Travelers who shop or dine at Philadelphia International Airport can expect to see new fees of up to 3% on some purchases.
The fee was approved by the city’s Department of Aviation in March and is intended to mitigate increased operating costs at the airport since the full fee in the latest wage and benefit ordinance went into effect in January. To date, about 87 percent of businesses at the airport have implemented the fee.
“Our airport operators are concerned about the sudden changes in airport operating costs due to changes in hourly wages, hourly allowances, sick leave, federal holidays and vacation time,” Kate Sullivan, the aviation agency’s chief commercial officer, said in an email.
Some operators “were concerned about whether they could maintain their stores due to changes in cost structures,” she said.
Business operations within the airport More expensive Concessionaires say that’s due to a number of factors, including rent and labor availability, The Wall Street Journal reported last year. 80% of major airports The prices are higher than those typically found on the streets outside the airport, the paper said.
Under PHL, businesses can raise prices up to a certain level. Charge up to 15% more That’s cheaper than the usual price outside the airport: Chickie & Pete’s crab fries, for example, cost $8.79 at the airport but $7.99 at the chain’s South Philadelphia location on Packer Avenue, he said. The menu on the company’s website.
The new 3% fee is in addition to the mark-up pricing model that businesses within the airport can adopt.
“We looked at several airports and modeled our fees after how similar airports have dealt with changes that impact the cost of operating an airport,” Sullivan said.
Why are new fees being introduced?
In 2021, the City Council passed a bill to increase wages and benefits for thousands of airport workers that was later signed into law by Mayor Jim Kenney. American Airlines, the airport’s major employer, resisted the increased costs that came with the bill because the airline was still recovering from the pandemic. Some airport operators were unhappy with the increased costs, The Inquirer reported in 2021. Ultimately, implementation was delayed.
The full wage and benefits ordinance rate went into effect at the airport in January, Sullivan said, with covered employees earning $17.20 an hour.
Ministry of Aviation and Marketplace PHL LLCIt is the airport’s food and retail partner and is responsible for operations. Leasing, Development and Management The agency has been monitoring the impact of the ordinance. In response to operators’ concerns, operators were allowed to raise their rates in January, charging up to 15% more than similar operators charged outside the airport, Sullivan said. Previously, operators could only charge up to 10% more. In Los Angeles, the rate is 18% higher, in Kansas City, 15% higher and in New York City, 10% higher. 2023 Journal.
“The Department continues to hear concerns from operators, and the Employee Wages and Benefits Fee responds to those concerns,” Sullivan said.
Who charges the fee and where does the money go?
Airport operators can choose whether to impose fees, but franchise or other business agreements may prevent them from doing so, the report said. Marketplace PHLTo date, the fees have been implemented at 128 of the airport’s 153 locations, Sullivan said.
Businesses that charge fees must inform customers by posting signs about the fee or listing the fee on receipts.
The airport does not collect any portion of the fee, instead passing the entire amount to the operator, and the fee is not a tip paid directly to the employee.
The maximum rates that companies can charge will be set by MarketPlace PHL in collaboration with the Aviation Bureau, and rates will be reviewed every six months to measure impact.