Dallas/Fort Worth International Airport Terminal Development Program Concessions Opportunities

Transcription

1 Dallas/Fort Worth International Airport Terminal Development Program Concessions Opportunities March 9, 2010

2 Table of Contents Terminal Development Program Overview Passenger Demographics Passenger Comments Benefits and Costs of Operating in an Airport Environment Process for Concessions Request for Proposals Airport Concessions Disadvantaged d Business Enterprise (ACDBE) Overview Summary 2

3 Terminal Development Program Overview

4 Terminal Development Program DFW has launched plans to renovate its four legacy terminals with the Terminal Development Program (TDP). Renovations begin with Terminal A in early Terminal A renovations will be phased and will be completed by early 2014 Only 1/3 of the terminal will be closed at one time for renovations Terminals B, C and E renovations will follow in a phased schedule over several years in order to minimize passenger disruption. The vast majority of DFW gates will be open and available during the TDP project. 4

5 Future Customer Service Enhancements Passengers will enjoy significant improvements in the DFW experience. Easy-to-locate, more visible shops and restaurants Expanded, d reconfigured security checkpoints More self check-in options in ticketing areas Parking garage improvements 5 5

6 Terminal Development Program Terminals A, B, C and E were originally designed for the passenger of the 70 s. Terminals designed before need for: Post-9/11 security Passenger self check-in Upgraded shopping and dining Information technology and communication systems Replacement of major building systems sorely needed HVAC Electrical l Plumbing Lighting 6

7 Terminal Development Program The TDP is an investment in North Texas future. Improves infrastructure in order to meet customer expectations. Accommodates anticipated DFW-area population growth. Reduces DFW s environmental footprint. Makes DFW more competitive in the global marketplace. 7

8 Terminal Development Program DFW remains committed to inclusion in TDP opportunities, following its successful track record on previous projects. When Terminal D was built, MWBE firms earned 35% of all the construction work. In the past year alone, MWBEs earned $150 million in concessions sales at DFW. DFW will continue its highlysuccessful outreach efforts throughout every phase of the TDP in order to ensure access to opportunities. 8

9 Terminal Development Program Upon completion of the project, DFW will remain one of the most cost-efficient airports in the country. DFW plans to retain A or better bond ratings through the TDP. TDP will increase revenues through improved concessions, advertising and parking options for customers. TDP will create new efficiencies for the Airport and for airlines, lowering operating costs. 9

10 Terminal Development Program Overview The project is subject to final approval by DFW s airlines. The project will be staged in phases in coordination with airline stakeholders 10

11 Passenger Demographics

12 Terminal Development Program Overview The design will align with passenger flow Observation The nodes will provide multiple shopping and dining options with some soft seating and passenger information Soft seating/media opportunities 12

13 Passenger Segmentation by Terminal Future terminal sizing will be balanced to meet passenger demand Total Program Size Existing 2009 SF/1K Programmed 2020 SF/1K Terminal 09 Epax SF Epax 2020 Epax SF Epax Term A 7,043,000 46, ,500,000 85, Term B 3,815,000 36, ,900,000 32, Term C 7,706, , ,800, , Term E 2,935,000 42, ,500,000 36, Totals 21,499, , ,700, ,

14 Core Passenger Segments - Locals DFW has identified the following core passenger segments for local originating customers. Other segments 28% DreamWeavers 21% Second- generation Success 3% Prime Middle America 4% New Suburbia Families 17% America's Wealthiest 5% Urban Commuter Families 5% Small-town Success 7% Young Cosmopolitans 10% Source: Buxton CustomerID Profiles, September

15 Core Passenger Segments - Locals These top three segments comprise 48% of the local originating passengers. DREAM WEAVERS Well-off families with school age children, living an affluent, suburban version of the American dream. NEW SUBURBIA FAMILIES Young, affluent working couples with pre-school children concentrated in fast-growing, metro fringe communities. YOUNG COSMOPOLITANS Residents are young, single, college educated and earning upper-middle-class incomes as white-collar professionals, managers and executives living in luxury apartments and condos in fast growing cities. When they go shopping, they look for quality merchandise - no matter the price - at stores like Ann Taylor, Banana Republic, and Bloomingdale s. Source: Buxton CustomerID Profiles, September This is one of the top-ranked types for owning toys, books and video games. They maintain that price and functionality trump style when they purchase electronics and clothing at retailers like Target, Best Buy and Wal-Mart. As consumers, they patronize high-end stores like Bloomingdale s, J. Crew and Victoria s Secret. They re also big purchasers of all kinds of tech gear, including ipods, BlackBerry devices and Xbox consoles. 15

