The Smart Traveler. Industry Best Prac/ces and Innova/ve Strategies on How Airports can Capitalize on the Mobile Revolu/on

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1 The Smart Traveler Industry Best Prac/ces and Innova/ve Strategies on How Airports can Capitalize on the Mobile Revolu/on Zach Varwig - - Faith Group, LLC Nicholas Poole - - SITA Derek McMillan - - The JW Group, Inc. Brandon Butler - - Edelman

2 Introduction Hypothesis Developing a traveler facing mobile applica2on that integrates different exis2ng airport technologies will increase passenger sa2sfac2on, improve airport efficiency, and create previously unrealized revenue opportuni2es. In order to support this hypothesis, this presenta/on/report will show macro level trends and industry background on mobile technology. Specific services and technology centered around smart devices that exist today will then be iden/fied. Based upon these trends and exis/ng technologies, revenue opportuni/es will be examined. Finally, the presenta/on/report will provide a data driven perspec/ve on how developing airport mobile technology should take precedence over other technology programs frequently implemented at airports today.

3 Current Macro- Economic Trends Effec/ng the Smart Device Industry INDUSTRY BACKGROUND

4 Industry Background Smartphone ownership has increased dras/cally in the past 3 years, with 56% of U.S. adults repor/ng ownership in May of 2013

5 Industry Background In 2012, when DFW developed a mobile applica/on, it was found that 85% of DFW travelers used a smartphone. In 2013, it was found that industry wide, 70% of travelers carry smart phones.

6 Industry Background Major US Airports with a Dedicated or Airport Managed App Dallas/Fort Worth Interna/onal Denver Interna/onal Minneapolis- St Paul Interna/onal Major US Airports without a Dedicated or Airport Managed App Hartsfield - Jackson Atlanta Interna/onal Chicago O'Hare Interna/onal Los Angeles Interna/onal John F Kennedy Interna/onal San Francisco Interna/onal McCarran Interna/onal Phoenix Sky Harbor Interna/onal George Bush Intercon/nental/Houston Charloee/Douglas Interna/onal Miami Interna/onal Orlando Interna/onal Newark Liberty Interna/onal Seaele- Tacoma Interna/onal Detroit Metropolitan Wayne County Philadelphia Interna/onal General Edward Lawrence Logan Interna/onal La Guardia Fort Lauderdale/Hollywood Interna/onal Washington Dulles Interna/onal Ronald Reagan Washington Na/onal Salt Lake City Interna/onal Chicago Midway Interna/onal Honolulu Interna/onal San Diego Interna/onal Tampa Interna/onal

Industry Leading Airport Applications Oslo Airport (OSL) - MyFlight tracking with push no/fica/ons, Trip planner to and from airport with bus and train

Worth Interna2onal (DFW) Flight Informa/on and Flight Tracking, Parking availability, loca/ons and rates, Restaurant and shopping informa/on, Searchable

wai/ng /me in security, shopping and ea/ng guide with user reviews and various kinds of interac/ve maps London Heathrow (LHR) Flight Arrival and departure

7 Industry Leading Airport Applications Oslo Airport (OSL) - MyFlight tracking with push no/fica/ons, Trip planner to and from airport with bus and train sta/ons, Web Camera showing overview of the departure hall, shopping and restaurants, Special offers, parking, taxi and rental car informa/on Dallas Fort Worth Interna2onal (DFW) Flight Informa/on and Flight Tracking, Parking availability, loca/ons and rates, Restaurant and shopping informa/on, Searchable content down to loca/ons only 5 minutes from travelers gates, Airport Guide Copenhagen Interna2onal Airport (CPH) Flight Times with update no/fica/ons, wai/ng /me in security, shopping and ea/ng guide with user reviews and various kinds of interac/ve maps London Heathrow (LHR) Flight Arrival and departure informa/on, Es/mated and actual runway and gate arrival /mes, flight plan informa/on, weather forecast, interac/ve terminal maps, security guide, restaurant lis/ngs

Existing Features and Functionality Based upon evalua/on of the North American Mobile App Market, the following features are available through airport managed or third- party applica/ons: Flight

8 Existing Features and Functionality Based upon evalua/on of the North American Mobile App Market, the following features are available through airport managed or third- party applica/ons: Flight Informa/on (Arrivals, Departure, Delays) with automa/c no/fica/ons on flight/gate changes Gate Informa/on and Loca/ons Parking Lot Availability Ground Transporta/on Op/ons Concessionaire Lis/ng, Loca/ons and User Ra/ngs Baggage Claim Loca/ons Local Weather Condi/ons Airline Informa/on Airport Feedback

9 Technology Briefs and Real World Examples of Applica/ons Already Helping The Modern Day Traveler outside of the Airport Space EXISTING MOBILE TECHNOLOGIES

Web- Based Meal Delivery The Technology: Order food for pick up or gate delivery, directly from a traveler s mobile phone before arriving at an airport, saving /me for both the food provider and the

10 Web- Based Meal Delivery The Technology: Order food for pick up or gate delivery, directly from a traveler s mobile phone before arriving at an airport, saving /me for both the food provider and the traveler. Example: HMSHost, a leading Restaurateur in the airport industry, has developed and implemented B4 You Board, a mobile applica/on that allows you to order your food to go when you show up at the airport, running to the gate, or a simply sinng at the gate wai/ng for your plane. It gives passengers the ability to order food proac/vely, an/cipa/ng possible flight delays, and in most cases, hunger!

