Analysis and discussion of issues that impact business

If you build it, they will come, I guess.

This story from PRNewswire and Yahoo is following an interesting business trend. And one that seems to make sense.

Airports are becoming profitable business enterprises based on the increasing revenues generated by non-aeronautical commercial activities, in particular, retailing, car parking and catering. This trend is opening up opportunities for airport management firms and other companies keen on expanding their businesses in the catchment area of airports.

It makes sense from a couple of perspectives, one good, one not-so-good.

Let's hit the bad news first. It's called the "tourist trap". Businesses can set almost any price point for their products or services because where else can you go? It's just like paying outrageous prices for stadium or amusement park food. You're stuck.

One more issue that irks me a little is this:

Currently, due to the demand from air carriers for the reduction of charges and the unwillingness of governments to offer subsidises, airports can no longer rely solely on aeronautical revenues to generate the resources needed for infrastructural improvements.

From what this says, it's because of the "unwillingness of governments to offer subsidises" that the private sector has to take over. Is it possible that government subsidies have (or could have) stood in the way of sound business people and strategies? A point to ponder, I hope.

Now, the good news is that businesses are recognizing airports as centers of commerce.

The growing diversification of airports' revenue sources reflects their stronger integration into the economies in which they operate. Airports have become attractive business centres and are supporting economic growth in the areas where they are located.

For the bright entrepreneur, here could be an opportunity.

Ultimately, the challenge will be to build an organisation able to achieve better economic returns. Success in a globalised and highly competitive airport industry will require marketing and new business development skills beyond those that currently exist in the industry.

Sounds like opportunity knocking to me!