The six-county area outpaces
the nation in overall economic
growth
• From 2001 to 2019, the six-county
area’s combined real GDP grew
67% (2.9% annually), while the
U.S. real GDP grew only 44%
(2% annually)
8 Source: U.S. Census Bureau
Airport & Market Overview
Historical Enplanement Trends
• From 2000 through 2019, total
enplanements grew at an average of
3.5% annually
• The last 10 years show a high
average annual growth rate of 6.1%,
largely due to new international
service to Mexico
• Enplanements grew 15% in 2018 and
12% in 2019, reaching 985K in ‘19
• In 2020, enplanements decreased by
nearly 50% due to the COVID-19
pandemic
Economic
Recession &
Terrorist Attacks
COVID-19 &
Economic
Recession
Great
Recession
0 200
400
600
800
1,000
1,200
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Enplanements in Thousands
Calendar Year
FAT Annual Enplanements
Domestic International
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Calendar Year
Annual Change
Sources: FAT records for actual EP for 2016-2019; BTS T-100 for 2003-2015; and FAA ACAIS for 2000-2002.
9 Airport & Market Overview
COVID-19 Enplanement Recovery
• Enplanements at FAT bottomed out
at -93% to 2019 levels in April 2020
• Enplanement levels have recovered
rapidly, surpassing 2019 levels
starting in May 2021
• Monthly enplanements remained
at or above 2019 levels throughout
the second half of 2021
Source: FAT records for actual EP for 2019-2021
10 Airport & Market Overview
COVID-19 Enplanement Recovery
• Enplanement recovery at FAT has significantly outperformed recovery compared to all US Airports
Sources: FAT records for actual EP for 2020-2021; Transportation Security Administration website for US Airport passenger throughput data (www.tsa.gov/coronavirus/passenger-throughput)
11 Airport & Market Overview
FAT Enplanement Forecast
• Annual enplanements, which decreased nearly 50% to ~496,000 in 2020, are projected to surpass 2019 levels in 2022, and reach over 1.4 million (nearly 50% above 2019 levels) by 2032
• The forecast average annual growth rate from 2020 to 2032 is 11.5% 12 Passenger Data & Current Concessions
Program Overview
13 Passenger Demographics
• The FAT passenger is primarily
traveling for leisure purposes,
which has factored in the
resiliency of the airport during
the COVID-19 pandemic
• Approximately half of FAT
passengers are infrequent
users of the airport (and
infrequent fliers generally)
How many times in the last 12 months did you fly…
Trip Purpose
14 Source: Fresno International Airport 2019 Concessions Preference Survey • Over half of the Fresno
passenger base consists of
Millennial or Gen Z age
customers
• The vast majority (71%) of FAT
passengers have between 1-2
hours of dwell time (waiting to
board their flight) in the airport
Passenger Demographics
Age Range
Dwell Time
15 Source: Fresno International Airport 2019 Concessions Preference Survey • Passengers were surveyed in 2019 to provide feedback on concessions preferences and purchasing behavior
Passenger Preferences & Purchasing Behavior
Did you make a purchase?
