You can tell passengers to bring sandwiches and drinks from home; you can even recommend they eat before leaving for the airport so they won’t be hungry while waiting for their flights to take off. You can even bring a few snacks in your carry-on bag to calm the hunger pangs before the meal you get on the plane (if you’re lucky) – but still, many travelers eat and drink at the airport, even though in many cases the prices there are much higher than they would pay for the same food anywhere else in the country.
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Last week we toured the food and beverage shops at Ben-Gurion International Airport. As was true for every day in August, the airport was packed with travelers – and there were long lines of people waiting to buy at the food chains and order coffee, sandwiches, as well as something sweet for the children.
“It’s hard to get organized with the children and drive with them to the airport, and I need to prepare food too? I’d rather buy there,” said one passenger, who was holding two bottles of mineral water and two sandwiches, which together cost him more than 50 shekels ($13), even before they left Israel.
Everyone knows that food and drinks are more expensive at airports than those you can find in town. It is true in Israel and all over the world: This is a captive market, and the prices climb. We see the same thing taking place in hospitals, movie theaters and anywhere else the customer has nowhere else to turn and buy at a cheaper price.
The question is how much higher the prices are at the airport. As a result of a protest over the high food and beverage prices at Ben-Gurion, as well as Knesset committee sessions on the matter, a year ago the Israel Airports Authority published new instructions for future retail lessees – and so far only two franchisees are operating under the new rules: Ilan’s Coffee in the Buy and Bye Mall before passport control and in the duty free area in the departures hall; and Café Café in the mall.
The new lease terms require that the target price for coffee be 25% lower than in the past. In the duty free area, a regular espresso should cost up to nine shekels a cup, a small cappuccino not more than 14 shekels, a butter croissant 14 shekels and a bottle of mineral water 10 shekels. In the mall, where both passengers and anyone else can buy, the new tenders set the maximum prices somewhat lower: up to 8 shekels for a cup of espresso, 12 for a small cappuccino, a croissant for 12 shekels and a bottle of water for eight shekels.
In addition, the minimum payments to the IAA required in the tender for coffee shops was reduced by about 50% compared to previous tenders; and it was decided that the options to extend the franchises for those already operating at the airport would not be exercised – and instead new tenders would be issued. In these new tenders a basket of cheaper items would be offered. An additional price oversight mechanism was also established as part of the contracts with the new franchises in the food service business. These prices would be indexed to the restaurant price index published by the Central Bureau of Statistics, and only if this index rose by 5% or more would the IAA allow its franchises to raise prices.
Price supervision does not apply to most stores
One of the major changes set in the new tenders was a section stating that chains would not be allowed to sell food and beverages at their airport stores at a price more than 10% higher than the prices in the chain’s other branches outside the airport. The problem is that for now, this only applies to two of the chains, Ilan’s and Café Café.
The biggest price differences between the airport coffee shops and the same chain’s stores in the cities is for Aroma and Cup O’ Joe (Café Joe). The price differentials for these shops are in the 20% to 30% range, because they are still operating under the old tender conditions. The chains of course blame these old conditions, with their higher rents and payments to the IAA, for the higher prices. They also say the cost of operating at Ben-Gurion is higher than at their other branches, partly because of the requirement to operate 24 hours a day, seven days a week – as well as the strict security arrangements at the airport.
Cup O’ Joe is a new player at Ben-Gurion – it replaced the Arcafé chain – but it is the same operator under a new brand and is still working under the old contract. For now, the IAA is unable to change these old contracts, which is actually the perfect example of how without any price oversight the chains are able to raise prices as they wish.
In the end, the decision whether to eat or drink at prices 20% to 30% higher than at the other stores in the same chain, or to eat in restaurants with lower price differentials, is in the hands of the passengers. But it does seem that competition at the airport is not what will bring about lower prices.
As opposed to prices for drinks, we found that the food prices at Cup O’ Joe are actually lower than at its counterparts in the city. For example, an egg sandwich including a salad on the side costs 39 shekels around the country and only 30 shekels at Ben-Gurion; a tuna sandwich with a salad costs 44 shekels elsewhere and only 34 shekels at the airport; and the Greek salad is also cheaper at the airport.
This pleasant surprise repeated itself at other food chains: All the items we checked at Burger Ranch were cheaper at Ben-Gurion, or the same price, than at its other branches around the country. At Ilan’s the grilled cheese sandwich and the Greek salad were both cheaper at the airport.
As for Café Café, the smoked salmon sandwich, with a salad, was only 36 shekels at the airport compared to 56 shekels elsewhere. The tuna sandwiches were also cheaper here.
The bad news for travelers is that most of these restaurants started their new contracts in 2012; except for Pizza Hut, which started in 2010; and the contracts are for periods of six to nine years. There are no more contracts ending this year and the first new tenders will be issued only next year.
Vending machines cheaper – if you can find one
One of the solutions the Airports Authority recommends for travelers to spend less on food and drinks at the airport is to buy sandwiches and hot drinks from the automatic vending machines around the terminal. These machines sell a cup of coffee for seven shekels and a cup of tea for six shekels. This may not be a real solution for everyone though, since the vending machine coffee is certainly not the same as that offered by the coffee shops, and the taste is not always what most customers are looking for.
The bigger problem is that if you try to find one of these vending machines, you will discover they do not exactly stand out in plain sight. On our tour of Ben-Gurion, we needed to ask the airport staff where the machines were to find them. The coffee shops are located at the center of the terminal or departures area, while the vending machines with the cheaper prices are hidden in these small niches without any eye catching signs, and it is only when you walk by the entrance to the small alcove on your way to the gate and happen to glance to the side just at the right moment, will you see it. True, those who know the machines exist and go hunting for them will find them. You can also check on the IAA’s website in advance – if you are among the few who are so well prepared – and find the locations there.
IAA: ‘Reasonable price differences’
The Airports Authority said: “As opposed to branches in the malls, the franchisees are required to operate their businesses 24/7 to serve the passengers, with the area of food supervised continuously and on a daily basis, both from the point of the quality of the service and the level of prices.”
The IAA said the contracts were for six to nine years for restaurants and coffee shops because of the high investment required in building the food courts in the airport. The price differentials between the stores in the airport and those outside it are “reasonable, considering the complexity of operating the location 24/7 with shifts of workers, strict security supervision (checking workers and goods) and transporting employees,” said the IAA.
The authority said food service at the airport has undergone a “revolution,” while expanding the choices available for purchasing food at a wide range of prices. The IAA said the new tenders issued over the past year and a half have lowered prices, noting that there are 27 different food sales points at the airport run by 13 franchisees.
Aroma said it operates under the conditions of the Airport Authority tender and contract and “the maintenance and operating costs at Ben-Gurion Airport are significantly higher and different than for any other branch, and this is the reason for adapting the prices.”
Cup O’ Joe said it had entered Ben-Gurion Airport under the conditions of the previous tender of the IAA. “These conditions, which were set a while ago, also apply to Cup O’ Joe, and this includes the high costs for rent and the pricing policy.”