The cost of airport food is soaring.
Travelers passing through airports tend to expect to pay more for basic items such as water bottles — but why is it so much more expensive?
A reporter for USA Today shared in a column that she purchased a 24-ounce flip-top bottle of Smartwater and a snack-sized bag of Snyder’s of Hanover Mini Pretzels for a total of $9.47 at a Hudson News at John F. Kennedy International Airport. The water bottle cost $4.99 and the pretzels cost $3.99.
In comparison, the 7-11 in her neighborhood in Queens sold the same water bottle for $3.29 and the pretzel options ranged from $1.69 for store brand to $3.69, though they didn’t have the exact pretzels she bought at JFK Airport.
Rules regarding pricing vary from airport to airport, and there are no national regulations for how airport vendors set their prices, but overall, many airports mark up their prices to counterbalance other costs.
“To offset higher operational costs, many airports add a 10% to 15% margin on local street prices, reflecting the higher costs of operating in secure, high-traffic environments,” the Port Authority told USA Today in a statement.
Operational costs include higher rent, security, utilities and staffing, which is more complex and expensive than at smaller airports of off-airport properties, as well as guaranteed cost-of-living increases for its on-property minimum wage workers, the agency explained.
“To help businesses manage rising operational costs, the Port Authority also revised its Concessions Street Pricing Policy, allowing vendors to charge up to 15% above local street prices for comparable products, along with an optional 3% surcharge for employee benefits and retention programs.”
The up-charge is known as “street pricing plus,” which can be confusing, particularly when local regulations don’t specify what is considered “street pricing.
“If language is vague, that gives a lot of leeway in interpretation for a vendor to decide what is comparable. They need to lay out strict standards for what they mean by comparable prices,” Alex Jacquez, chief of policy and advocacy at the economic think tank Groundwork Collaborative, told the outlet,
New York’s Port Authority said that its vendors’ prices are based on audits and annual market analysis by Deloitte — which allegedly compares prices at the airport to prices for similar items at locations around the metro area. The prices are then monitored and approved by managers at the agency.
While Port Authority is just one example of this price markup, as a major airport operator, the way they operate is similar to many other facilities and airports across the country.
However, advocates for more transparent pricing argue that these operators are “not dumb” and are well aware that it’s hard to get food and beverages past airport security, so passengers have to get their fix from these airport vendors.
“They know exactly what kind of environment they have set up in the airport,” Jacquez explained. “There’s no competition in the space. That gives the venue a considerable amount of pricing power.”
Jacquez shared that the strict street pricing used at Portland International Airport in Oregon is one pricing model that he believes works well.
The Portland airport doesn’t allow its vendors to charge more than the off-airport rates, and local vendors “are all clawing to get inside the airport.”
Plus, a Port of Portland spokesperson told USA Today that this rule also makes the airport feel like just another part of the city.
“By focusing on local shops and restaurants, and having those businesses charge the same as they would outside the airport, travelers get an authentic experience of what our region has to offer,” the airport operator said.
“Plus, we’ve seen that when people aren’t feeling price gouged, they’re willing to spend more.”
More often than not, travelers don’t really have a choice but to pay more than they would outside of the airport, but there are usually deals to snag.
According to the Port Authority in New York, their vendors are required to offer at least some essential goods at a discount.
“Concessionaires are required to offer affordable options, such as $2 bottled water and value meals, as part of the ‘We Value You’ Program,” the agency said in a statement.
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