Food and Dining Companies Smile as Traveler Numbers Rise
Food Companies Gain Attention as New Growth Engines
Sales Expansion and Brand Enhancement Effects
With the upcoming May golden holiday, which can last up to six days, the number of passengers using Incheon International Airport is expected to increase. As a result, food companies operating concession businesses (food and beverage outsourcing) are quietly optimistic. These companies, which have been entrusted by Incheon International Airport Corporation to operate food courts, are either bringing in their own food and beverage franchises or running rental stores. They are expected to fully enjoy the benefits of this "special commercial zone" during the golden holiday.
According to Incheon International Airport Corporation on May 1, the number of passengers traveling internationally through Incheon Airport during the holiday period from this day until May 6 is expected to reach 1,482,274. By taking a day off on May 2, workers can enjoy a maximum six-day holiday that includes Labor Day (May 1), the weekend (May 3-4), Buddha's Birthday (May 5), and the substitute holiday for Children's Day (May 6). This has led to a sharp increase in outbound travelers.
Expectations are also rising among Incheon Airport concession operators. The concession business involves operating and managing food and beverage outlets in locations such as airports, train stations, hospitals, and highway rest areas.
Currently, SPC Group, Ourhome, Lotte GRS, and Pulmuone Food & Culture are in charge of concession operations at Incheon Airport. Since the boundaries between dining, catering, and rental revenues for each company are unclear, the exact market size is not calculated, but SPC and Ourhome are considered the dominant players in the market.
SPC Group has been operating food and beverage outlets as the second-phase concession operator for Incheon International Airport Terminal 1 since 2007. Currently, SPC operates nearly 40 stores in T1 and T2. Ourhome, which began its concession business in 2008, now operates 14 stores at Incheon International Airport, including T1 since 2015 and T2 since 2018.
Pulmuone Food & Culture operates five locations in the T1 lounge and five in the T2 lounge at Incheon Airport. Lotte GRS, which entered the concession market in 2016 with the food court business at Kangdong Kyunghee University Hospital, established its first presence at Incheon Airport in 2018. It aims to operate 49 outlets by 2025.
A view of 'Tasty Ourhome Ground' inside the Transportation Center of Incheon Airport Terminal 1. Ourhome
The concession business is regarded as a new source of revenue that can replace the saturated domestic dining-out market. When air travel demand plummeted due to the spread of COVID-19 in 2020, airport concession sales dropped by more than 80%, creating a crisis. However, it is known that performance fully recovered starting in 2023. Ourhome and Lotte GRS saw their concession business sales increase by 20% last year alone, while Pulmuone also achieved 16.5% growth. SPC's figures are undisclosed.
The concession business has the advantage of being located in high-traffic areas, making it less susceptible to economic fluctuations and allowing for stable revenue. In addition, restaurant companies can leverage their brand power to enhance recognition. About half of the concession outlets feature in-house brands, while the other half are external brands, and this can be expanded as a brand incubator for nurturing new franchise brands. Lotte GRS has already introduced its chocolate brand 'Chocolat Palette' at Incheon Airport T2 to test the brand.
For catering companies, there is an opportunity to increase sales by linking with their food materials business, which is a back-end operation. Airport food courts are also heavily used by foreign tourists, which can help foster a positive perception of K-food.
An industry insider said, "There are not many companies in Korea that can participate in airport concession businesses due to the minimum bid requirement. However, while the restaurant market outside the airport is seeing a tightening of consumer spending, demand for airport restaurants is expected to surge, so the growth trend in concession business sales is likely to continue."
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