16 Core Passenger Segments Connecting DFW has identified the following core passenger segments for customers making a connection. Affluent Urban Professionals 2% Latino Nuevo 2% Other segments 31% Professional Urbanites 2% Status-conscious Consumers 2% Minority Metro Communities 3% America's Wealthiest 3% Dream Weavers 9% Stable Careers 6% Young Cosmopolitans 5% New Suburbia Families 8% Urban Commuter Families 7% Prime Middle America 7% Steadfast t Conservative 7% Small-town Success 6% Source: Buxton CustomerID Profiles, September

17 Core Passenger Segments Connecting In addition to the top three for originating, the connecting audience has three additional top segments. URBAN COMMUTER FAMILIES Upscale, college educated Baby Boomer families and couples living in comfortable, single detached homes in city neighborhoods on the metropolitan fringe. PRIME MIDDLE AMERICA A mix of young, upper-middle-class couples and families living in both small towns and mid-sized cities working in well paying white-collar and blue-collar jobs. g p g p y g j g STEADFAST CONSERVATIVES Home to high-school educated mature singles and couples living in middle-class urban blue-collar neighborhoods. They describe themselves as brandloyal shoppers who prefer to buy functional clothes over expensive designer labels, shopping at stores like Sears and J.C. Penney. Source: Buxton CustomerID Profiles, September Many are do-it-yourselfers who load up their SUVs and pickup p trucks with home improvement supplies from stores such as Lowe s, Home Depot and True Value Hardware. As consumers, they re likely to be brand loyal when they shop at favorite stores like J.C. Penney for clothes, Dick s Sporting Goods for outdoor gear and Jo-Ann for needlecrafts. 17

18 Terminal A Passenger demographics vary somewhat by terminal Heavy connecting traffic (62%) Large business population (63%) Mostly males (64%) Age 25 to 54 (68%) Household income: > $75K (50%) > $100K (30%) * DFW Survey, September Total sample of 219 (+/- 6.5%) 18

19 Terminal E Passenger demographics vary somewhat by terminal Heavy originating & destining traffic (86%) More leisure population (55%) More males (54%) Age 25 to 54 (64%) Household income: > $75K (60%) > $100K (38%) * DFW Survey, September Total sample of 177 (+/- 7.2%) 19

20 Passenger Comments

21 Passengers Comments What kinds of shops, restaurants t or services would you like to see at DFW Airport? We enjoy the restaurants, especially here in Dallas the Mexican restaurants, and we like to browse the Duty Free and any spa. Is there anything you d like to see here that currently you haven t seen? One thing I haven t seen is a luggage shop. What do you look for in a restaurant when you visit DFW? Very quick, efficient, professional service. 21

22 Passengers Comments What kinds of shops would you like to see at DFW Airport? I shop all the T-Shirt shops, and a foot massage place would be great. What things do you look for in a restaurant? I like when you can walk in and find low-calorie, green vegetables, fresh food things that have not been in a box forever. 22

23 Passengers Comments What do you look for in a restaurant that you re planning to visit here at the Airport? Good food, quick food, because you never know when you have to be at your next gate. 23

24 Passengers Comments Is there anything else that tyou look for, when you go to a restaurant? There are many kinds of beverages that have so much sugar, and I would prefer not so much sugar. 24

25 Passengers Comments What kinds of shops, restaurants t or services would you like to see at DFW Airport? When I go the Airport, I usually like to see some food choices, and I like to have multiple food choices. I don t often give myself a lot of time, so I want something that s fast and easy, and I like to find things that are healthy. 25

26 Passengers Comments When you go to a restaurant t here at the Airport, what do you look for? I would like to see restaurants that are faster, so that you could just grab a bite and just leave. 26