RetailFood & Beverage
16 Source: Fresno International Airport 2019 Concessions Preference Survey Passenger Preferences & Purchasing Behavior
Based on your travel situation today:
From where would you most likely make a purchase at the airport? 17 Source: Fresno International Airport 2019 Concessions Preference Survey • Current concessions program
consists of six units
• Three (3) Food & Beverage
units:
• John Muir Tavern
• Starbucks (2)
• Approximately 3,300
Square Feet (SF)
• Three (3) Travel Retail units:
• Hudson News (3)
• Approximately 3,100 SF
Concessions Program Information
18 • Gross Sales grew at a Compound Annual Growth Rate (CAGR) of 6.2% from 2016 - 2019
• Gross Sales (92%) and Sales Per Enplanement (94%) have recovered to near pre-pandemic (2019) levels
$4.17 $4.39 $4.88 $5.20
$1.62
$3.80
$2.33 $2.31
$2.57 $3.09
$1.77
$3.85
2016 2017 2018 2019 2020 2021
Gross Sales by Category (in millions)*
Food & Beverage Retail
Concessions Program Information
$5.42 $5.74 $5.55 $5.27
$3.24 $3.90
$3.04 $3.02 $2.92 $3.13
$3.56
$3.96
2016 2017 2018 2019 2020 2021
Sales Per Enplanement by Category*
Food & Beverage Retail
19 $7.65 $7.86$8.40$8.29
* Food & Beverage sales in 2021 were impacted by the closing of one unit and reduced operating hours Part II
Doing Business At The Airport
20 Airport vs. Street: Business & Operational Differences • The Airport is open 365 days per year
• Passenger traffic varies throughout the
day, the year, and within various areas
of the facility
• Passengers are here to travel rather
than shop or eat
• Concessions must operate at least 22-
24 hours per day, with no exceptions
• Deliveries must be scheduled and
screened
• Employees must be badged
21 • Typical business terms: 7 to 10 Years of
agreement length based on Category
• Generally, rent at the Airport is greater
than typical street rent:
• Percentage of Gross Sales
• Annual Adjustments
• Security Deposit equal to 3 Months of
rent
• Required Mid-Term Refurbishment
• Street Pricing Requirements
Airport vs. Street: Business & Operational Differences
22 Airport vs. Street: Business & Operational Differences • Terminals have periods of intense
activity followed by periods of
relative calm
• Concessionaires must be equipped
to handle demand during the peaks
• Achieve a large percentage of sales
during peaks
• Significant impacts on staffing levels
and inventory management
23 Source: Fresno International Airport; OAG Data
• Extended hours of operations to
accommodate flight delays and flight
cancellations
• The airport is not only affected by local
weather but also by weather in other parts
of the country
• Existing and future security requirements
• May impact operating costs
• Comply with required service and
operational performance standards
• Comply with all specifications outlined in
Tenant Handbook
Airport vs. Street: Business & Operational Differences
24 • Typically, concessions spaces in
Airports are smaller than the same
use would occupy on the street
• Building concession units in an
airport environment requires high
capital investment
• Average Build Out Costs per
Square Foot
• Food Service: $1000+
• Retail: $600+
Airport vs. Street: Business & Operational Differences
25 Airport vs. Street: Business & Operational Differences Security Requirements
• All employees working in a secure
area must be badged
• 10-year background check
• FBI fingerprint check
• 2 to 6 weeks to conduct background
check and issue badge
• Replacing a sick, terminated
employee may require extra staffing
and time
• Employee turnover can be expensive
and frequent
26 Airport vs. Street: Business & Operational Differences • Operating and Maintenance expenses can be
typically 20% to 30% higher than comparable
non-airport locations
• Employee Badging and Parking
• Marketing Fees
• Receiving and Distribution
• Storage Space and Office Rental
• Utilities & Common Maintenance Fees
• Janitorial, Trash, and Grease Maintenance
• Insurance Requirements
• Business Licenses
27 Airport vs. Street: Business & Operational Differences Options for Participating: Solo, Join a Team
or Form a Team
• If you believe you have the right concept for the
Airport, there are several ways to submit a
proposal
• If you have the financial capacity to build and
operate, you can submit directly
• If you believe that you need to partner up to
achieve your goals, there are options:
• Joint Venture – A partnership between two or
more companies to form a new entity that can
deliver the required results to the Airport
• Typically, this is done between a Prime Operator
and at least one ACDBE partner
• Sublease - If there is a package of spaces
available, you can partner with another company
to agree to sub-lease one or more spaces from
that company if they are the successful bidder
28 You’ve decided that you want to embrace the
differences and challenges and open a location in
the Airport! The rewards can be great!
• High sales volumes
• Greater realized profits at the end of the year
• Exposure of your brand to hundreds of thousands
of people annually
• Ability to market your brand outside of your home
market
• “If you can make it here, you can make it
anywhere”
29 Airport vs. Street: Business & Operational Differences Part II
Airport Concessions Disadvantaged Business Enterprise
(ACDBE) Program
30 Airport Concession Disadvantaged Business Enterprise (ACDBE) Program
Airport Concessions Disadvantaged Business Enterprise
U.S. Department of Transportation 49 CFR Part 23
• ACDBE program is regulated by U.S. Department of Transportation (USDOT) under Title 49 Code of Federal Regulations Part 23.
