Maximising Commercial RevenuesDwell Time

Nigel DolbyFounder

Core Objective

To Maximise Airport Shopping & Dining Revenues:

Every PassengerEvery Customer

Every VisitorAll Day

Every Day

Achieving Our Objective?

Global Turnover = $35 Billion USDSignificant Evolution & DevelopmentImproved FacilitiesWidth & Depth of Portfolio

$35 to $40 Billion per annum Lost Sales

Achieving 50% of our Potential

We Are Not Maximising Revenues!

Delivering Our Objective

A Commercially Dynamic EnvironmentIn Which:

The optimum portfolio of shops, restaurants, facilities

Of the appropriate quality and size

In the right locations

Delivering the optimum range of products and brands

Supported by the highest levels of retail/dining standards and service levels

Dynamic Commercial Environment

Relaxed, Comfortable & Stress Free

Facilitate, Motivate, Stimulate & Inspire

Can Spend, Want to Spend & Do Spend

The 3 ‘Musts’: Money, Opportunity & Time

Commercially Dynamic?

Commercially Destructive Environments

Time

One of the 3 Minimum RequirementsIt’s a Must – Not a BonusAirports = Finite & Limited Time

2 Essential Elements to ‘Time’

Physical Time – ‘Dwell Time’The ‘Concept of Time’ – How long have I got?

Time Retrospectively Has No Value

Penetration %age by Dwell Time

0%10%

20%30%40%

50%60%

70%80%

5 15 25 35 45 55 65 75 85 95>

Dwell Time Minutes

Spend Per Customer by Dwell Time - Ratio Increase

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

5 15 25 35 45 55 65 75 85 95>

Dwell Time Minutes

Global Dwell TimeAirport Dwell Time = 137 Minutes36 minutes of Processes & Transitions101 Minutes to Complete

65 Minutes of queuing, waiting, watching & orientation47% of Total Airport Dwell Time is Wasted

Commercial Dwell Time = 29 MinutesOnly 21% of Customers Total Time

This is Not Commercially Dynamic!

Lost Dwell Time2.1 Billion Hours of Lost Time

Only 0.9 Billion Hours of ‘Commercial’ Dwell Time

Global Lost Dwell Time

0

100

200

300

400

500

600

700

Check In Security Orientation FIDS The Gate

Hou

rs in

mill

ions

Breakdown of Customers Airport Time

26%

47%

6%

21%Process Time

Queue, Watch & Wait

Basic Needs

Commercial DT

Dwell Time - Check InCapacityProcess TimesKiosk & On-line Ratios Staff CompetencyCheck-In SystemsQueue Management

NO

The Allocation and Utilisation of Check InDesks does not meet the demand from

Customers wanting to Check In

Check In

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

265 245 235 225 215 205 195 185 175 165 155 145 135 125 115 105 95 85 75 65 55 45

Arrival, Check In & Capacity ComparisonArrivalCheck InCapacity

Waiting

Queuing Over Capacity

Dwell Time – Check In

Customer: 18 Minutes of Waiting & QueuingAirport: >40% Capacity DecreaseAirline/Handling Agents: 22% More Resources

Duty Free Companies, Retailers & RestaurateursBrand Owners & Airport Owners:

$4 Billion Lost Revenues

Every Stakeholder Loses

Dwell Time – The Gate

• On-Time Departures• The Myth of Late Arrivals• Controlled by Airlines• Over Compensation

No Correlation Between Call to Gate & Boarding

Average of 22 Minutes of Waiting

Dwell Time – The Gate

Call to Gate

Permanent Gate

Arrival Pattern at the Gate

0%

50%

100%

150%

At Gate

Boar ding

At Gate 26% 66% 92% 100%

Boar ding 0% 0% 0% 0% 0% 0% 0% 27% 27% 27% 14% 5%

5 10 15 20 25 30 35 40 45 50 55 60

Arrival & Boarding Comparison

0%20%40%60%80%

100%120%

Minutes Pre Departure

At GateBoarding

At Gate 4% 10% 17% 28% 42% 61% 82% 95% 100%

Boarding 15% 54% 26% 5%

120 110 100 90 80 70 60 50 40 30 20 10

Dwell Time – The Gate

Customer: 22 Minutes of WaitingAirport: >18% Reduced Gate CapacityAirline/Handling Agent: 13% More Resource