27 Meeting Passenger Brand Expectations Focus on a variety of local, regional and national brands DFW Airport is seeking Local and regional branded concepts Meets travelers expectations for a local experience Supports community based businesses Provides local economic development National branded concepts Reflects broad appeal to national passengers Provides inroads for national franchising Provides wider landscape from which to choose 27

28 Benefits and Costs of Operating in an Airport Environment

29 Benefits of Doing Business at DFW Airport DFW is the third-busiest airport in the world Passengers are a captive audience Operators can reach premium customers from throughout h t the United States Sales per square foot are 2 ½ times greater than in a street location 29

30 Costs and Risks of Operating in an Airport Same expectations as street-side locations, but with additional requirements Traditional Operating Costs Build-out costs Rent Employee costs Insurance Items Unique to an Airport Build-out costs 20% - 40% higher TSA Security requirements Product distribution O&M costs Off-hours operations Banking Airline gate utilization Annual surety bonds/deposits 30

31 Process for Concessions Request for Proposals

32 Process for Concessions Request for Proposals Planning Principles - Commercial Planning Still in Progress Current tprogress Situationali Terminal Optimal Layout Feasibility Solicitation i i Design and Diagnostics User Commercial Planning Analysis and Construction Analysis Demand Analysis And Concept Alternatives Selection Including Outreach 32

33 Concession Plan Update RFP Phasing Plan - Proposed RFP Timeline to Take 5 ½ Months Milestones Target Date Advertise (Outreach) April 2010 Release of RFP July 2010 Pre-Proposal Conference August 2010 Design/Build-out Review Conference August 2010 Questions and Clarification Deadline September 2010 Proposals Due September 2010 Proposals to Selection Committee October

34 Concession Plan Update RFP Phasing Plan Total Process Takes 16 Months Once RFP Received Milestones Target Date Selection Committee (Review/Initial Scoring) November 2010 Final Score (Consolidate Scores) November 2010 Interviews (Tentative) December 2010 Recommendations December 2010 Committee Meeting January 2011 Board Approval January 2011 Lease Execution February 2011 Design/Construction Phase (240 days) February

35 Airport Concessions Disadvantaged Business Enterprise (ACDBE) Overview Don O Bannon Vice President, Business Diversity & Development

36 ACDBE Program Overview Outline ACDBE /DBE/Programs Overview of ACDBE Program Application to DFW Certification Standards Personal Net Worth Personal Net Worth Business Ownership and Controls Goal Good Faith Efforts Joint Venture Guidance Local Preferences 36

37 ACDBE Program Overview ACDBE Program Program The ACDBE program governs the participation of airport concessionaire disadvantaged business enterprises (ACDBEs) in the concessions activities of airports receiving Federal financial assistance from the airport improvement program (AIP) of the Federal Aviation Administration (FAA). Airport Concession Disadvantaged Business Enterprise (ACDBE) A concession that is a for-profit small business concern that is a least 51 percent owned by one or more individuals who are both socially and economically disadvantaged or, in the case of a corporation, in which 51 percent of the stock is owned by one or more such individuals; and whose management and daily business operations are controlled by one or more of the socially and economically disadvantaged d d individuals who own it. 37

38 ACDBE Program Overview DBE Program Program The DBE program is a national program that is intended to remedy past and current discrimination against disadvantaged business enterprises, ensure a level playing field and foster equal opportunity in DOT assisted construction and professional service contracts. Disadvantaged Business Enterprise (DBE) A for-profit small business concern that is a least 51 percent owned by one or more individuals who are both socially and economically disadvantaged or, in the case of a corporation, in which 51 percent of the stock is owned by one or more such individuals; and whose management and daily business operations are controlled by one or more of the socially and economically disadvantaged d d individuals id who own it. 38

39 ACDBE Program Overview Overview of ACDBE Program March 22, 2005 USDOT issued 49 CFR, Part 23, participation by Disadvantaged Business Enterprises in Airport Concessions Pertains to concessions activities of airports receiving Federal financial assistance from FAA s airport improvement program (AIP) Addresses goal-setting, Personal Net Worth, business size standards, and counting ACDBE participation p by car rental companies. The regulations were effective April 21,

40 ACDBE Program Overview Application to DFW To whom does this regulation apply? Applies to airport that have received FAA financial assistance for airport development since January 1988, when the Department s airport concessions DBE rules first went into effect. 40

