USA. The Areas USA business takes a different profile to the group’s sister operations in other regions, with airports and motorways the key channels – and in both the company has made big recent gains and has ambitions to growth further.
Areas occupies spaces in ten major airports, a number set to be extended through a recent contract win covering five units at San Diego International’s new T1.
This adds to a key contract serving Houston William P. Hobby Airport, won in March and taken over in May, with new outlets likely to open by Q4. Plus, most recently, a ten-year contract to operate seven additional food & beverage locations at Atlanta Hartsfield-Jackson International Airport.
In motorways, Areas is adding to its Florida and Maryland turnpike business with a new contract for the West Virginia turnpike, which includes three plazas that are currently being redeveloped. In Florida, Areas operates eight motorway plazas, and two in Maryland.
As an F&B company Areas aims to maintain and build on its status as a formidable challenger in the US travel dining market, which is probably the world’s most competitive.
Areas USA CEO Carlos Bernal says: “It’s clear that everybody wants to grow in the US, especially our larger competitors. Our strategy is that we are not going to be all things to all people. Instead we aim to remain strategically focused by being nimble and doing everything we can to meet and exceed the expectations of our clients, guests and team members.
“We are very customer-centric with both our dining guests and airport clients. We listen very intently to their needs and we then curate a plan that not only matches their vision, but gives them an end product that creates ‘the front door’ into their community. I would like to think that our recent concessions wins are a validation of that strategy and the partnership commitment that we have made to our clients.”
He adds: “We really understand the dynamics of a given city or market and provide each airport with a portfolio of brands based on their specific consumer, whether leisure or business, or both, For example, we know that San Diego is very different from New York. And even in New York, JFK is different from LaGuardia, which is very different from Newark.”
Having put those principles front and centre of the recent tender bids, now Areas is focused on executing excellence at its new operations in Houston and San Diego.
At William P. Hobby the estimated turnover of the concessions, awarded by operator City of Houston, is US$470 million across the ten-year contract duration. Some of the brands being introduced include Throughgood Coffee Bistro & Bar, Starbucks, Yard House, SpindleTap Brewery, Killen’s Barbecue and The Spot.
Bernal says: “At Houston the City was looking for more diversity in dining, with a mix of national and regional brands, along with local favourites. Houston Hobby is a strong Southwest Airlines hub; you’re not just serving the Houston customer, but you’re also serving customers connecting through the airport. So they were looking for a broader portfolio mix and the strong brands we put together for them meet this need.”
Areas recently won a 15-year contract to operate five new restaurants at San Diego International Airport, with an estimated value over the term of US$550 million. These new locations are scheduled to open from 2025 through a series of phases to 2028.
The Areas concepts for T1 include Novecientos Grados, a partnership between skateboarding legend Tony Hawk and award-winning chef Claudette Zepeda; Mediterranean restaurant Luna Grill, which offers a strong focus on healthy eating options; beer and wine-tasting establishment SIP Wine & Beer; Carnitas’ Snack Shack, which is inspired by a well-known meat restaurant in San Diego city centre; and pizzeria Mr. Moto’s Pizza.
“At San Diego, the airport was very clear they wanted a hyper-local approach to represent the City and San Diego County. That’s what we delivered and we were very tuned into those terms,” says Bernal.
As we reported last month, Areas has also won seven new location at Atlanta Airport, valued at US$200 million in sales over the ten-year term. They add to the 13 units already operated by Areas at the airport, which the company entered in 2013.
Areas’ new offer will focus on a local-flavoured brand proposition and will include concepts such as gourmet markets Duff’s Market and Citizens Culinary Market; local concept Johnny’s Chicken and Waffles; the Old Fourth Distillery; ATL Community Market and On Your Way stores; and a Starbucks. These will be developed and open from late 2024 onwards.
Areas is also looking across its US estate to introduce newness, creativity and further innovation.
Bernal says: “In general we are leaning local first, then regional, then national as that is the best fit for most airports. There is still a big opportunity to partner with local restaurateurs and brands, supplemented by the regionals. We do a lot of outreach work with local restaurateurs well before contracts come to market, understanding what the community wants, but also ensuring that if we win a contract, we too become part of the fabric of that community.
“A lot of RFPs also stipulate a national burger or coffee name on top of the local elements, all aiming to target the needs of consumers. But today, local really is the window to the city so the more that we can introduce smaller local company, the better for customers, but also the better for the airports and the communities we serve.”
Other big picture trends include the blending of the leisure and business traveller.
Bernal says: “We had very defined categorisations before, but now you also have a hybrid, with many people combining their work and leisure travel. It’s a dynamic we have to adapt to, and it’s not going away.
“Beyond that, the customer is making up their own minds about how they want to engage, whether that is through a digitised experience, or a sit-down, relaxed, dining experience. And even in that segment, technologies such as order and pay-at-table are playing a part. We have to offer our guests options based on how they want to interact.
“Something we have seen accelerate is the idea of ‘food-venience’; this leans in with food first but convenience and essentials are blended in with that. This is also about how the consumer wants to interact, and offering a wider selection so they have choice. You see it across channels. In motorways, F&B is 70% of the business, with essentials at around 30%. It’s going in that direction at airports too.”
Bernal also addresses the challenges of accelerating costs in the US airport business during and post-COVID – and how a fresh look at contract agreements might help reshape the sector.
“Between inflation, commodity and labour, we are seeing costs spiral. It’s not an easy market even though we are back to pre-COVID business.”
Returning to the theme of how Areas can expand in the US, Bernal says that with well over US$1 billion of contracts coming to market in the coming years, the opportunities are immense.
“We like to think that we look at the business and present our offerings differently. Our ‘Areas spirit’ resonates for us, and we see that as a point of difference. We know that dollars and cents talk, but our partners also like working with us because of who are we are and the values we live by – authenticity, integrity, and accountability.”
*Click here for a recent interview with Areas CEO Óscar Vela, who talks about recent contract gains, regional ambitions, the convergence of food and retail and corporate spirit.
**Click here for an interview with CEO France Yves Lacheret about protecting and extending a strong position in a key territory.
***Click here for our recent interview with CEO Latin America Eduardo Torres, who talks about consolidation and expansion in Mexico and Chile.
