If you want to make your flight, then you need to arrive at the airport an hour or two before it’s scheduled to take off.
For those facing long flight times, you likely know that the food served on the plane isn’t going to be enough to fill you.
You may decide to eat beforehand at one of the many food kiosks or restaurants that the airport has.
However, with prices like $7.19 for a quarter pounder at McDonald’s, you may think twice about ordering food from an airport.
Here are 10 reasons airport food is expensive.
Why Is Airport Food So Expensive? (Top 10 Reasons)
1. High Rent
One of the reasons airport food is expensive is the high rent that the establishments pay for space at the airport.
Getting retail space in an airport is extremely competitive.
That’s because entrepreneurs know that if people are in one space long enough, they’re likely going to shop.
They might face a bout of boredom and decide to browse a store’s inventory.
Once they start browsing, it’s possible to make the sale.
Delays are another big chance for stores to make sales.
When someone’s flight gets delayed, they’re stuck in the airport even longer.
This usually means that they’re probably going to need to eat a meal.
Most flyers won’t want to leave the airport for fear that they might miss an announcement.
As such, they’ll choose to buy food from one of the restaurants inside the airport.
The demand is there, and since airport space is limited, the supply is usually low, too.
This means that almost everyone has a great chance of making sales.
The airport knows this, too, which is why it charges high rent.
Some airports will base their rent on square footage, but many others use a percentage system instead.
They take 10%–20% of the sales generated.
This can become a problem with restaurants because, with their other operating costs, it can be difficult to make a profit.
When an airport charges an amount based on square footage, the restaurant can sometimes have months that perform really well and allow them to put aside that money.
With rent based on percentages, they always have to pay a certain percentage of their sales, regardless of how much they make.
To maintain a profit, restaurants have to charge high prices for their food.
2. Commissions On Sales
For restaurants that get charged their rent by the square foot, some airports will charge them a certain percentage in commissions as well.
They’ll have to pay a certain amount back to the airport based on the number of sales that they make.
For example, an airport might require a 10% commission from their sales.
The restaurant then has to pay rent and commission to the airport.
This is most popular with kiosks or pop-up food vendors who don’t have a lot of real estate space.
Since they’re just a kiosk, the airport can’t get its money’s worth based on square footage alone.
They might choose to charge them a percentage of rent.
They might also choose to hit them with high commission rates instead.
This makes airport food expensive because restaurants face high fees to set up shop there.
While they may be taking in a large number of sales, their net profit isn’t always that high based on the chunk that the airport takes from them.
To keep their business alive, the restaurant has to charge higher prices.
Even if the airport takes out a portion of their sales, if they can earn high sales, then that amount can cover their expenses and ensure their workers can take home a paycheck.
Airport food is expensive because of the high commission percentages airports place on restaurants.
3. Delivery Expenses
Another operational cost that makes airport food more expensive is delivery expenses.
In a traditional restaurant outside of an airport, it’s easy for them to get their supplies.
Trucks can stop by either the front or the back of the restaurant and deliver their supplies directly to the restaurant.
It’s an easy process with little hassle.
It’s even easy for independent farmers to stop by with their wares.
That isn’t the case at an airport.
Due to high security at airports, suppliers have to jump a few hurdles to bring their supplies to the restaurant.
For one, they have to contend with airport parking.
This is difficult when you have tons of people coming into and leaving the airport every minute of the day.
Suppliers usually have to pay parking fees, too, since they’re not associated with the airport itself.
Then the supplier has to pass through security to get into the area where the restaurants are.
Even their crates and boxes will likely be subjected to some form of security check to ensure they’re not smuggling any unwanted items into the airport.
Once there, they can finally bring their supplies to the small and tightly-enclosed restaurant.
Clearly, the process is long and annoying.
Because of that, suppliers charge a high price to bring their goods to airport restaurants.
This takes another big chunk out of the restaurant’s profit.
There’s also a chance that they might not be able to get their supplies as often.
Airports tend to be out of the way since they need a lot of space for runways, so suppliers can’t always drive that distance during their regular delivery routes.
It costs them more money to head that far.
