McCarran to revamp some of its retail space

With its captive audience of about 40 million people a year, McCarran International Airport is popularly regarded as an arena where retailers can set the shop on auto pilot while raking in profits.

But the near-term outlook laid out in airport management’s specialty retail blueprint indicates that concessionaires face a lot of work – just like their counterparts in regular shopping centers. The plan, approved Tuesday by the Clark County Commission, identified six shops to be eliminated when leases expire in the next couple of years, with just three new ones brought on line.

Since passenger traffic started to drop five years ago, and McCarran retailers felt the pinch, management has followed a policy of closing locations that flourished in better times to boost the prospects for those remaining.

The plan also designates 11 vacant spots spread across Terminal 1 that will be opened for concession bids only if passenger counts start to grow. The outlook through the first half of next year shows a continuation of the slight drops that started in midyear.

In addition, four of the new shops would hinge on a pair of still-uncertain moves that would shift US Airways from Concourse A to Concourse D, and Allegiant Air in the opposite direction.

More certain are the 15 locations designated for locals that will expire through October 2015. Although these bids would be open for anybody with a Las Vegas residence and business license, Clark County Aviation Director Randall Walker said the evaluation system awards points to people with airport retail experience. This gives incumbents a head start against a neophyte, although numerous other factors come into play, including product mix and financial projections.

At the end of the airport’s fiscal year on June 30, 32 of the 62 specialty retail locations – excluding restaurants, bars or newsstands – were allocated for locals, while 16 of the 30 set aside for national brands were run by locals.

"I’ll match this record against any airport in the country," Walker said.

Because many airports are owned and operated by political bodies, local retailers often have an advantage. On Wednesday, for example, Los Angeles World Airports emphasized that 22 of the approximately 50 retailers and restaurants in the expanded Bradley International Terminal were Los Angeles brands.

But Walker noted that when a lease expires, it’s desirable to boost the average sales from the location, whether with the incumbent or a newcomer.

During the first 10 months of this year, specialty retail rents, based largely on sales performance, rose 4.6 percent even though the passenger count went up only 0.6 percent.

The airport’s most recent annual audit, covering the year ended June 30, noted that rents rose in part because of "the continued introduction of nationally branded specialty retail stores."

However, Walker said he does not believe that setting aside places for locals leaves money on the table that could go to covering airport operations.

"It’s the way retail centers work, by signing a mix of national brands and locals," he said.

Contact reporter Tim O’Reiley at toreiley@reviewjournal.com or 702-387-5290.