The Ontario International Airport Authority Commission approved a multi-year agreement with a Hudson Group-led consortium to upgrade retail concessions at Ontario International (ONT). The airport’s goal is to improve shopping options for travelers and at the same time generate significant revenues.
The eight-year lease agreement with Hudson Group and HG ONT Retailers JV requires that they make a capital investment of at least $2.4 million to rebrand and remodel its retail operations. Hudson will also pay rent calculated as a percentage of gross sales, the commission said.
The concessionaire will pay the airport authority 12 percent on sales in its specialty stores and electronics category; 16 percent on sales in the news and gifts category up to $10 million per year, increasing to 18 percent on sales greater than $10 million per year; and 12 percent on sales in the duty-free category up to $10 million per year, rising to 18 percent on sales of more than $10 million per year.
With the new concepts and rent payment structure, the airport authority anticipates rent payments will increase by as much as 70 percent over the term of the new agreement. In the first year after the retail improvements are completed, the concessionaire expects to generate an additional $500,000 in rent to the airport authority.
Following the remodel, the retail concessions will include Hudson Group’s flagship brands Hudson, Tech on the Go, and Ink by Hudson, as well as Daily News, Ontario Provisions, and Cali Market.
“Since the Ontario International Airport Authority assumed control of our airport last year, the commission and staff have worked tirelessly to improve the customer experience at the airport, and an important aspect of that experience is the retail offerings available to our passengers,” said OIAA Commission President and Ontario Mayor Pro-tem President Alan D. Wapner. “With new domestic and international air service, more ground transportation options and the coming remodel of airport concessions, our airport is now a gateway befitting the Southern California region.”