IDEAS home Printed from https://ideas.repec.org/a/eee/jaitra/v118y2024ics0969699724000851.html
   My bibliography  Save this article

Shopping or dining? On passenger dwell time and non-aeronautical revenues

Author

Listed:
  • Wu, You
  • Morlotti, Chiara
  • Mantin, Benny

Abstract

Data reveal that passengers spend more time at airports. Does this translate to enhanced commercial revenue, and if so which revenue types—food and beverage, retail, and other terminal services—are impacted? Leveraging a unique panel data of passenger dwell time at 89 U.S. airports, this study explores its influence on non-aeronautical revenues. We find that dwell time positively influences non-aeronautical revenues (10% increase in dwell time implies a 5% increase in revenues) with varying impacts on the revenue components. Specifically, we find that a 10% increase in dwell time is associated with an increase of 8% and 6%, respectively, in food and beverage as well as retail revenues, but with no significant impact on other terminal services revenues. Importantly, these impacts further vary with the airport terminal design, which we categorize as either linear, finger pier, or concourse. Our findings suggest that non-aeronautical revenues increase in dwell time at both linear and finger pier airports, with no such impact at concourse airports. Further, dwell time elasticities for food and beverage are roughly double at linear-design airports than at finger pier design airports. These are instrumental insights for further airport development and of merit for the discourse on airport privatization and regulation.

