Winter 2012 Kiosks Land at Denver Airport

New RMU program is now one of the largest in the airport industry.

Kiosks and RMUs have been cleared for take-off at Denver International Airport. The airport unveiled its new specialty leasing program in mid-September that includes a total of 38 units—24 RMUs and 14 kiosks—located throughout the three airport concourses.

The new RMU program is aimed at enhancing the airport’s existing retail merchandising mix. A second goal is to provide outreach to small businesses and minority- and women-owned businesses.

The Denver International Airport issued a Request for Proposal for the program in 2010, and the project was awarded to California-based Provenzano Resources to own, develop, lease, merchandise and manage the program through a seven-year contract. Provenzano Resources chose STAK Design to design, fabricate and install the state of the art RMUs and kiosks for the airport.

Denver International is projecting that the new retail offerings will add $13 million in concession sales in the program’s first year; generate an additional $500,000 in annual sales 
tax; and create almost 200 jobs.

The RMU/Kiosk program opened with a variety of retail concepts ranging from iconic local brands such as Hammond’s Candies, Breckenridge Hat Company, Wystone’s World Teas, Climax Jerky and Summit Shades. There are first-to-market retailers such as Alex and Ani, Sterling Works, Fire CZ, and MacTrade. National brands such as Bose electronics, NYS Collections and Rosetta Stone were also recruited for this program. “We have a strong demand for the program, and now that it is open we are getting even more phone calls,” says Irene Pierpont, director of special projects for Provenzano Resources.

One big draw for vendors is access to a sizable customer base. In 2010, nearly 52 million passengers traveled through Denver International Airport. “We felt like this would not only be a way to add additional revenue but also a way to promote our brand,” says Andrew M. Schuman, president and CEO of Denver-based Hammond’s Candies. Hammond’s Candies is leasing two RMU locations, one each in the B and C concourses. “We sell our products all over the country, however we are finding only about 10 percent of the people recognize our brand,” adds Schuman. The company is hoping that the high-profile airport locations will help to build brand recognition to 50 percent over the next 5 years.

The specialty leasing program complements an already strong airport concession program that spans nearly 168,000 square feet and includes more than 140 retail and food concessions. In 2010, the concessionaire program generated over $243 million in annual gross sales and over $43 million in revenue to the airport.

“This program provides an excellent opportunity for small businesses that have never retailed within an airport before,” says Leah Older, manager of alternative revenue and concession marketing at Denver International Airport. “We also benefit by providing our travelers and employees a unique shopping experience while enhancing our non-airline revenue,” she adds.

Leasing opportunities

Although the program is open to many business types, Provenzano Resources is focusing on creating opportunities for small, local, minority, women and disadvantaged businesses. The program’s goal is to achieve 25 percent participation by businesses that qualify under the federal Airport Concessions Disadvantaged Business Enterprise (ACDBE) program. In order to be certified as an ACDBE, firms need to meet certain criteria, including having at least 51 percent ownership by a socially or economically disadvantaged individual. Provenzano Resources is an ACDBE in Colorado, and went through the process to qualify so as to assist and understand these small business owners.

Vendors do need to adapt to differences that exist in the airport setting compared to a traditional mall location. One of the key differences is security. All employees are required to be screened and carry airport identification badges. In addition, the heightened security means added steps for stocking merchandise. Provenzano Resources created a unique system with an onsite distribution center to deliver merchandise directly to the RMUs and kiosks.

The merchants receive license agreements that range from between four and 12 months long. “We want to turn the program quite a bit because we want new, interesting and trendy merchandise,” says Pierpont. “So there are always going to be opportunities for new concepts at Denver International Airport through the specialty leasing program.”

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Beth Mattson-Teig

Beth Mattson-Teig is a freelance business writer based in Minneapolis, Minn. She specializes in covering the national commercial real estate industry.
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