BUILDING FOR THE FUTURE

CONCESSION PROGRAM DEVELOPMENT

SEPTEMBER 1, 2016

AGENDA

Welcome and Introductions

Airport Growth and Trends

Concessions Program Development

Concessions Leasing Plan

Minority Business Participation

Being a Concessionaire

Questions & Answers

Networking

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AIRPORT GROWTH AND TRENDS(WHAT IS GOING ON @ DEN?)

NEIL MAXFIELD

SENIOR VICE PRESIDENT - CONCESSIONS

Sources: Colorado, Department of Local Affairs, State Demography Office; Colorado Tourism Office / Data Prepared By: Ricondo & Associates, Inc.

101,000 additional people in Colorado in 2015

Ranked 2nd in the nation for population

growth

Crowded Colorado in 2040:

+2.3 million people

+1.1 millionpeople in Denver metro in 2040

71.3 million visitors to

Colorado in 2014

38%growth in annual tourism since 2009

DENVER AND COLORADO ARE GROWING

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DEN IS GROWING

Seat Capacity: CY 2016 vs. CY 2015

• 4th largest station • 199 average daily

departures• DEN has the most

average seats per flight among their top 20 stations

• Filling in some gaps left by Frontier Airlines at large and mid-sized cities

• Network shift from IAH to DEN and SFO

• 50% less 50-seaters by 2020

• Rapidly adding Skywest-operated 76-seat E-175s

• Purchased and ordered 737-700’s and -900’s, 777’s, 787’s and A350’s

• DEN accounts for 47% of flights (This was 99% in 2009)

• Cut over 30% of DEN flights in 2015 but slowly adding back cities

• Transitioning to larger A321 aircraft on several routes

+9.7% +8.1%+7.4%

Overall Airport YTD Through April:Passengers: 6.0%

Capacity: 7.5%

175 destinations

20 international

cities

8 countries

17small communities depend on our air service

Data Prepared By: Ricondo & Associates, Inc.

• DEN’s geographic location is favorable for domestic connections and access to unique smaller destinations

DEN’S UNIQUE MARKET

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PASSENGER FORECAST

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RECOGNIZE GENERAL UPWARD TREND…REMAIN FLEXIBLE AND RESPONSIVE

Great Recession

DENOpens

Early 2000s RecessionSept. 11th Attacks

Original Frontier Airlines Ceases

Operations

Southwest Launces Service

Continental Dismantles Denver Hub

New Frontier Launches

Colorado Recession

What’s Next?

Data Prepared By: Ricondo & Associates, Inc.

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MARKET SHARE BY AIRLINE

2015-2040 CAGRUnited Airlines: 2.47%

Southwest Airlines: 2.44% Frontier Airlines: 1.71%

Other Airlines: 2.22%

Other U.S. AirlinesMainline:AlaskaAmerican Delta jetBlueSpirit

Commuter:Aerodynamics, Inc.Denver Air Connection Great LakesPenAir

Other Foreign Flag AirlinesAeromexicoAir CanadaBritish AirwaysIcelandairLufthansaVolaris

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TRANSFER VERSUS O&D PASSENGERS

Original Airport Design: 60% Connecting and 40% O&D

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TYPES OF PASSENGERS

Impact the Following Facilities• Gates• Concessions• Airfield Capacity Impact the

Following Facilities• Roads• Parking• Rental Cars• Ticketing• Security• AGTS Train• Baggage Claim• Concessions• Gates• Airfield Capacity

35% of all passengers in 2015 ORIGIN &

DESTINATION (O&D)

CONNECTING

65% of all passengers in 2015

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GATE UTILIZATION

gates

• 107 contact gates

• 5 new gates added Nov 2014

• All available gates are leased

CONCESSIONS PROGRAM DEVELOPMENT

NEIL MAXFIELD

SENIOR VICE PRESIDENT - CONCESSIONS

DEN HISTORICAL SALES

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$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

2011 2012 2013 2014 2015

Mill

ion

s

Food & Beverage Retail (Includes Spa Services)

6.0% Annual Growth

4.2% Annual Growth

DEN HISTORICAL SALES PER ENPLANEMENT

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$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

2011 2012 2013 2014 2015

Food & Beverage Retail (Includes Spa Services)

5.4% Annual Growth

3.7% Annual Growth

DEN HISTORICAL SALES PER ENPLANEMENT

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

2011 2012 2013 2014 2015

Food & Beverage Sales per Enplanement

DEN Comparative Airports

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

2011 2012 2013 2014 2015

Retail Sales per Enplanement

DEN Comparative Airports

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COMPARATIVE CONCESSIONS AREA

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ORD CLT MDW LAX ATL DEN SLC DFW PHX SEA EWR IAD SFO DTW MSP IAH LAS BWI JFK PHL MCO MIA

Are

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(sq

. ft.

