THE NOBLE CHOICE. Johnnie Walker Blue Label King George V Edition
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1 THE NOBLE CHOICE Johnnie Walker Blue Label King George V Edition The JOHNNIE WALKER, BLUE LABEL, KING GEORGE V words, the striding figure device and associated logos are trade marks Diageo DRINK RESPONSIBLY
2 April 2007 AIRPORT PROFILE Barbados Commercial revenues take priority at Grantley Adams As CEO of Grantley Adams International Airport, Leon Romero is charged with cementing the airport s place as one of the principal gateways to the Caribbean. Chief among his tasks is to raise the proportion of company revenue from commercial activities, which today sits at just 12%. Dermot Davitt reports. Lofty ambition: CEO Leon Romero plans to make Grantley Adams International an example of airport best practice In global terms, Grantley Adams International Airport (GAIA) is a small airport, serving 2.3 million passengers last year. But it s an airport with big ambitions: Barbados aims to become the destination of choice for high-end Caribbean tourism, and the airport is central to its tourism drive. Not only that, but the airport s management wants Grantley Adams to be seen as an example of airport best practice, not just in the Caribbean but worldwide too. Leon Romero, CEO of GAIA Inc, is the man entrusted with achieving those heady ambitions. He s been in the role less than two years, having joined from Cheddi Jagan Airport Corp in Guyana, where he oversaw the transition from government department to airport authority; but in that short time GAIA has seen some remarkable changes. A major expansion of the main passenger terminal was completed in April last year, adding some 70,000sq ft of space to the existing 200,000sq ft and transforming Grantley Adams into a bright, modern gateway, one in which Barbadians take considerable pride. From 55 check-in counters, there are now 71; inbound immigration points now number 18, up from 14 previously, there are 12 Customs points, seven more than before the project began in 2003; and the Arrivals area has more than doubled in area to 31,000sq ft. But the signature difference between the old Grantley Adams Airport and today s version lies in the Departures area, and critically in the quality and breadth of the new commercial concessions, most of which opened earlier this year. We have tripled the space available for retail concessions and we now have 16 shops and seven food & beverage outlets, says Romero. We ve also moved from an offer that was dominated by liquor and fragrances to one that is more rounded, with fashion, accessories, luggage, jewellery and watches adding to the attraction for the traveller. It reflects Barbados status as a top-end destination. And the work isn t finished yet. An RFP process for an advertising concession that will boost the airport s income is under way. On a darker note, work on three food & beverage outlets two airside and one landside has yet The Moodie Report 105
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4 April 2007 AIRPORT PROFILE Barbados Head to head: Romero defends the airport s policy of allowing competing concessionaires in liquor. Caribbean ARI (left) competes head-on with Refinery Ltd (right) to be completed, and several retail stores have yet to open, leaving a gaping hole at the entrance to the concessions area airside, just where passengers emerge through security. It wasn t intended to have a staggered opening to the stores, says Romero, but with 23 concessions due to come into play it s not easy to ensure every retailer works at the same pace. Not all got their plans in on time, and there are issues of safety and standards that those plans have to meet. But we don t think it will have a detrimental effect on the concessions programme. That programme will provide a major income stream for the airport in the years ahead, from what has traditionally been a low base. The passenger service charge Barbados imposes accounts for as much as 50% of GAIA s income, followed by 23% from landing fees. Commercial concessions have provided just 11 12% of revenue at least until now. Because the retail concessions programme is only beginning we won t see the full effect for a while, but I expect an increase of % in commercial revenues to us with the new stores. Increasing non-aeronautical revenues is important to our growth strategy. It s already worked with the introduction of new car parking systems, which were introduced earlier, and retail will be no different. Caribbean ARI the joint venture between Caribbean Airways and Aer Rianta International is the biggest retailer, with six concessions (two are combined to make a total of five stores), while Duty Free Caribbean operates two stores in Departures and one in Arrivals. Other local and regional retailers make up the balance of the retail concessions. In awarding the concessions last year (five years for retail, ten for food & beverage contracts), GAIA looked at the proposed investment from retailers in the stores, plus their track record and ability to operate the business effectively. But in almost every case the concession went to the highest bidder, says Romero, who is delighted with the quality of the retailers on parade at Grantley Adams. If you take the Caribbean ARI bid, their projections for the business were very strong, he says. But beyond that the partnership clearly benefits from ARI s experience, and they bring with them a real influence among the world s best brands the brands we want to showcase at our airport. Having a company like ARI here puts the global duty free spotlight on Barbados. When the concessions plan was drawn up the airport made clear its intentions to award exclusivity to one retailer in each category except for liquor. Under the original tender Caribbean ARI and local group Refinery Ltd were awarded liquor concessions, and since then the government s Department of Agriculture has added a third store. Romero defends the decision to allow competing liquor concessions. By and large we have tried not to mix the The Moodie Report 107
