Without question, COVID-19 has been a test for airports large and small, metropolitan and rural. The entire industry has had to modify standard practices due to unprecedented challenges presented by the pandemic.
In August 2020, during the early throes of the pandemic, Greenville-Spartanburg International Airport (GSP) changed from traditional concessions contracts to more narrow management agreements for five of its nine food and beverage locations. Airport officials note that the new strategy helps safeguard GSP’s established levels of customer service and provides GSP with more input regarding day-to-day operating decisions that drive sales.
It also affects the South Carolina airport’s balance sheet. Previously, all concessionaires leased space from the airport, invested in their individual concepts and locations, and kept the associated sales/profits, less the amount paid to GSP per standard revenue sharing agreements. Now, an outside firm manages a handful of concessions and GSP keeps all of the sales and profits they generate less an incentive fee that the firm earns from those profits. The airport no longer collects rent for the concession space and is now responsible for investing money to develop the individual businesses.