Indoor WayMinding The Service: Indoor posi/oning technology using exis/ng Wi- Fi infrastructure provides turn by turn Blue Dot naviga/on inside of a facility.

11 Indoor WayMinding The Service: Indoor posi/oning technology using exis/ng Wi- Fi infrastructure provides turn by turn Blue Dot naviga/on inside of a facility. Example: As Google and Apple baele for outdoor applica/ons, other lesser known technology providers like Meridian and Wifarer are deploying mobile plaporms that allow users to navigate the area that surrounds them. The indoor posi/oning technology already deployed in Hospitals, Stadiums, Airports, and other large venues provides not only direc/ons in these modern day labyrinths, but rich content descrip/ons along the way.

12 Queue Time Monitoring The Service: Real /me queue analy/cs, gathering and displaying up to the minute wait /mes for any queuing area. Example: Mul/ple technologies exist for gathering this informa/on, the two frontrunners being Bluetooth or Video Analy/cs. Oslo Interna/onal Airport, using Bluetooth technology, ac/vely displays their security wait /mes for all travelers. Washington Dulles Interna/onal, using video analy/cs, also displays up to the minute wait /mes for both of their checkpoints. Both technologies allow passengers to make a data driven and informed decision to improve their travel experience.

13 Parking Availability

Parking System BeneMits The Service: Parking management and reserva/on technology Example: Sheidt & Bachmann, displayed above, has developed a parking reserva/on

14 Parking System BeneMits The Service: Parking management and reserva/on technology Example: Sheidt & Bachmann, displayed above, has developed a parking reserva/on system, allowing travelers to pre- register a spot at a garage. This eliminates stress regarding parking availability, and increases traffic to reserva/on- enabled garages.

Live Airport Feedback The Service: A live tracking feedback portal that allows airport users to submit comments, ques/ons, and observa/ons directly to the airport operator, and receive a response.

15 Live Airport Feedback The Service: A live tracking feedback portal that allows airport users to submit comments, ques/ons, and observa/ons directly to the airport operator, and receive a response. Example: Many airports today have a web- portal or sugges/on box that allows passengers to report their experiences, good or bad, to the airport. Twieer, Facebook and many other social media mediums also provide pos/ng boards and feedback opportuni/es for travelers. Furthermore, technology companies like Cartegraph use GPS to mark down maintenance and service requests, providing an interac/ve map of ongoing issues at the airport. This is currently an applica/on used internally in most applica/ons, and has been op/mized for mobile plaporms.

Example: Almost common place, wayfinding and traffic informa/on has become second nature

16 Surrounding TrafMic The Service: Surrounding Traffic no/fica/ons and monitoring, allowing travelers to visualize total /me of travel from their door to the airport. Example: Almost common place, wayfinding and traffic informa/on has become second nature informa/on to smart device users. Google Maps and Apple Maps both display live traffic informa/on to users for free.

Bag Tracking Track Bag on mobile device using Sita Bag Journey The Service: Live baggage loca/on monitoring Example: SITA, using the same principles as FedEx or UPS when package tracking, allows

17 Bag Tracking Track Bag on mobile device using Sita Bag Journey The Service: Live baggage loca/on monitoring Example: SITA, using the same principles as FedEx or UPS when package tracking, allows travelers to get live updates regarding baggage loca/on. Travelers can now follow their bag from check- in to baggage claim, ensuring before they arrive at the carousel that their bags have reached the final des/na/on. If bags have not made it to the des/na/on, passengers have more informa/on regarding possible mishaps and baggage loca/on.

Transportation The Service: One tap to order a taxi/car to your loca/on, without having to make a phone call, and pay using an electronic, rather than cash, transac/on.

18 Transportation The Service: One tap to order a taxi/car to your loca/on, without having to make a phone call, and pay using an electronic, rather than cash, transac/on. Example: Uber, a new service now deployed in 35 ci/es, allows users to request a ride using the applica/on and get picked up within minutes. With GPS enabled, you can easily set your pickup loca/on on the map, even if you don t know your exact address (or airport loca/on). It even allows you to track your cars progress on a map, allowing you to plan for your other things rather than swea/ng about one more leg of your avia/on journey.

19 Interlude - What s it all worth? All of these technologies are great, sounds like people have all the bases covered, what s the problem? Research Team: None of the techs, in the U.S., are integrated TOGETHER! Any airport user wishing to u/lize these useful, /me saving technologies would have to download them all individually, and then figure out a way to u/lize them all effec/vely and simultaneously. Research Team: Our take, this almost sounds more stressful than having nothing at all. Its great to get someone to download your applica/on, but the problem comes in genng them to con/nue using it. Research Team: As we have displayed, there are many different technologies currently available that can benefit the avia/on industry, yet no organiza/on has taken the ini/a/ve to bring them together in a user- friendly environment. We ve established the problem, but lets ask the big ques/on: Why should airport operators spend the /me and invest the capital to develop and integrate a mobile applica/on?

