Population Statistic: Read. React. Repeat.
Sunday, July 06, 2008

Between enhanced security checkthrus and compounded flight delays, people are forced to spend more time in airports than ever before. Therefore, the stores and restaurants there are reaping the windfall from wait times, to the tune of $6.5 billion annually.

A big chunk of that is due to the inflation that comes with “airport prices”, right?

While some passengers balk at airport prices, Laura Samuels, director of corporate communications for transportation retailer Hudson Group, said that prices are not inflated at the airports. In an e-mail to CNNMoney.com, Samuels said they reflect the local “street prices” where the airport is located, “in some cases allowing a small percentage above to allow for additional handing/freight costs to airports.”

I wasn’t the only one to scoff at that claim. The retail model for airports is simple: You have a captive consumer that can’t afford the time or risk of going off-base for last-minute purchases. So naturally, the merchant within walking distance of the flight gate can name his/her price, to the tune of a healthy markup.

But is that still true? Some major airports started holding restaurants to street-price limits a couple of years ago, opting to create a true retail-mall experience. While flight passengers are still going to be the bulk of the business, I’d think eateries can still draw people from surrounding hotels and who are dropping off fliers, and thus have a solid secondary market to which to cater.

Not that that disguises the higher prices in a lot of restaurants lately, regardless of location. I’d guess that, when it comes to eats, the street prices have basically caught up to what used to be airport prices.

What about other retailers, like the newsstands, drugstores, and such? I don’t fly nearly enough to do my own survey of how much prices vary in and out of the airfield. I would guess, though, that items that have their suggested retail prices pre-stamped on them — magazines, books, etc. — sell for the regular price. Where the gouging opportunities exist are with unmarked items like bottled water, snacks, and apparel — not so coincidentally, the stuff that people killing time probably need most often.

by Costa Tsiokos, Sun 07/06/2008 04:47 PM
Category: Business
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