)

2014 Retail Concessions Relative Area

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COMPARATIVE CONCESSIONS AREA

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MDW ORD CLT ATL LAX SFO SEA IAH IAD DEN DFW SLC BWI LAS PHL MIA JFK PHX MCO DTW EWR MSP

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(sq

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2014 Food & Beverage Concessions Relative Area

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COMPARATIVE CONCESSIONS AREA

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MDW ORD CLT ATL LAX DEN SEA SFO SLC DFW IAH IAD PHX BWI LAS EWR DTW JFK PHL MSP MCO MIA

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(sq

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2014 Relative Area

Food & Beverage Retail

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DEN SPACE REQUIREMENTS

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Current Program176,000 SF

2030 Program Requirements380,000 SF

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Concessions Hierarchy

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MEETING THE NEED: GATE EXPANSION

MEETING THE NEED: GREAT HALL

– Provides ±75,000 sf airside

space

– Primary market is O&D

passengers

– Focus on high-profile,

destination shopping and

dining concepts

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MEETING THE NEED: EXPAND & REPURPOSE

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MEETING THE NEED: EXPAND & REPURPOSE

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EXAMPLE DEVELOPMENT: CONCOURSE A

A Core Mezzanine LevelA Core Concourse Level

In-Fill and Create New Food Court

Create Retail District Duty Free + Higher End

Create Retail Market

DevelopFrontier Office to

2-Level Restaurant

Create Retail District:Popular-Priced and Services

Add Vertical Circulation

Mezzanine Access to2-Level Restaurant

Develop Mezzanine:Chef-Inspired Restaurant

and Marché

CONCESSIONS SPACE DEVELOPMENT BENEFITS

Enhance Customer Experiences

Create Sustainable Business Opportunities

Improve Concessionaire Economics

Increase Airport Revenues

Lead – not follow – market forces & trends

Curate Sense of Place

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MAXIMIZING SALES POTENTIAL

$310.1

$47.4

$135.6 $493.2

$58.3 $551.5

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$100.0

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$600.0

2015 Actual Enplanement Growth2015-2025

Program Expansion 2025 Projection Enplanement Growth2025-2030

2030 Projection

Mill

ion

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Sources of Projected Sales Growth2015 Actual to 2030 Projection

(2015 Dollars)

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CONCESSIONS LEASING PLAN

NEIL MAXFIELD

SENIOR VICE PRESIDENT - CONCESSIONS

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Near Term 2017 2018 2019 2020 2021 2022

No

. of

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its

Expiration Year

Cumulative Lease Expirations

RE-LEASING REQUIRED AHEAD OF EXPANSION

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RE-LEASING REQUIRED AHEAD OF EXPANSION

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2016 Q4 RFPs: CONCOURSE C

RFP Package 2:Branded Coffee

RFP Package 3:News/Convenience

RFP Package 1:Branded Coffee

(new space)

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2016 Q4 RFPs: CONCOURSE B

RFP Package 2:Branded Coffee

(new space)

RFP Package 5:Casual Dining

RFP Package 3:Expanded

News/Convenience

RFP Package 1:Branded Coffee

(new space)

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2016 Q4 RFPs: CONCOURSE A

RFP Package 1:Branded Coffee

(new space)

RFP Package 2:Branded Coffee

(new space)

RFP Package 4:Expanded

Casual Dining

2016 Q4 RFPs

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RFP PACKAGE No. OF LOCATIONS

SQUARE FEET (approx.)

Package #1 – Branded Coffee 3 900

Package #2 – Branded Coffee 3 1,346

Package #3 – News & Convenience 2 1,907

Package #4 – Casual Dining 1 3,895

Package #5 – Casual Dining 1 3,572

RFP SCHEDULE

Outreach Events – Phase 1 2016 Q3

Issue Phase 1 RFPs October 2016

Anticipated Phase 1 RFP Due Date December 2016

Anticipated Phase 1 RFP Awards 2017 Q1

Outreach Events – Phase 2 2017 Q1/Q2

Issue Phase 2 RFPs 2017 Q2

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MINORITY BUSINESS PARTICIPATION

VICKI PADILLA

ACDBE PROGRAM ADMINISTRATOR

What is ACDBE?

Airport Concessions Disadvantaged Business Enterprise

Final rule for Airport Concessions (49 CFR, Part 23)

Became effective in 2005

Its purpose is to help firms compete and participate in

concession opportunities, but does not necessarily guarantee

award of a contract.

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ACDBE – Program Objectives

To ensure non-discrimination in the award and administration of

opportunities for concessions by airports receiving DOT financial

assistance;

To help remove barriers to the participation of ACDBE’s in

opportunities for concessions at DIA;

To create a level playing field on which ACDBEs can compete

fairly for opportunities for concessions.

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ACDBE - Who Should Apply?

Concessions operators (food & beverage, retail, services to

travelling public)

Firms that provide goods or services to concessionaires in the

course of operating the concession

Food & beverage distributors

Retail goods

Paper products

Janitorial

Legal

HR/employees

Auto related (car rental and ground transportation)

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Why should I apply for

ACDBE certification?

