Auckland International Airport: Best in Class for F&B, but is Everyone Winning at AKL?
In this article, I look into the revamped food and beverage program at Auckland International Airport (AKL). In June this year, AKL beat several high-profile competing airports to win ‘Global Airport Food & Beverage Offer of the Year’, the highest honour at the 2019 Airport Food & Beverage (FAB) Awards. FAB recognises the best travel-related food and beverage concepts in airports located throughout the world.
Richard Barker, General Manager of Retail and Commercial at AKL, shared with me their award-winning transformation journey that has seen New Zealand’s biggest airport roll out a multitude of new restaurants, cafes and bars to improve the customer experience for passengers.
I also caught up with my ex-colleague Leanne Wall, Head of Marketing & Engagement at Emirates Leisure Retail (ELR), to find out how their establishments are performing. ELR debuted Aroha Cafe & Bar, Wondertree and the soon-to-open Vantage Bar.
As part of its ambitious 30-year plan to become the ‘airport of the future’, AKL is piloting its way its way to international acclaim with 2019 proving to be a fruitful year for the airport in terms of financial success and top-rated customer experience.
AKL announced its financial results for 2019 in June, reporting a total number of passengers of 21.1 million, a 2.8% increase on 2018. Also reported is a revenue of $743.4 million for the 2019 financial year, and underlying profit after tax of $274.7 million up by 4.4% from the previous year.
Further to this, the reported retail income showed an increase of almost 20%. The expanded international terminal along with the new shopping and F&B locations and upgraded bathroom facilities, public seating areas and communal charging stations sparked a strong customer response, scoring the overall Airport Service Quality (ASQ) more than 4 out of 5 for both terminals, celebrating a 12-year high for AKL.
All figures considered, it is clear that the airport won’t slow down any time soon, and that the upgrades made thus far are substantially beneficial for both the airport, its customers and the F&B retail partners.
Five years ago, I first met with Richard to discuss the airport’s transformation plans during my role as Managing Director at ELR, one of the main F&B concessionaires in the region. His vision at the time was clear: to bring the best of local and international F&B offers and brands to the airport.
Looking back at their progress and the airport’s recent FAB-awards, Richard is proud to be acknowledged for the hard work his teams put in.
An approach taken to anchor the new F&B offerings was making sure key tenancies were delivered collaboratively. One of the main goals was ensuring the concessions were granted the best possible opportunities and support for taking the necessary risks to deliver the vision – essentially setting all commercial partners up for success.
“We took great measures throughout the tender process to ensure everyone was clear on the vision and informed about any and all challenges that might come up and have solutions in place to overcome these potential obstacles,” Richard explains. “We understood that some of the partners needed critical mass at the terminal to allow them to take the needed risks. Further, that each party needed cash generators and a portfolio spread evenly across domestic and international spaces. This allowed our partners to invest appropriately in quality teams and staff – it was a very direct and deliberate commercial plan.”
The new concessions represent a mix of local and international brands. There was a focus on showcasing the best of local suppliers and, in Richard’s words, bringing a ‘sense of Britomart into the terminal’ all the while including global value offers – hence the choice of McDonald’s as the QSR partner. Part of the vision was offering a variety that cater to all kinds of travellers, thus the need for restaurants hospitable to families.
So, how is it all playing out so far?
Walking in to AKL’s International Terminal for the first time in many months, I had some anticipation of what I might encounter around the F&B transformation and was eager to see the nearly completed offer. The first thing that stands out is a couple of interesting (odd) kiosks that seem to take away from the main offer. One is a tea bar that just doesn’t work and the second is a Heineken bar which I believe will close when the main bar in the precinct opens, which will be a good thing.
Once through the slightly disappointing start, you get a much better sense of the improved offer. Best Ugly Bagels, Better Burger and Mexico are fantastic offers and the perfect representation of the best of local, which is what Richard alluded to when he said the terminal has a ‘sense of Britomart’ (local hospitality precinct on the harbour in Auckland). The pricing is also strong – a burger at Better Burgers is only $6.50, for which I hope they get rewarded by customers when up against Maccas.
My favourite offer was Mexico. It’s a very cool outlet and striking in its design. I can see it’s the go-to place past midday – you literally cannot miss the massive neon margarita sign.
The three other outlets in this area are a mixed bag: the Vietnamese and Japanese outlets add strongly to the mix although they are certainly not overwhelming. The let-down is 400 Gradi. It’s not well-located and seems to suffer somewhat of an identity crisis, but it’s not the end of the world since the pizza is actually very good. It’ll be interesting to see if it lasts the distance.
The main cafe in the precinct is Aroha, a bespoke offer that does a good job with a strong menu, lots of local food, beverage and good coffee. Commercially, it’s likely the most successful given it’s the best located venue up against the terminal glass with views over the airfield and mountains.
Leanne from ELR is also thrilled about this outlet.
The soon-to-open hero outlet for the terminal, the 450+sqm Vantage Bar, is still under construction. It will be very interesting to see how this sports bar will ‘pull’ from the other venues and change the current commercial returns for the current operators.
Moving to Level 1 of the terminal, you are greeted dead ahead by Wondertree which, like Mexico, is a stunning and very well-located fitout. Every single passenger must walk past it at some point in their journey. It’s a UK brand in a NZ airport, but it works and fills the vision for AKL to bring the best of both local and international. It also very importantly gives the locals something different and brings a first to the country. This should not be overlooked in any F&B offer, since most airports in this region’s number one passenger group are locals and capturing them from a F&B commercial aspect is vital.
A bit further on is Glampgrounds, a recent FAB award winner for sense of place. While the offer looks quite fresh, it’s not well-located and you get the feeling it could be in for a fairly rough commercial time once the main bar opens – only time will tell. McDonalds completes the Level 1 offering – busy and efficient as usual and, like Richard says, ticks the boxes for value, day part (strong breakfast offer) and family.
Clearly the F&B transformation is winning light years ahead of the previous offers and, once completed, you get the feeling that AKL has delivered a strong and compelling food and beverage mix that will only be enhanced once the final hero site is opened. Richard also discussed that dwell times have gone up, which is a key indicator that passengers are engaging with the transformation and that word is spreading. Social media feedback is also very strong, and I spoke to at least two dozen passengers drinking and dining and the overall sentiment was that they are very happy with the choice and range of offers. They singled out Wondertree and Mexico as favourites and pleasingly not once was price mentioned – another key indicator that AKL got it right for the customers.
Overall the key callouts for AKL’s F&B transformation seem to be that when an airport is clear in its visions, clear with its commercial partners around expectations and commercially responsible around giving operators multiple tenancies to protect against some not working and/or experiencing growing pains, the outcome can be that everyone can win.
It’s still early days for everyone and ultimately time will tell if all the F&B partners are commercially successful since you get the feeling there may be some growing pains. At this stage, however, it’s off to a very good start.