It’s difficult to tell whether Singapore Changi Airport is an entertainment complex or an airport.
Changi features a three-screen movie theater, an indoor butterfly garden, a rooftop pool and inventive eateries that attract as many locals as travelers.
With more than 400 shops, including Apple and Tiffany (there are two of those), the Changi Airport would be the fourth-largest mall by the number of tenants if it were in the United States.
An audience that is both captive and often affluent has made airport commercial square footage some of the most lucrative in the world. But the pandemic has crushed the commercial calculus at airports, and no one is sure what comes next.
The leading airport for concession and retail sales in the United States is Los Angeles International, with revenue of $3,036 a square foot, according to a 2018 report from Airport Experience News. Chicago O’Hare clocks in second with $2,718 in sales a square foot. By comparison, the average mall retailer is around $325 per square foot, according to 2017 data from CoStar.
But that’s all gone now, said Alan Gluck, a senior aviation consultant at ICF.
“In general, sales are in the toilet,” Gluck said. For example, concession sales at San Francisco International Airport in May were down 96% from a year earlier. Duty-free concession sales were down 100%, he said, because all the stores were closed. In May 2019, duty-free sales were $11.5 million.
Until passenger traffic returns, Gluck said, airport retail properties are not going to be profit centers, and even when it does return, it may be at reduced capacity.
“I believe that we need to reconsider existing heuristics unless we think that customer behavior will return to what we now consider normal,” he said, adding that activities like health screenings often cut into space for other needs, usually concessions.
Many concessions are likely to need more space for social distancing, which will cut down on the number of retail units that airports can offer.
The very amenities that once made airports a standout for profit are the same things that are proving to be challenging. For instance, Changi’s theaters are still shuttered not just for pathogen protection but also because traffic is too low to justify the operating expenses.
“We will scale our airport operations based on the volume of passengers we serve,” said Ivan Tan, senior vice president for marketing communications with the Changi Airport Group, which operates the facility.
The airport’s traffic has fallen to 1% of what it was a year ago, which leaves little market for movies or gourmet meals, Tan said. The airport is using this time to close Terminal 2 to accelerate planned refurbishments, but the pandemic will cause some amenities to be replaced with new ones.
“The longer-term impact of COVID-19 on the facilities and amenities we provide remains to be seen,” he said.
So far, the pandemic has not paused terminals planned or in progress in the United States, although some airport operators are reconsidering traveler amenities.
Kansas City International Airport is in the middle of a $1.5 billion terminal renovation plan to consolidate its three terminals into a single 39-gate giant, including a two-story fountain, a children’s play area and updated concessions.
It’s not the first time the airport has been remodeled during significant airline-industry disruption: On Sept. 11, 2001, the airport was in the middle of a major overhaul. Changes had to be made to screening areas quickly, and interior and exterior glass fortified.
“In that case, the project was underway. The adjustments were made, and it wasn’t too late,” airport spokesman Joe McBride said. “We are still early on this terminal project; the construction is ongoing, so we are in better shape than in 9/11.”
Other projects underway, including at La Guardia Airport in New York and in smaller markets like Lafayette, Louisiana, are moving ahead but taking a wait-and-see approach on adjustments.
New terminal construction should focus on space not just for the coronavirus but for other respiratory illnesses, said Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.
“The crowded nature of things in an airport has always made me uncomfortable, particularly in a less modern one,” Fauci said. “People are literally nose to nose waiting to get on the plane.”
He said new terminals needed to allow enough space for people to spread out, offer high-efficiency particulate air filtration and distribute free masks.
He also would like to see more health screening at airports to prevent the type of virus spread seen in Wuhan, China, and Milan, Italy. Such testing could include temperature checks, questioning and contact tracing. Because 40% of coronavirus cases are asymptomatic, the task is challenging but still worthwhile, he added.
“You can’t throw up your hands and say it is impossible,” Fauci said.
The key to making post-pandemic airports commercially viable is to make the medical screenings uniform everywhere, said Vik Krishnan, aviation consultant at McKinsey.
“You didn’t have different airlines touting their safety after 9/11,” he said. Travelers will be more inclined to fly again if airports adopt the same safety standards now.
In Kansas City, officials are making adjustments as necessary. If more space is needed, their design has flexibility built in, something older airports can’t do as easily.
“As of now, we haven’t changed course or modified the existing new terminal design, but we are in the early stages of exploring how to enhance traveler safety and health,” McBride said.
The new building will give the airport more flexibility in dealing with this pandemic or future ones, including the possibility of conducting health screenings outside, said Laura Ettelman, a managing partner at Skidmore, Owings and Merrill, an architectural and design firm in New York that is overseeing the airport renovation.
The pandemic will accelerate future terminal construction at other airports to incorporate flexibility, she added.
“Airports are difficult architecturally because they become outmoded quickly, so all the buildings we are working on today are about flexibility and more flexibility,” Ettelman said.
Other airport designers are following that same mantra.
“We are not scaling back at the moment,” said Curtis Fentress, a Denver-based architect whose firm is involved in redesigning the international terminal at George Bush Intercontinental Airport in Houston, as well as terminals in Nashville, Tennessee, and Orlando, Florida. “What we can all do is space things out and make things as touchless as possible.”
Even before the pandemic, he was striving to keep things contactless.
“You are moving enormous numbers of people through the airport, so I introduce daylight to lead and guide you through the building and have them be sanitary and feel as clean and safe as possible,” he said.
But even bigger changes will be needed, said Henrik Rothe, a senior lecturer in airport planning at Cranfield University in Britain who has designed airports in 45 countries. The disruption to airports is the most complex ever, and all stakeholders will have to come together to re-imagine them, he said.
The severe acute respiratory syndrome outbreak of 2002 was a pandemic warning that most airports ignored, he said. In the long term, airports are going to have to reassess their operations and perhaps become more oriented toward business and infrastructure than amenities.
“Airports need to become multipurpose commercial centers, sustainable and resilient against disruptive events,” Rothe said.