Internet Travel Monitor - Marketing, Research & Tech
August 23, 2017
New Apps for the Airport Promise to Feed Time-Crunched Travelers Fast
If you fly often —at least in the United States — you may have noticed you’re spending less time waiting for connecting flights. That’s because several airlines have tweaked schedules at big hubs, including Chicago and Dallas, to allow connecting passengers to seamlessly move from one flight to the next.
Once, passengers might have waited a couple of hours, but now they might spend as little as 30 or 45 minutes in the terminal. For airlines, the benefit is obvious, since — as the old saying goes — airplanes only make money in the air. And travelers benefit too, since few enjoy waiting in crowded airports.
Still, there’s a problem. With little time between flights, passengers often cannot buy lunch, dinner or snacks. Airport restaurants try to handle rushes between banks of flights — it helps that they know when the big lines will come each day — but it’s not easy. Many now sell more grab-and-go food than a few years ago.
But this is the age of mobile phone applications, and a couple of newish ones promise to solve this problem for restaurants and passengers. One, called Grab, allows customers to order food from just-landed airplanes and pick it up from restaurants in the terminal. Grab, which operates at about 20 U.S. airports and London Heathrow, plans to expand and will add delivery in San Diego, with a courier taking orders to a passenger’s gate. Grab also plans to let travelers order non-food items from airport stores.
Meanwhile, Northern Virginia-based Airport Sherpa has focused on delivery, and already offers not only food, but also items from airport stores, so it can send water, magazines and even neck pillows to gates. For now, it’s only available in Baltimore, with Pittsburgh and one unnamed major U.S. airport coming soon. By the end of next year, Airport Sherpa wants to be in nearly 20 airports.
In both cases, not every concessionaire participates, but the apps promise they have enough options to get passengers fed without long waits. And while the services may be especially useful during layovers, the apps target all passengers who don’t have much time.
It sounds like an obvious model, since many consumers now order food and other items on mobile apps like Grubhub, Caviar, Doordash, UberEats and Postmates.
But nothing at an airport is easy. For one, businesses operating at airports need special approvals, and they’re not always easy to get. For another, couriers must pass a background check to earn an airport badge, and while most people pass, employees generally do not find the badging process pleasant, so the apps may have trouble finding workers. (One way Airport Sherpa is getting around this is by hiring people who already work at the airport to work short shifts for extra money.)
This is not the first time startups have tried airport food pickup and delivery. A couple of years ago, a company called AirGrub received some buzz, and as recently as May 2016, it was on Facebook promoting its pick-up service in San Francisco, Boston, and New York JFK, with the hashtag #ScrewTheLines. But its founder and CEO, Surya Panditi, took a job in India, and the service no longer exists. Panditi did not reply to a request for comment. Another startup, called Airdo, also apparently came and went.
No matter. The executives from Grab and Airport Sherpa say they can succeed where the others did not. They say the timing is right, and that airports and airlines now better understand why they must give passengers what they crave: the chance to use their phones at airports just as they do elsewhere.
“Everyone expects to be able to open up their phone, place an order for anything they want, and have it brought to them,” said Patrick DellaValle, Airport Sherpa’s CEO and cofounder.
GRAB FOCUSES ON PICK-UP
Between the two companies, Grab is considerably further along.
In addition to being available at far more airports, Grab is also available to customers in more ways. At some airports, customers can place orders through the American Airlines mobile app. In addition, some airports, including Dallas/Fort Worth, or DFW, have embedded Grab into their apps.
Adding Grab to DFW’s app was an obvious move after 2015, when American shortened the time most passengers have between connecting flights. It came roughly at the same time the airport added more quick-service options for time-strapped passengers.
“We don’t want our customers to feel stressed and not have the option to have food,” Atif Elkadi, a spokesman for the airport, said in an interview. DFW now wants to increase the number of restaurants available through Grab, he said.
