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Kansas City International Airport: Gaining Speed on the Retail Runway

11/25/2019
With the busiest travel period of the year arriving, plenty of people will be traveling through KCI Airport over the next several days.

Kansas City International Airport

Thanksgiving is one of the busiest weeks for travel every year, with the Sunday after Thanksgiving pointed to as the single busiest day for commercial flights in the USA. While that number has been growing steadily, it’s hard to put a figure on the 2018 travel volume because of the massive weather disruptions last year.

In 2018, half of the scheduled flights out of KCI on the Sunday after Thanksgiving were canceled. In fact, that problem was endemic around the Midwest, with over 25% of the flights at Chicago O’Hare canceled during the same period.

Kansas City International Airport ParkingWith luck, the weather will be more cooperative this year. Major work is underway at KCI for a new, single-terminal, modern facility, but while the new airport will have all kinds of bells and whistles it won’t be able to do anything about an ice storm.

When the new terminal is complete, passengers will certainly have a lot more options available on how to spend time at KCI, and how to spend their money. Those options will be important, because there is a developing trend of American travelers spending more and more money every year at airports.

The Cushman & Wakefield Retail Valuation and Advisory group recently analyzed data comparing retailers based in transportation hubs and those in high-performing malls, and when measured on a sales per-square-foot basis, the transportation hub locations are the top performers.

Equally encouraging is a projection from research firm Statista that predicts sales in these transportation-based retail locations will increase 39.3% between now and 2023, which is when the new terminal is scheduled to open. For Kansas City, the new terminal will provide a platform to make substantial increases in retail revenue. Kansas City will not see a huge benefit from duty-free shopping, which is a substantial portion of airport retail business, but there will still be massive room for retail growth because KCI’s opportunities extend far beyond duty-free stores.

The disjointed nature of the current KCI terminals has prevented the airport from capturing the benefits that can be realized from the traffic volume that passes through the facility. Right now, KCI partitions the travelers in each terminal via multiple TSA checkpoints. Establishing one craft-beer lounge, for example, in each of three buildings would be a redundant exercise, and with traffic distributed so widely it is hard to hit the scale necessary to successfully operate the concept.

Kansas City International Airport RetailBut in the new terminal, all travelers will pass through the same areas, allowing these concepts to thrive. Having improved and vibrant dining options will be important, as half of all passengers spend money on food or drink when in an airport. Instead of isolated counters with limited selections that are restricted to serving only a handful of gates, KCI will have more intriguing, more exciting, and more enjoyable offerings for travelers. This will also help generate significantly more revenue.

As for other retail options, it’s hard to predict what will happen at KCI. One study has shown that 36.9% of all travel retail sales are fragrances and cosmetics, although those items tend to be staples of duty-free stores. But the trend of travelers spending money on themselves appears to be broad: only 7.1% of all sales were classified as gifts and electronics. Looking at those data points together, a reasonable argument can be made that purchases tend be driven by personal wants (such as fragrances and cosmetics) and they tend to be impulse purchases as opposed to necessities.

What is certain is the new KCI terminal will offer a much wider and more attractive range of retail options. It is encouraging that demand for these retail offerings already exists and indications are it will continue to grow.

To learn more about trends in travel-based retail, click here to read Cushman & Wakefield’s Five Fast Facts: Travel Retail

 

Image renderings source: Kansas City Aviation Department via www.buildkci.com

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