Suggested Citation

  • Wu, You & Morlotti, Chiara & Mantin, Benny, 2024. "Shopping or dining? On passenger dwell time and non-aeronautical revenues," Journal of Air Transport Management, Elsevier, vol. 118(C).
    • Handle: RePEc:eee:jaitra:v:118:y:2024:i:c:s0969699724000851
    DOI: 10.1016/j.jairtraman.2024.102620
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969699724000851
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jairtraman.2024.102620?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Serrano, Francisco & Kazda, Antonín, 2020. "The future of airports post COVID-19," Journal of Air Transport Management, Elsevier, vol. 89(C).
    2. Estelle Malavolti, 2016. "Single Till or Dual Till at airports: a Two-Sided Market Analysis," Post-Print hal-01406372, HAL.
    3. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
    4. Wen-Chun Tseng & Cheng-Lung Wu, 2019. "A choice model of airline passengers’ spending behaviour in the airport terminal," Transportation Planning and Technology, Taylor & Francis Journals, vol. 42(4), pages 380-390, May.
    5. Zuidberg, Joost, 2017. "Exploring the determinants for airport profitability: Traffic characteristics, low-cost carriers, seasonality and cost efficiency," Transportation Research Part A: Policy and Practice, Elsevier, vol. 101(C), pages 61-72.
    6. Yimeng Chen & Cheng-Lung Wu & Tay T.R. Koo & Ian Douglas, 2020. "Determinants of airport retail revenue: a review of literature," Transport Reviews, Taylor & Francis Journals, vol. 40(4), pages 479-505, July.
    7. Yokomi, Muneki & Wheat, Phill & Mizutani, Jun, 2017. "The impact of low cost carriers on non-aeronautical revenues in airport: An empirical study of UK airports," Journal of Air Transport Management, Elsevier, vol. 64(PA), pages 77-85.
    8. Fuerst, Franz & Gross, Sven & Klose, Ulf, 2011. "The sky is the limit? The determinants and constraints of European airports commercial revenues," Journal of Air Transport Management, Elsevier, vol. 17(5), pages 278-283.
    9. Pels, Eric & Verhoef, Erik T., 2004. "The economics of airport congestion pricing," Journal of Urban Economics, Elsevier, vol. 55(2), pages 257-277, March.
    10. Torres, E. & Domínguez, J.S. & Valdés, L. & Aza, R., 2005. "Passenger waiting time in an airport and expenditure carried out in the commercial area," Journal of Air Transport Management, Elsevier, vol. 11(6), pages 363-367.
    11. Lei, Zheng & Papatheodorou, Andreas, 2010. "Measuring the effect of low-cost carriers on regional airports' commercial revenue," Research in Transportation Economics, Elsevier, vol. 26(1), pages 37-43.
    12. Appold, Stephen J. & Kasarda, John D., 2006. "The appropriate scale of US airport retail activities," Journal of Air Transport Management, Elsevier, vol. 12(6), pages 277-287.
    13. Freathy, Paul, 2004. "The commercialisation of European airports: successful strategies in a decade of turbulence?," Journal of Air Transport Management, Elsevier, vol. 10(3), pages 191-197.
    14. Mwesiumo, Deodat & Halpern, Nigel & Bråthen, Svein & Budd, Thomas & Suau-Sanchez, Pere, 2023. "Perceived benefits as a driver and necessary condition for the willingness of air passengers to provide personal data for non-mandatory digital services at airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 171(C).
    15. Graham, Anne, 2009. "How important are commercial revenues to today's airports?," Journal of Air Transport Management, Elsevier, vol. 15(3), pages 106-111.
    16. Silva, João & Kalakou, Sofia & Andrade, Antonio R., 2023. "Maximizing non-aeronautical revenues in airport terminals using gate assignment and passenger behaviour modelling," Journal of Air Transport Management, Elsevier, vol. 112(C).
    17. Fasone, Vincenzo & Kofler, Lukas & Scuderi, Raffaele, 2016. "Business performance of airports: Non-aviation revenues and their determinants," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 35-45.
    18. Fuerst, Franz & Gross, Sven, 2018. "The commercial performance of global airports," Transport Policy, Elsevier, vol. 61(C), pages 123-131.
    19. Littlechild, Stephen, 2018. "Economic regulation of privatised airports: Some lessons from UK experience," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 100-114.
    20. Button, Kenneth, 2019. "Applied economics and understanding trends in air transportation policy," Transport Policy, Elsevier, vol. 80(C), pages 78-85.
    21. Castillo-Manzano, José I., 2010. "Determinants of commercial revenues at airports: Lessons learned from Spanish regional airports," Tourism Management, Elsevier, vol. 31(6), pages 788-796.
    22. Kratzsch, Uwe & Sieg, Gernot, 2011. "Non-aviation revenues and their implications for airport regulation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(5), pages 755-763, September.
    23. Adler, Nicole & Liebert, Vanessa, 2014. "Joint impact of competition, ownership form and economic regulation on airport performance and pricing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 64(C), pages 92-109.
    24. Martini, Gianmaria & Scotti, Davide & Viola, Domenico & Vittadini, Giorgio, 2020. "Persistent and temporary inefficiency in airport cost function: An application to Italy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 999-1019.