Duty Free Companies, Retailers & RestaurateursBrand Owners & Airport Owners

$6 Billion Lost Revenue

Every Stakeholder Loses

The ‘Concept of Time’

• Processing Passengers – Not Serving Customers• 10 Minutes of Lost ‘Commercial Time’• ‘Wait in Lounge’?• “How Long Have I Got” – Timeframe

Control Of TimeI have got 45 mins – not – I had 45 minutes

Time Retrospectively Has No Value

Airport Spending Drivers

Impulse Sales – CriticalAdditional SalesImpulse = 79% of all revenueNeed or Want = only 21%

Only 27% Impulse Revenue73% Convenience RevenueOur Malls are not ‘convenience’Not Maximising Revenues

Downtown Shopping - 3 Spending Drivers

Need2% Want

19%

Impulse79%

Airport Shopping - 3 Spending Drivers

Need24%

Want49%

Impulse27%

Time – Understanding The ValueAirport Shopping/Dining Spending

0.00

1.00

2.00

3.00

4.00

5.00

5 15 25 35 45 55 65 75 85 95>

D we l l Ti me M i nut e s

Considered Impulse Concept of Time Impulse

Considered/Convenience – Finite ValueImpulse = Revenue GrowthImpulse driven by Dwell Time & The ‘Concept of Time’

Creating a Demand – We are Not Fulfilling a Demand!

Dwell Time - Summary$4 Billion Lost Revenue – Check In$6 Billion Lost Revenue – Gate$3 Billion Lost revenue – Security, FIDS, Orientation$5 Billion Lost Revenue – The ‘Concept of Time’

$18 Billion Lost Revenue

Appalling Customer Service Levels/ExperienceOver ResourcedCapacity Reductions

Every Single Stakeholder LosesWHY?

Why? Because We Always Have!

Queuing & Waiting is expected, tolerated and excusedCustomers have no choiceCaptive Audience Syndrome

Treating the Symptoms & Not Solving the Problems• Build for Queues• Queue Management Systems• Resources to Manage Queues• Fast Track – at a cost• Avoid Queues - Premium Service for the minority

We Manage & Exploit – We Do Not Eliminate

Why?Airports

• Poor Relationships with Airlines• There have always been queues• Operations v’s Commercial• Complex Contracts• Why Should We Change?• “What’s In It For Us”?• We Do Not Know Where to Start

Retail/Restaurant & Brand• Poor Relationships with Airport• Its Not Our Fault• There’s Nothing We Can Do • We Do Not Understand• Is It Worth It?• It is Too Difficult• We Do Not Know Where to Start

These Are Not Valid Reasons to Turn Your BackOn Your Share of $18 Billion Per Annum

Individual & Collective ResponsibilityYour BusinessYour CustomersYour Revenues

Global Averages Are Irrelevant$4 billion or $40 billion – it is just a number

What Does This Mean For Your Airport, Your stores, Your restaurants, Your brand

What Is This Worth To You?

The Challenge• Commercially Dynamic – Not Destructive• ‘Time Is of The Essence’• Eliminating Entrenched & Endemic Problems

Is This Challenge Realistic & Achievable? Yes It Is

Is This Challenge Worth It?Yes It Is

Is This Challenge Quick & Easy?No It Is Not

The ChallengeCommercial Dwell Time = $13 Billion per Annum

Efficient and Effective Processes

The Concept of Time = $5 Billion per AnnumCommercially Focused Customer Information – Not Passenger Data

$18 Billion - No Challenge is tough enough

I am up for the Challenge

ARE YOU?

Thank You For Your Time

I WelcomeAny Questions?