They add that to the amount they charge restaurants, too.
Airport food is expensive because the restaurants have to pay high delivery expenses to get their supplies.
4. Storage Rental Fees
Airport restaurants operate in tiny spaces.
They only have room for some of the cooking appliances and a little bit of storage space.
Kiosks have even smaller spaces.
Because of this, they don’t have a lot of room for storage to keep their supplies.
This forces the restaurant to either rent another space in the airport to hold their goods or find a storage system nearby that allows them to store their goods there.
This becomes expensive for a few reasons.
The first reason is the rental cost.
The restaurant will need to take on another monthly rental fee for storage.
Depending on how much storage space they need, this could become quite costly.
It also depends on who they’re renting from.
If the storage facility owner does a lot of business with restaurant owners, then they know how desperate those owners are to have space.
They can charge premium rental fees to make the most money, knowing that the restaurant is likely going to pay it.
If they’re the most convenient choice, then they can ask for a high rental fee.
Another reason it’s expensive is that it requires the restaurant to send employees out to get supplies when they’re running low.
This impacts the business because it means they’re one employee down.
It takes time for the employee to get the supplies, pass through security, then return to the restaurant.
Meanwhile, because they’re one employee down, the restaurant is unable to serve customers as quickly.
They might lose some if the line becomes too long and people don’t want to wait.
Those become sales they’ve missed out on.
Airport food is expensive because of the costs associated with needing to rent a storage space.
5. Background Checks And Employee Vetting
Security at airports is extremely tight.
Because of that, airports require restaurant owners to vet each of their employees with a background check.
A simple background check won’t do.
They need to dig deep.
After all, airports are the first and last defense against crimes like money laundering, smuggling, drug running, human trafficking, and an abundance of other crimes.
While most security concerns revolve around passengers, employees at the airport need the same level of security checks.
After all, they’re the ones in and out of the airport every day.
Restaurants have to pay for background checks for each new hire that they take on.
Since the turnover rate tends to be high in restaurants, the restaurant has to pay for background checks quite frequently.
Background checks cost as little as $20 for basic checks, but they can become more expensive when the background check is more extensive.
For example, they can cost as high as $100 for extremely thorough checks.
There are several different checks, too, that the restaurant will likely need to perform.
Some of those checks include:
- Criminal background
- E-Verify background
- Office of the Inspector General background checks
- Credit check
- Drug testing
- Professional license background checks
The most important for restaurant workers at an airport would likely be the criminal background check, the drug testing, and the e-verify background check.
The Office of the Inspector General’s background check is primarily for those looking to work in the medical field.
The Professional license background check is to check whether certain professionals like doctors and teachers have a license to operate.
The credit background check essentially looks into a person’s financial information to determine if they’ve committed any financial crimes as well as to determine their state of debt.
This information is particularly useful for restaurants if looking to hire someone to handle their finances.
Since most restaurants are just hiring line workers, they’ll need to pay only for a few of these background checks.
However, the sheer number of them adds to their operating costs.
Airport food is expensive because of the number of background checks that they need to pay for.
6. Turnover Rates
When a worker leaves a job, not everyone realizes that it costs the business money.
According to Work Institute, it costs a business up to 33% of the worker’s pay whenever they lose a worker.
That’s essentially 33% of that worker’s typical paycheck that the business loses each time someone leaves.
The loss of money occurs for a few reasons.
The first is that the restaurant becomes understaffed.
They’re unable to produce as quickly or as much as they used to.
This impacts how many sales they can make on a given day.
With less production, they’re not generating the same amount of money.
Another reason is the costs of hiring a new employee.
They need to pay for those background checks and new uniforms, and then they need to take the time to train the worker.
That means teaching them how to prepare the items on the menu, teaching them what’s on the menu, and how to work the register and other important tasks.
It can take a week or two before the new worker is able to fully replace the one that left.
That’s even more money the restaurant is losing in the meantime.
There are several reasons restaurant workers choose to leave.
Dealing with airport security every time they come into work is annoying.
They also have to pay to park at their workplace, albeit at a discounted rate.
If they’re not given a living wage, then there’s little incentive to stick around.