20 Innova/ve Strategies on How Operators could Increase Overall Revenue using a Mobile Applica/on and an es/mated Cost of Development REVENUE GENERATION

21 Broad Advertising 18% of travelers have a household income of $100,000+, compared with the American average of 10%. As many airport managers know, this increased earning demographic garners higher adver/sing rates as Airports engage a higher spending bracket of customers. Furthermore, Smartphone owners, on average, are also part of a higher economic bracket, mul/plying the chance of top earners and spenders viewing adver/sements through avia/on. Research Team: Mobile Adver/sing provides the greatest bang for the airport s buck, as there virtually no costs associated with running or switching a far reaching and user relevant adver/sement.

In- Facility Advertising In addi/on to adver/sements for business exterior to the Airport, tenants within the facility will have the ability to adver/se their services in a variety of ways.

22 In- Facility Advertising In addi/on to adver/sements for business exterior to the Airport, tenants within the facility will have the ability to adver/se their services in a variety of ways. One technique is the use of digital coupons and discounts for app users only, displayed on a digital map, available to travelers who simply click on the tenant loca/on and present their phone to the cashier. Another technique u/lizes loca/on based push no/fica/ons that provide context relevant adver/sements and deals depending on a travelers loca/on within the facility. For example, users entering the terminal would have an adver/sement or coupon for a business that is nearby, or simply landside, and then using loca/on based analy/cs, this adver/sement would switch when they moved beyond security to a more relevant business to their loca/on.

23 Passenger Analytics Through the use of a unified mobile app, Airports can begin to get a glimpse of what their travelers are really looking for. Search and Direc/onal analy/cs give airports not only an idea of whether services they currently offer are mee/ng the passenger demands, or whether they need to start a new product offering that will generate sales off of a previously un- iden/fied source. Furthermore, direc/onal analy/cs provide airports a glimpse into not only what passengers are looking for, but what is hardest to find with exis/ng signage and direc/ons.

their retail spending. Passengers who reported that they are disappointed with the airport only spend on average $14.12 during their visit.

24 The Value of Happiness Simply Put, People Spend More When They Are Happy! There s Proof: JD Power found in their 2010 North America Airport Sa/sfac/on Survey, that when passengers reported high levels of sa/sfac/on with an airport, they tended to increase their retail spending. Passengers who reported that they are disappointed with the airport only spend on average $14.12 during their visit. However, passengers who report being delighted spend an average of $20.55 at the facility, an increase of 45%! Research Team: High Stress from Low Amounts of Informa/on due to inaccurate and disparate signage = Lower spending in your facility. Airport Applica/on providing one loca/on for facility informa/on = Higher Spending in your facility.

Parking Revenue Providing greater access to parking data, along with the ability to reserve a spot from your phone, will increase passenger traffic to airport owned parking,

25 Parking Revenue Providing greater access to parking data, along with the ability to reserve a spot from your phone, will increase passenger traffic to airport owned parking, due to the availability of ac/onable data. One of the primary revenue streams for airports, even an increase of 1% at a large hub airport would result in $500,000 in revenue!

26 The Cost The big ques/on always is, what will it cost? For sanity s sake, we will cost out the development of an integrated mobile applica/on, assuming airports have and will use the aforemen/oned exis/ng technologies. Mul/ple applica/on developers quoted for the work, and returned a range of $300,000- $500,000 for ini/al deployment with mul/ple custom integra/ons Below is a cost breakdown of recent programs completed at mid- sized (10-30 million passengers) airports: System Development Cost Local Area Network $2,500,000 Flight Informa/on Display $700,000 Camera System Deployment $10,000,000 GIS Implementa/on/ Refinement $500,000 Website Re- design $188,000 Mobile Applica/on $400,000 Research Team: All of these technology items are implemented in airports today, all without the revenue genera/on and traveler experience improvement poten/al that a mobile applica/on provides. Furthermore, axer ini/al deployment, applica/on content is the only opera/ons and maintenance requirement, resul/ng in at most, a 1 FTE increase.

27 Conclusion Research Team: The one ques/on that we haven t answered is: Why don t more North American airports have their own mobile applica/on? We hope that axer research reports like this one and other posi/ve feedback is gathered from the small amount of exis/ng applica/ons, airport operators will be more apt to develop an airport owned applica/on. Based upon industry trends accelera/ng the mobile revolu/on exis/ng technology programs, revenue genera/ng opportuni/es and total applica/on development cost, this research group s/ll supports the hypothesis: Developing a traveler facing mobile applica2on that integrates different exis2ng airport technologies will increase passenger sa2sfac2on, improve airport efficiency, and create previously unrealized revenue opportuni2es.

28 We hope you enjoyed our presenta/on! THANK YOU

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