41 ACDBE Program Overview Certification Standards Business size (as of April 2009) ACDBE Part 23 Program Size Standard $52.47 million in gross receipts for most ACDBE firms $69.97 million for car rentals $1 billion in assets for banks 1,500 employees for pay phones 350 employees for automobile dealers ACDBE Personal Net Worth Two exclusions above, and third Assets encumbered or to be encumbered to obtain financing to enter or expand a concessions business at an airport 41

42 ACDBE Program Overview Personal Net Worth Personal Net Worth Previously not required from ACDBE s Individuals claiming social and economic disadvantage must provide Personal Net Worth. New Worth must not exceed $750,000 Exclusions apply for DBE and ACDBE 42

43 ACDBE Program Overview Evaluation of Personal Net Worth Evaluation of Personal Net Worth third exclusion for ACDBE applicants Can exclude up to $3 million of encumbered or to be encumbered assets Encumbered asset exceeding $3 million would count toward the Personal Net Worth calculation Still must not exceed $750k after third exclusion Applicant produce letters from a bank Show asset used as collateral for a loan Document build-out costs and other capital investment needed to begin or expand concession 43

44 ACDBE Program Overview Personal Net Worth Specific Rules Personal Net Worth Specific rules Adjust assets in community property states Spouses not required to complete Personal Net Worth Contingent liabilities don t reduce Personal Net Worth Retirement assets include present value, less early distribution penalties and taxes Must use SBA Personal Financial Statement 44

45 ACDBE Program Overview Business Ownership Requirements: 51% owned by socially and economically disadvantaged individual(s) () Real, substantial, and continuing ownership Real and substantial capital contributions to acquire ownership Expertise contribution to acquire ownership must be in a specialized field, specific to the type of work the firm performs. Individual with expertise must have significant financial investment in the firm 45

46 ACDBE Program Overview Business Control Must be an independent business Possess the power to direct or cause the direction of the firm s management Have overall understanding of and technical competence and experience in type of business Disadvantaged persons must possess required license or credential Certify for specific types of work disadvantage owners controls 46

47 ACDBE Program Overview Goal and Goal Setting The FAA has established through h the regulations a detailed d process to set a ACDBE goal for concessions. The proposed goal for the concessions program is 35%. DFW is required by the federal regulations to monitor and implement mechanisms to ensure compliance with the regulations. 47

48 ACDBE Program Overview Good Faith Efforts (e) (iv) The Administrative procedures applicable to contract goals in part 26, sections , apply with respect to concessions specific contract goals (g) You must apply the requirements of this section to DBE bidders/offerors for prime contracts. In determining whether a DBE bidder/offeror for a prime contract has met a contract goal, you count the work the DBE has committed to performing with its own forces as well as the work that it has committed to be performed by DBE subcontractors and DBE suppliers. 48

49 ACDBE Program Overview Joint Venture Guidance 49 CFR Part 23 Final ACDBE Rule issued March 22, 2005 ACDBE Joint Venture Guidance, 49 CFR, Part 23 issued July 17, 2008, Guidance does not implement new regulations or requirements, merely clarifies existing requirements Recipients must review existing Joint Venture Agreements (JVA) for compliance with requirements January Board OBA Lease Management Recommendations Seventeen (17) Lease Agreement; extensions subject to compliance review Overall Forty (40) Joint Venture Agreements were listed requiring compliance review 49

50 ACDBE Program Overview Local Preferences? Does the ACDBE program permit recipients to use local geographic preferences? No. DFW Airport must not use a local geographic preference. For purposes of this section, a local geographic preference is any requirement that gives an ACDBE located in one place (e.g., your local area) an advantage over ACDBEs from other places in obtaining business as, or with, a concession at your airport. 50

51 Summary

52 TDP Concessions Web Page dfwairport.com/tdp/concessions 52

53 Summary Opportunities will be available, but they will be phased over perhaps seven years and not created all at once Communication to local businesses and entrepreneurs is the key Airport businesses are rewarding but carry a risk The FAA has developed d guidelines that t Joint Ventures must follow Certification is required for ACDBE consideration 53

54 Dallas/Fort Worth International Airport Terminal Development Program Concessions Opportunities March 9, 2010