FAB 2024
Stepping up the game in airport dining
Tom Fricke, Chairman of North American travel restaurateur OTG, brought fascinating perspectives to the stage in an interview with The Moodie Davitt Report Founder & Chairman Martin Moodie, as he reflected on his return to the airport food & beverage industry after a ten-year hiatus.
The former HMSHost President and CEO gave his thoughts on a range of subjects including the impact of COVID-19, balancing the use of technology and human interaction in airport restaurants and the importance of communicating value to passengers. Fricke took up his new role (also serving as OTG interim CEO) in January this year after a five-year spell leading well-known US gastropub chain Bar Louie.
He said: “I hadn’t been in LaGuardia Airport in ten years, and when I flew in for my first meeting at OTG I couldn’t believe what they had done at the airport. I remember from the past, LaGuardia made me think of low ceilings, low light, big crowds, a sort of maze.
“And you go in there today and it’s just unbelievable what they’ve been able to do; it is completely transformed; the commercial space is terrific. That trend will continue across US airports; there’s a lot of renovation happening. And that puts pressure on airport concession programmes [to produce an F&B offer to match], we are going to have to keep thinking how we evolve even further from where we are today.
OTG Chairman Tom Fricke reflected on his return to the airport F&B industry after a decade away
“We have to step up our game – we have to deliver concession programming that matches what the airports are doing, as they continue to try and be competitive in the US market.”
Giving his view about recent airport F&B concession changes, Fricke said: “The recovery from COVID has been terrific. I do worry that costs have escalated and the P&L is a lot harder now than it was when I was in the industry with HMSHost, but the airport F&B sector has really moved on from where it was.
“When I go out into the airports today, I see fewer international [F&B] brands, which are still important, but I see far more local. And as we look at RFPs, the demand for local just keeps going up and up. We are going to continue to see that mix shift towards local and proprietary brands; I think it’s a good one and the customers seem to want it.”
Fricke noted OTG now has executive chefs in each of its airports, whereas this was an experimental development a decade ago. “It’s a requirement now,” he said. “In many of our airports we have multiple executive chefs, because the culinary content is becoming more complex. We have steak houses now that are offering steaks at US$50 price points, and the guests love them – we’re getting great feedback on it.
“If you go back to 2012 and you told me that we’re going to have US$50 steaks in an airport I would have laughed at you.”
Fricke acknowledged great advances in the use of technology but spoke at length about his belief that interacting in a human way with guests should be of paramount importance.
Post-COVID, he highlighted the need for a shift back towards personal service or “simply saying hello” and simple touches like a menu people can hold as opposed to only using QR codes [he cited an FSR study which suggests 85% of restaurant customers want the return of paper menus].
He explained: “That’s where you learn the most about your guests [when you speak to them]. That’s where you learn how they like your offering, what they feel about your price points, how the chef is doing that day, what they think of menu changes – that’s been lost. We are working very hard to regain that guest connection.”
Tom Fricke: "We are going to continue to see the mix shift towards local and proprietary brands"
Fricke also spoke of the importance of communicating value in the F&B offer to airport passengers, something he sees as often lacking in the industry. He commented: “When I joined HMSHost, I kept hearing about this great airport F&B industry because you have a captive customer. To me, that is like fingernails on a chalkboard. Our guest is captive at the airport terminal if they want to get on an airplane; they are not captive to the dining and the retail experience.
“I think you have to be constantly talking to your guests to get their feedback and also to let them know the things you’re doing for them, what you offer and the value you’re presenting to them. I’m very passionate about that.”
OTG was acquired earlier this year by funds managed by Oaktree Capital Management and Centerbridge Partners. Fricke described the buyers as “great investors with domestic and international airport experience that are taking a long-term view”.
Fricke, who was instrumental in the appointment of new OTG CEO Jeff Yablun earlier this year, commented: “Jeff and I are getting a handle on how we elevate the guest experience so we can focus on expansion. When we get that right the expansion opportunities are going to be terrific. One of our long-term challenges is going to be what’s the next disruption because we believe we can still be disruptors, but still deliver against that guest experience.
“It’s a great time to be in this industry. There are challenges ahead, but this is a very exciting time to be part of airport food & beverage.”
FAB eZine
August 2024
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