    25. Lu, Jin-Long, 2014. "Investigating factors that influence passengers' shopping intentions at airports – Evidence from Taiwan," Journal of Air Transport Management, Elsevier, vol. 35(C), pages 72-77.
    26. Alexandre Jacquillat & Amedeo R. Odoni, 2015. "An Integrated Scheduling and Operations Approach to Airport Congestion Mitigation," Operations Research, INFORMS, vol. 63(6), pages 1390-1410, December.
    27. Churchill, Anthony & Dada, Ezekiel & de Barros, Alexandre G. & Wirasinghe, S.C., 2008. "Quantifying and validating measures of airport terminal wayfinding," Journal of Air Transport Management, Elsevier, vol. 14(3), pages 151-158.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wu, Hanjun & Tsui, Kan Wai Hong, 2020. "Does a reward program affect customers’ behavioural intention of visiting the airport? A case study of Singapore Changi Airport," Journal of Air Transport Management, Elsevier, vol. 82(C).
    2. Castillo-Manzano, José I. & López-Valpuesta, Lourdes & Sánchez-Braza, Antonio, 2018. "When the mall is in the airport: Measuring the effect of the airport mall on passengers’ consumer behavior," Journal of Air Transport Management, Elsevier, vol. 72(C), pages 32-38.
    3. Choi, Jong Hae & Park, Yonghwa, 2022. "Exploring passenger and flight characteristics' impacts on airport retail income: Evidence from Incheon International Airport," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    4. Silva, João & Kalakou, Sofia & Andrade, Antonio R., 2023. "Maximizing non-aeronautical revenues in airport terminals using gate assignment and passenger behaviour modelling," Journal of Air Transport Management, Elsevier, vol. 112(C).
    5. Choi, Jong Hae & Park, Yonghwa & Wang, Kun & Xia, Wenyi, 2020. "Whether low-cost-carrier passengers spend more on duty-free goods at the airport? Evidence from Incheon International Airport," Journal of Air Transport Management, Elsevier, vol. 86(C).
    6. Mahpour, Alireza & Asadi, Majid & Baghestani, Amirhossein, 2024. "Are supply and demand the main key drivers of airport parking prices? The quantitative study," Journal of Air Transport Management, Elsevier, vol. 114(C).
    7. Fuerst, Franz & Gross, Sven, 2018. "The commercial performance of global airports," Transport Policy, Elsevier, vol. 61(C), pages 123-131.
    8. Wu, Cheng-Lung & Ma, Ngai Ki, 2022. "The impact of customised mobile marketing on passenger shopping behaviour in the airport terminal," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    9. Kenneth Button, 2020. "Studying the empirical implications of the liberalization of airport markets," Competition and Regulation in Network Industries, , vol. 21(3), pages 223-243, September.
    10. Fasone, Vincenzo & Kofler, Lukas & Scuderi, Raffaele, 2016. "Business performance of airports: Non-aviation revenues and their determinants," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 35-45.
    11. Choi, Jong Hae, 2021. "Changes in airport operating procedures and implications for airport strategies post-COVID-19," Journal of Air Transport Management, Elsevier, vol. 94(C).
    12. Tavalaei, M. Mahdi, 2020. "Waiting time in two-sided platforms: The case of the airport industry," Technological Forecasting and Social Change, Elsevier, vol. 159(C).
    13. Jiang, Yonglei & Huang, Ailing & Gao, Shengguo & Yu, Shunan, 2024. "Relationship between the terminal built environment and airport retail revenue," Journal of Air Transport Management, Elsevier, vol. 116(C).
    14. Thomas, Nivea & Jha, Kumar Neeraj, 2024. "Econometric evidence on the profits and revenues of Indian regional airports," Journal of Air Transport Management, Elsevier, vol. 115(C).
    15. Tavalaei, M. Mahdi & Santalo, Juan, 2019. "Pure versus hybrid competitive strategies in the airport industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 124(C), pages 444-455.
    16. Zuidberg, Joost, 2017. "Exploring the determinants for airport profitability: Traffic characteristics, low-cost carriers, seasonality and cost efficiency," Transportation Research Part A: Policy and Practice, Elsevier, vol. 101(C), pages 61-72.
    17. Abbruzzo, Antonino & Fasone, Vincenzo & Scuderi, Raffaele, 2016. "Operational and financial performance of Italian airport companies: A dynamic graphical model," Transport Policy, Elsevier, vol. 52(C), pages 231-237.
    18. Del Chiappa, Giacomo & Martin, Juan Carlos & Roman, Concepcion, 2016. "Service quality of airports' food and beverage retailers. A fuzzy approach," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 105-113.
    19. Kalakou, Sofia & Moura, Filipe, 2021. "Analyzing passenger behavior in airport terminals based on activity preferences," Journal of Air Transport Management, Elsevier, vol. 96(C).
    20. Jiang, Changmin & Zhang, Anming, 2015. "Airport congestion pricing and terminal investment: Effects of terminal congestion, passenger types, and concessionsAuthor-Name: Wan, Yulai," Transportation Research Part B: Methodological, Elsevier, vol. 82(C), pages 91-113.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jaitra:v:118:y:2024:i:c:s0969699724000851. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/journal-of-air-transport-management/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.