Since restaurants deal with high turnover rates, they lose a lot of money as a result.
Airport food is expensive because of high turnover rates at the restaurant.
7. Airport Parking
Restaurant employees at airports have to pay parking fees to work at the airport.
There isn’t a section of parking devoted to restaurant workers that enables them to have free parking.
While they do pay a discounted fee, they still pay parking fees just like visitors to the airport.
This cuts into the restaurant’s revenue because they usually have to cover those costs for their employees.
Not every restaurant does, of course.
Some rely on their employees to pay for their own parking.
Those that do pay for their employees’ parking can expect to pay a good chunk of money every month.
That’s because airport parking fees can be quite expensive.
Even if they get a discount, if the parking fee is already high, then their discount makes parking only a little less expensive.
Since restaurants usually have a few employees on hand, they have to pay for parking for all of those employees.
That can easily cut into their profits which affects their bottom line.
To cover that cost, airport restaurants charge higher prices for their food.
It helps them stay operational and pay for their employees’ parking which then allows them to park at the airport and work.
Airport food is expensive because restaurant workers have to pay for their own parking.
8. Street Pricing
Airports are aware that restaurants tend to set prices that are above street pricing.
Street pricing refers to the prices found on a typical street.
For example, if you were to walk downtown and step into a convenience store, you might find a bottle of water for $1.00.
That’s the street price for a bottle of water.
Restaurants typically charge higher than that, but there is a limit to how high they can set their prices.
In their agreement to lease real estate within the airport, the restaurant has to agree to limit how high above the street price they will go.
In most cases, airports put a 10% to 15% limit on how high restaurants can price their menu items.
Essentially, restaurants can’t put a price that’s more than 10% or 15% higher than the street price.
The problem with this is that it’s difficult to define what the street price is.
For example, if airport restaurants were to base it on the prices just outside of the airport, then their prices can become quite expensive.
That’s because restaurants just outside of an airport are also expensive.
They know that travelers are going to come hungry and will want to get food at the closest restaurant possible.
That enables them to put a high price on their menu.
Restaurants inside of the airport, thus, can set their own prices quite high since they’re still technically within the percentage that they agreed to with the airport.
If the street price refers to further down the street, where prices are lower, then this isn’t the case.
Airport restaurants would have to charge lower prices.
Airport food is expensive because of the difficulty in defining street prices.
9. Construction Costs
When restaurants get the green light to take over a retail spot in an airport, they’re left to pay the construction costs.
They need to build their kitchen and the eating area.
A lot of thought has to go into the construction of a restaurant because it not only needs to look great, but it also needs to function.
When a restaurant is eye-catching, it will attract more people to it.
However, if it’s too bulky or isn’t streamlined, then it doesn’t function well and customers will take notice.
The problem with construction costs at an airport is that it’s extremely expensive.
The national average for building a retail space is between $100 and $400 per square foot.
The cost of building a restaurant in an airport is $1,000 to $1,400 a square foot.
It’s extremely expensive to build a restaurant in an airport.
That’s debt that the restaurant goes into before it even opens its doors.
It has to charge high prices to get out of debt as soon as possible.
That’s because it’s responsible for paying rent to the airport among all its other costs.
Airport food is expensive because of the debt and costs incurred during the construction of the restaurant.
10. Food Costs
A final reason airport food is expensive is the increase in food costs.
Thanks to COVID-19 and an abundance of other factors affecting the global supply chain, food costs are high.
Even foods that are traditionally cheap are becoming more expensive.
Everything, from droughts and wildfires to labor shortages, is impacting the price of food.
Since restaurants take in a lot of food, whenever food costs rise, their prices also have to increase.
That’s because they have to cover the cost of importing food to their restaurant.
If they’re unable to do so, then they don’t have any money to bring in more food, which means they have nothing to serve their customers.
Airport food is expensive because of the increase in food costs.
When shopping for food at an airport, you’ll quickly realize the inflated prices.
There are several reasons behind the higher prices, however, that push the restaurant to set high prices.
Everything from airport rent to higher food costs impacts their operational costs, which also impacts the restaurant’s prices.