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6 April 2007 AIRPORT PROFILE Barbados Total passengers at Grantley Adams International Airport * Millions of passengers 2.5 2,366,516 2,328,526 2,360,069 2,130,333 2,030, ,907,381 1,959,309 1,996,167 2,026,715 1,728, *Arrivals + departures + transit passengers Source: Grantley Adams International Airport product categories and have competing concessions, he says. But liquor is the most important category here. It attracted the most bids of any concession under the RFP, plus it s one of the categories that helps to promote Barbados. Some 60% of sales are of local rum brands, which makes it very important for us. So we allowed more than one retailer for this concession, and we don t think it will lead to much cannibalisation. Liquor, of course, is the category most under threat from the new aviation security rules being introduced worldwide. From the Caribbean, passengers transiting within the US have been hardest hit, with high levels of confiscations at hubs such as Miami International. Security is a challenge for us today, says Romero. We have had people complaining of confiscations at US airports, but as yet we haven t heard that it s a major problem in the UK or other countries on flights from here. We need to build awareness of the issue. GAIA faces other challenges too, not least in making the transition from government department to self-sustaining commercial entity. The GAIA Transfer of Management and Vesting of Assets Act 2003 transferred all rights and responsibilities for the running of the commercial operations of the airport to the company. Having a company like ARI here puts the global duty free spotlight on Barbados Although it remains 100% owned by the government a partial privatisation is planned, but it is still some years away GAIA is charged with paying its way. That puts pressure on management to deliver results, but it also brings cultural challenges within the company. Romero says: A large percentage of the staff came over from the government service. Now that we have made the transition to the new company, with fresh commercial thinking, we have to take the staff with us. A further challenge, one we share with other airports, is to develop a strong culture of safety and security. The airport has had good reviews since the structure of the business changed, and the new terminal opened, but we aren t satisfied yet. We can make improvements to our systems, our training and our customer service, and we re constantly assessing our own performance. The challenges extend to commercial activities too. With a growing emphasis on retail revenues, the airport intends to work with its tenants to drive footfall and penetration where it can. We can create programmes to advertise the shopping on offer at the airport along with our retailers, says Romero. It s all about capturing more spend. We also need to ask how we can improve the business in the off-peak months. The Moodie Report 109
7 1 ST ANNUAL AIRLINE RETAIL CONFERENCE 10th & 11th July Seattle Hotel, Brighton Marina, East Sussex, UK in association with official partner
8 April 2007 AIRPORT PROFILE Barbados From October, when the sea-air passengers begin to arrive, through December, when the international passenger traffic builds up, to the end of the season in April, we are very busy. But we need to create a buzz during the rest of the year. Challenges abound, then, but so do opportunities. Work begins later this year on a further 14,000sq ft extension of the terminal, which will ease the pressure on space. The airport has earmarked cargo traditionally a small percentage of income as a revenue stream for the future, and it projects +3% passenger growth in 2007, after several successive years of stalled growth. Romero says: The tourism authorities are helping to market the airport and promote Barbados as a hub, which we hope will help attract more carriers here. We have an optimal location in the Caribbean, with good connections to the other islands. We intend to capture as much of the transit traffic as we can, as well as the destination-bound traffic. If we do that well, the commercial opportunities will be huge. Grantley Adams International Airport: duty free, duty paid and food & beverage concessionaires 2007 Duty free Caribbean ARI Duty Free Caribbean Diamonds International BADMC/BIDC Refinery Ltd Duty paid Seashell Aunt Paulie s Travel Essentials Tamarind Seed Best of Barbados Food & beverage Gate Zero Bar Airport Restaurants Limited Shorey Restaurants Café Blue Chefette Christophe s Café Temple of retail: Diamonds International is among the bright new stores that adorn Grantley Adams revamped commercial areas, which now boast a strong mix of local and international concessionaires The Moodie Report 111
ARE OWNED BY V&S VIN & SPRIT AB V&S VIN & SPRIT AB. CRUZAN INTERNATIONAL, NY, NY.
CRUZAN. RUM WITH NATURAL COCONUT FLAVORS. 27.5% ALC/VOL. ALL CRUZAN TRADEMARKS ARE OWNED BY V&S VIN & SPRIT AB. 2007 V&S VIN & SPRIT AB. CRUZAN INTERNATIONAL, NY, NY. April 2007 RETAILER PROFILE Duty Free
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