American and DFW receive money from Grab, though no one would say how much. But often, Grab’s Chief Experience Officer Jeff Livney said, airports do not take commissions. Generally, airports have revenue-sharing deals that require restaurants to pay more in rent when revenues increase. So if Grab is successful, an airport will profit.
For passengers, Grab’s pick-up service is free, though there will be a fee for delivery, which will be handled by a separate startup called AtYourGate. Grab will consider offering delivery at airports beyond San Diego, but Livney said courier service requires even more approvals from airports, so “it will be quite slow to expand.”
For its pickup service, Grab makes money by taking its own slice of every sale. That may sound like a bad deal for restaurants, but Livney argues Grab provides incremental revenue for them, since they’re selling to passengers they previously might not have reached. Plus, he said, travelers generate larger bills when they pay via mobile app.
“When you’re in line in a restaurant to place an order, most people are nice and there are a handful of people behind them, so they will order and move on quickly,” he said. But on the app, he said, travelers “browse and see the full menu.”
Grab’s top performer is the Chili’s in Fort Lauderdale’s airport, and the chain’s Dallas Love Field and Detroit locations not far behind. “At the end of the day, people are traveling and a lot of people are looking for stability,” Livney said. “They know what to expect at Chili’s. It’s not some local brand they have never heard of.”
DELIVERY IS KEY FOR AIRPORT SHERPA
At Airport Sherpa, the focus is on Sherpas — people walking through the airport wearing a purple vest with their “sherpa number” printed on it.
Like a courier at Postmates, which mostly delivers food in and near larger U.S. cities, a sherpa can bring items sold at the airport to a gate for a flat fee.
Passengers pay between $3.99 and $7.99 for each delivery, with prices dependent on how long it takes the sherpa to reach the traveler. If a passenger wants something from another terminal, it’ll cost more. Passengers cannot tip in the app, but that’s coming soon.
Airport Sherpa pays the full price of the food or items to the restaurant or store, and in some cases, it shares revenue with airports. Since the service is not cheap, the company has found business travelers to be top customers. But Sundays can be lucrative, with groups ordering pizzas and other comfort food. “Maybe they have had a long weekend,” DellaValle, Airport Sherpa’s CEO, said.
Passengers can’t track the sherpas using GPS data, as they can with many non-airport services, though the company might add that functionality. For now, travelers receive updates at each stage, so travelers generally know when food will arrive. Passengers also provide flight data, and Airport Sherpa promises items will arrive before boarding.
DellaValle acknowledged the strategy needs tweaks for big hub airports. In Baltimore, which is not a true hub for any airline, flights generally leave at random throughout the day, with a few bursts of peak activity. But at massive hubs, most flights leave and depart at almost exactly the same time, and it may be difficult to find enough sherpas during popular periods.
DellaValle said the company is developing algorithms to help with staffing, ensuring one sherpa can deliver multiple orders on the most efficient pre-planned walking route.
A CHALLENGING MARKET
But Hani Mahmassani, an engineering professor at Northwestern University and director of its Transportation Center, said while he expects there’s a sustainable model for airport food pick-up apps, he wonders whether delivery on a major scale is possible — at least with humans doing the work. At $4-$7 per delivery, he said, couriers might not be fast enough to create a big return for the company.
“The real opportunity for this type of service lies in automation,” he said in an email. “Why have a human Sherpa deliver the goods when you could use a robot — that would be motorized for the travel part so it could go faster, and thus get faster turnaround time than human delivery. Airports are controlled environments where automation may be easier to deploy at scale.”
But even then, he said he’s not sure enough travelers will pay a premium for delivery.
“There may be value in having an item needed delivered to you at the gate — but you actually do pay a markup for that,” he said. “Whether someone is willing to pay $5 to have a $7 sandwich delivered is not evident — some would, but many wouldn’t. Airlines have shown that air travelers are increasingly price sensitive.”
Copyright 2017 Skift. All rights reserved. From http://www.skift.com. By Brian Sumers, Skift.
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