"Business takes off at airport restaurants"

Saturday, August 2, 2003

Business takes off at airport restaurants
Hungry passengers forage as in-flight food disappears
BY KYLE STOCK
The Charleston (SC) Post and Courier


As airlines increasingly cut in-flight meal service and charge for anything
more substantial than a bag of pretzels, remodeled restaurants and snack
bars at the Charleston airport are doing more business than ever.

Creative Host Services, the San Diego-based company that owns and operates
almost all of the airport's eateries, reported $2.1 million in Charleston
revenue for the fiscal year ended June 30, a nearly 11 percent increase from
the previous year. Over the same period, the number of people getting on and
off planes in Charleston rose 6.9 percent.

The Hudson Group, a New Jersey-based company that owns the airport's Hudson
News, Euro Cafe, Discover Charleston store and U.S. Open Golf House, saw a
3.4 percent increase in revenue. The Hudson Group is "pleased" with its gain
given the lackluster economy and a nationwide cutback in corporate travel,
according to spokeswoman Sonia Buckman.

While both Creative Host and Hudson Group have upgraded their Charleston
facilities in recent years, the companies' success may be rooted in an
unrelated factor -- travelers are hungry.

Since airlines were deregulated in 1978, commercial carriers have trimmed
in-flight food and beverage service to offer lower ticket prices. More
recently, Delta Airlines, US Airways, Northwest Airlines and United Airlines
have all started to sell in-flight meals rather than providing them to
passengers as part of their trip. Continental Airlines, which flies two or
three routes a day to and from both Newark, N.J., and Houston, is the only
company still offering more than a snack to Charleston passengers.

Dana Forty didn't see any fellow passengers buy food on her cross-country
trip to Charleston this week, although she said a flight tendant was hawking
$12 sandwiches from a "bistro cart." The 23-year-old Navy weapons officer
did, however, grab a smoothie when she landed in the Lowcountry.

"There's a lot of (food) options for such a small airport," Forty said.

Sayed Ali, chief executive officer of Creative Host, said his Charleston
business continues to grow as a result of a $1 million renovation completed
early 2001. Ali split a bar-restaurant area into a food court layout, with
his Magnolia Grill, a bar and sit-down restaurant on one side, and Freshens
Yogurt, Arrezzio Pizza, Nathan's Deli and Creative Croissants franchises on
the other. Creative Host also moved into the gate areas of the two terminals
with Palmetto Pub and Runway Cafe.

The company owns 90 eateries in 26 airports, including those in Los Angeles,
Newark, and Denver. Charleston accounts for about 5 percent of Creative
Host's total revenue, he said.

Wayne Crawley, a sales executive for Eastman Kodak Co. who flew into
Charleston this week, said airport eateries nationwide are improving to meet
the demand of an increasingly hungry traveler. Crawley, who spends 80
percent of his workweek away from home, was impressed by what Charleston had
to offer.

"It's not bad for a small airport," he said over a beer and nachos at
Magnolia Grill. "It's a lot nicer now than it used to be."

Last year, the airport's vendors sold an average of $5.97 worth of food,
beverages and gifts for each passenger getting on or off a plane, according
to Airport Revenue News, a Florida-based monthly trade magazine covering
issues affecting airport business.

Although Savannah/Hilton Head International Airport concessions made $6.76
per passenger, Charleston's earnings-to-passenger ratio was the 28th highest
nationwide, besting huge airports like Chicago's O'Hare and
Atlanta-Hartsfield.

Despite its recent success, the airport concessions business has been
turbulent the past few years. The terrorist attacks of Sept. 11 sent Ali's
business into a nosedive, along with the rest of the airline industry. His
operations took another hit this winter and spring as the war in Iraq and
SARS kept people off planes.

"Everyone thinks the airport market is an easy market to be in, but one
needs to be prepared for the unforeseen event," Ali said. "When these
situations happen, it's like a total shutoff of cash coming in."

Along with cuts in in-flight food service, Ali's eateries have been helped
by increased security at airport. As check-in and screening lines stretch to
levels unheard of pre-9/11, travelers face more "dwell time," an industry
term for how long passengers spend in an airport before and after getting on
a plane.

Sean Smith, director of operations at Creative Host, said travelers are more
likely to sit down in an airport restaurant and buy a full meal than they
were Sept. 10, 2001. Creative Host's operations in Charleston have benefited
as a result.

"We're staying ahead of the industry," Smith said.

While all travelers hope for clear skies, Ali doesn't mind rainy days. He
said delays caused by a passing thunderstorm sometimes can double daily
revenue at an airport eatery.

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