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ACDBE – Why?

Visibility

Increased opportunities

Supply to non-ACDBEs

ACDBE operator

Growth

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ACDBE Requirements

Ownership

At least 51% of the firm’s ownership must be managed and controlled by members of socially and economically disadvantaged groups. (Woman, Hispanic, Asian, Black, Native American)

Business Size

$56.42M - F&B, retail, services and suppliers (3-year average gross receipts)

$75.23M – Car rental companies (3-year average gross receipts)

$1B in assets – Banks & financial institutions

1,500 employees – Pay telephones

350 employees – Automobile dealers

Personal Net Worth

$1,320,000 cap

Excludes primary residence

Excludes ownership interest in applicant business

Time in Business

No specific time requirements, though must be actively in business

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ACDBE – Certification Mistakes and Pitfalls

Incomplete information

You must answer all questions and upload documentation, even if

n/a

Insufficient documentation of ownership acquisition

By-Laws/Operating Agreement issues

Insufficient management, control, and/or voting rights

Lack of independence

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ACDBE Goals

Airport Goal

Individual Concessions Goals

Availability of certified firms

Goals on similar concessions

Overall airport goal

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ACDBE Goals Compliance

Goals can be met by:

Concession owner/operator ACDBE certified

Non-certified owner obtaining goods and/or services from

ACDBE certified firms

Agreements entered into by two or more firms

(joint ventures, management agreements, etc.)

***ACDBEs are encouraged to work together

to operate concessions***

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ACDBE Certification for Counting

Must be ACDBE certified in the state of the opportunity by one of the

authorized certifying entities of the state (out of state firms must be

certified in home state prior to applying for certification in new state)

Must be ACDBE certified in the state of the opportunity at the time the

proposal is submitted

Certification must be updated annually and renewed every three years

Participation counts through end of the original contract term even if

the ACDBE firm graduates from program during the original term

Participation ceases to count if revoked or de-certified for any other

reason during the term of the contract

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Apply for certification NOW!!

Look for partners and suppliers NOW!!

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Please refer to

49 C.F.R. Part 23

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Suggestions

Register to be notified of opportunities

Attend pre-proposal conferences

Download planholders and attendee lists

Attend trainings and networking events

Contact current concessionaires

Read “Resource Materials”

Check “Future Opportunities” frequently

http://business.flydenver.com/bizops/concessions.asp

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Tenant Finish / MWBE Goals

MWBE Requirements

An MWBE goal will be assigned, a portion of which must be

obtained through professional design

MWBE Commitment Form must be submitted with proposal

Successful proposer must contact DSBO within 15 days of

notification to discuss MWBE requirements

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References and Contact Information

http://business.flydenver.com/bizops/smallBus.asp

ACDBE Program Administrator ACDBE Program/Tenant Finish ACDBE Certification

Vicki Padilla LaQuisha Shaw Alicia Sewell

(303) 342-4358 (303) 342-2204 (303) 342-2185

vicki.padilla@flydenver.com laquisha.shaw@flydenver.com alicia.sewell@flydenver.com

49 C.F.R. Part 23:

http://ecfr.gpoaccess.gov/cgi/t/text/text-

idx?c=ecfr&sid=b880432dedbe5f0d12a2409fe5535503&tpl=/ecfrbrowse/Title49/49cfr23_main_02.tpl

JV Guidance:

http://www.osdbu.dot.gov/documents/pdf/dbe/JointVentureGuidance-final.pdf

BEING A CONCESSIONAIRE

NEIL MAXFIELD

SENIOR VICE PRESIDENT - CONCESSIONS

HOW TO PARTICIPATE

Direct Lease

Sublease to a Prime Concessionaire

Joint Venture

Licensing

Vendor

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AIRPORT BUSINESS CHALLENGES

Scaling Up

Large Investment

Small Spaces

Operating Hours

Operating Costs

Delivery/Storage

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AIRPORT BUSINESS CHALLENGES

Security

Employee Badging

Employee Parking

Customer Dwell Time

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WHAT TO DO NEXT?

Find Resources

Register on Website

Division of Small Business

Opportunity office (DSBO)

DEN Commerce Hub

Learn about opportunities

Attend outreach sessions

Begin networking /

keep networking

Start certification process /

update certifications

Start business planning

Your unique concept

Your unique approach

Arrange financing

Start designing

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WHAT TO DO NEXT?

Start thinking about your proposal

Describe your experience

Describe your concept

Why is your concept best for DEN

How you will manage your concession

Meeting the ACDBE participation goal

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QUESTIONS?

THANK YOU FOR YOUR INTEREST

FOR MORE INFORMATION

– Denver Community

Outreach

– 9/1; Renaissance Hotel on

Quebec Avenue

Contact

Neil MaxfieldSenior Vice President – Concessions(303) 342-2574Neil.Maxfield@flydenver.com

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