• Create a level playing field on which ACDBEs can compete fairly for opportunities in concessions.
• Ensure the ACDBE program is narrowly tailored in accordance with applicable law.
• Help remove barriers to the participation of ACDBEs in opportunities for concessions at airports.
• Ensure that only firms that fully meet eligibility standards are permitted to participate as ACDBEs.
31 Airport Concession Disadvantaged Business Enterprise (ACDBE) Program
To be eligible for ACDBE certification, as defined in USDOT 49 CFR Part 23:
• Must be at least 51% owned and controlled by one or more socially and economically disadvantaged individual – owner(s) must control the firm’s management and daily operations.
• Must be a U.S. citizen and legally considered to be a disadvantaged minority as defined by the SBA, i.e., African American, Hispanic American, Native American, Asian-Pacific American, Subcontinent Asian American, or Woman.
• Personal Net Worth (PNW) cannot exceed $1,320,000, excluding the equity in the primary residence and business.
• Gross receipts cannot exceed $ 56,420,000 averaged over 3 years. 32 Presumed “Socially Disadvantaged Individuals”:
• Black Americans
• Hispanic Americans
• Native Americans/Alaska Natives
• Asian-Pacific Americans
• Subcontinent Asian Americans
• Women
• Any other group classified as disadvantaged by the SBA in the future Airport Concession Disadvantaged Business Enterprise
(ACDBE) Program
33 Airport Concession Disadvantaged Business Enterprise (ACDBE) Program
34 ACDBE Participation Goal
• 13% of total concessions gross receipts
• ACDBE goals are calculated by the Airport and approved by the FAA • Goals are updated every three years
Airport Concession Disadvantaged
Business Enterprise (ACDBE) Program
35 • Out of state applicants must be
certified in their state first before
getting certified in California
• All out-of-state applications must
be filed and certified at the
Sacramento location of the
California Department of
Transportation (CALTRANS)
List of Unified Certification
Program Agencies
List of Unified Certification
Program Agencies
Airport Concession Disadvantaged Business Enterprise
(ACDBE) Program
36 • First time applicants for DBE certification must complete and submit this certification application and related material to the certifying agency in your home state and participate in an on-site interview conducted by that agency. If you fail to submit the required documents, your application may be delayed and/or denied. Firms already certified as a DBE do not have to complete this form but may be asked by certifying agencies outside of your home state to provide a copy of your initial application form, supporting documents, and any other information you submitted to your home state to obtain certification or to any other state related to your certification. • The U.S Department of Transportation does not review DBE applications. If you have questions about where to send your DBE application package, please contact the state transportation agency in the state in which you want to apply for.
Airport Concession Disadvantaged Business Enterprise
(ACDBE) Program
37 Points of Consideration
• Statewide ACDBE certification
• UCP does not have a reciprocal certification with local agencies for ACDBE certification
• Must be certified in “home state” before submitting ACDBE certification in California
• Up to 90 days for staff review and processing of a new ACDBE application plus 60 days for out of state applications
• If the 51% ownership is made up of 2 or more ACDBE owners, each owner must complete application page submit “ownership” page of application as well as financial documents, i.e. tax return and personal net worth Airport Concession Disadvantaged Business Enterprise
(ACDBE) Program
38 Airport ACDBE Office Contact Information:
Olustee Smith
DBE/Small Business Coordinator
[email protected]
559-621-7036
DBE Uniform Certification Application (English)
Airport Concession Disadvantaged Business Enterprise
(ACDBE) Program
39 Part III
Upcoming Schedule
40 • Outreach Event dates (April 25-26 and May 2-4 2022) • RFP/Solicitation Anticipated Release Date (June 2022) • Pre-Proposal Conference (July 2022)
• Deadline for Questions (August 2022)
• Proposal Due Date (September 2022)
• Solicitation Review Process (September – October 2022) • Anticipated Selection/Award (November 2022)
Notable Upcoming Dates (subject to change)
41 Part IV
Question & Answer
42 Thank you!
FlyFresno.com
43