US. In important breaking news from the US, two major duty free contracts are poised to change hands.
The fate of the controversial Orlando International Airport duty free concession will be decided on 18 January at a Greater Orlando Airport Authority Board meeting, with an alliance between The Nuance Group and DFASS still in pole position. Meanwhile the Atlanta City Council has approved an earlier recommendation to award the Hartsfield-Jackson Atlanta International Airport duty free concession to Duty Free Americas.
As first revealed by The Moodie Report, the Greater Orlando Airport Authority Board will consider the Airport Committee’s (i.e. staff) recommendation to award the Orlando International Airport duty free concession to the joint bid from The Nuance Group and DFASS.
The Board meeting was originally due to be held last month but was delayed due to an appeal by Duty Free Americas against the recommendation and the rationale with which it was reached.
Now, though, a decision appears imminent. Airport spokesperson Carolyn Fennell confirmed to The Moodie Report today: “The duty free proposal [from the staff] is expected to go to the board on the 18th.”
The seven-year contract is due to begin in January 2013.
In October The Moodie Report broke the story that the Nuance/DFASS alliance had been ranked highest by the Committee after an ultra-competitive tender, thus becoming the recommended bidder.
Duty Free Americas ranked second, followed by Travel Retail Group (led by Gebr Heinemann), Dufry and incumbent World Duty Free Group [the stores have been run for many years by Alpha Duty Free, now part of Autogrill-owned World Duty Free Group – Ed).
Besides the financial offer, the Orlando criteria included experience and qualifications; quality, variety and range of merchandise; concession improvements and DBE credentials.
According to the ARN Factbook, duty free sales for 2009 (the most recent available) reached US$14,661,926 over two terminals, broken down as follows:
Terminal A/S-1 US$3,799,488
Terminal A/S-4: US$10,862,438
 |
Orlando International Airport is a key US location for airport duty free sales |
The Orlando Sentinel reported this week that 2010 sales reached US$15 million, with the current retailer obliged to pay the airport authority a minimum of US$2.6 million in concession fees.
The newspaper said: “In its appeal, Duty Free Americas argued that the selection committee “˜was badly misled by its consultant in evaluating the crucial Financial Return portion of its analysis. AirProjects [the consultant] introduced unsubstantiated opinions and led astray the committee by introducing concepts of ‘risk’ and ‘projected sales’ when those concepts were never a part of the RFP and introduced no risk at all to GOAA’.”
It continued: “The company’s appeal said selecting Duty Free America had been “˜inappropriately described as ‘risky’ because it may not achieve its sales projection or because its sales projections were higher than the consultant’s’.”
The contract is an important one in US duty free terms with significant upside potential. Orlando is a traditional gateway for high-spending British travellers and is also attracting an increasing number of Brazilians and other Latin Americans. Last year international passenger traffic grew by +9.0% to 3,245,799.
DOUBLE BLOW TO AUTOGRILL
The seemingly certain loss of its Orlando business is a second consecutive blow to Autogrill.
As revealed by The Moodie Report on 14 November, The City of Atlanta Department of Procurement recommended the award of its duty free contract at Hartsfield-Jackson Atlanta International Airport to Duty Free Americas Peachtree LLC, ahead of rival bids led by Aldeasa (Autogrill), The Nuance Group and Dufry. That recommendation has just been approved by the Atlanta City Council, The Moodie Report can confirm.
The retailer will operate three outlets covering 19,145sq ft in the new Maynard Jackson Jr International Terminal, scheduled to open in May. The concession, which will run for seven years with a three-year extension option, comprises two outlets of 3,227sq ft and 8,252 sq ft on concourse F and a 7,574sq ft store on concourse E.
The City of Atlanta asked bidders for a minimum annual guarantee of US$5.95 million or a percentage rent of at least 15% of gross sales, whichever is higher, in the first year. From the second year, that becomes 85% of the previous year’s rent or the US$5.95 million minimum, whichever is higher.
The airport served 4.5 million international passengers in 2010, with duty-free sales of US$22.5 million.
Advertisement | |
