Miami hopefuls undaunted by high rent demands

Gavin Lipsith

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International operators eyeing Miami International airport's duty-free contract have told RavenFox.com that they are willing to put aside concerns over onerous terms

Travel retailers preparing bids for the Miami International airport duty-free contract have told RavenFox.com they are unlikely to be discouraged by onerous terms. The contract has drawn interest from several international operators, including DFS Group, Aer Rianta International, Brasif, SMT Puerto Rico, Duty Free Americas, Dufry Group and The Nuance Group.

Although some of the interested parties have voiced concerns over high rents and the disruption to passenger flows caused by the airport's development plans, many have claimed that they will probably submit bids before the March 18 deadline.

Said one operator: "The current shops are poorly located, and determining which passengers we will be serving at which shops will be very difficult given the airport's ongoing expansion and the disruption that it will cause on some of the concourses. It is also unclear when certain spaces will be made available. The rental demands are high, and we will be considering our next move carefully. But we are likely to make a bid."

Another retailer concurred, adding: "Despite the terms and the amount of investment needed as a result of the expansion plan, Miami is a valuable strategic location and the length of the [10-year] contract means there should be enough time to make good returns."

The Nuance Group North America vice-president John Menchella confirmed that the company would be bidding aggressively for the concession. "In Miami I think it is a matter of patience," he said. "There is strong potential there and the airport has a very ambitious view of the future. The commercial department is very experienced and has listened to the industry's viewpoint, and I think it is a good opportunity for a retailer prepared to make the effort and stick with it."

The current duty-free contract, operated by DFS Group-led Miami Airport Duty Free Joint Venture, expires in November this year. The airport is likely to confirm the winner of the new contract in July after presenting its initial decision to the Miami-Dade county board of county commissioners in May. The contract, which runs for 10 years with two one-year extension options, covers 16 outlets totalling 42,000sq ft (3,903sq m).