This is a perfect example of an airport trying to have their cake and eat it too, and it's kind of diabolically clever.
On the one hand, airports need to make money, and with people buying cheap airline tickets, airports have found a solution by turning themselves halfway into malls, and charging businesses extremely high levels of rent, which the airport justifies because it's a captive audience that can't go anywhere else. Most of the $15 sandwich is ultimately going to the airport as rent, not to the CIBO food vendor as profit.
But at the same time, there's public outcry over the absurd pricing, so the airport has to mollify lawmakers by insisting it'll come up with a policy where they won't charge more than 10% for what would be comparable in Midtown. The airport is trying to blame those greedy vendors! But this is a trick. Who could ever define that? Sure you can compare Starbucks with Starbucks... but you can't compare a CIBO sandwich because it doesn't exist outside of airports, which is by design. That's the whole point, that easy comparables don't exist, and when a journalist tries to use a FOIA request to get at the comparables, they're stonewalled.
The airport is trying to insist it's preventing jacked-up prices, when in reality it's the airport charging rent that generates those jacked-up prices in the first place, and it tries to pretend like it plays no part. Evil, but clever.
> Why Does a Plastic-Wrapped Turkey Sandwich Cost $15 at the Airport?
Despite the "port authority" rules on 'street pricing', the real reason is lack of competition.
A single vendor receives the food contract for the airport, and they now have monopoly positioning and a captive audience. When business X is the only seller, and when the customers are held captive and unable to "go elsewhere" [1] then prices will naturally rise to the maximum the captive audience is willing to pay.
[1] How many air travelers are willing to exit the security perimeter, to then need to take a cab to somewhere (most airports are not located near dense shopping/restaurant areas) to purchase food, to then have to go back through security to return to their flight? And what few even have enough time between flight legs to even consider that "go outside the airport for food" trip as even possible? Plus by the time the "cab fee" is factored in, even if they could find the identical sandwich for 5.50 on the outside, the $10 + tip or more cab fee there and back would make the sandwich $15 or more in the end anyway.
Why award the contract for the entire airport to a single company though. My local Spanish airport has a bunch of different options. It's way cheaper, while definitely more expensive than outside the airport. The only price control enforced is on bottled water which can't cost more than 1 EUR.
I can offer some insight onto this, as I used to be in close proximity to a friend who worked in the concession group at the LAX version monitoring this policy.
It was called the 18% price protection policy program where concessionaires had to quarterly list 3 comparable vendors for each item sold showing how their item offered was only less than 18% above that of those found within a 10 mile radius of the airport. In reality, it was too much asked of low skilled and low margin vendors with power to enforce not being exercised due to managements prioritization of more pressing matters.
In reality, there was little by way of enforcement, it was too much regulation to pass down to those vendors even, with that being only 1 of 5-10 policies an excel sheets they had to provide quarterly data on, entered manually. They vendors had so much turnover themselves and employees who didn't specialize in providing that sort of data, they would always fall behind with all the policies and regulation they had to comply with that enforcing it on them was hollow and without power. And when they did provide data, it was poorly formatted, required man hours to read and research and in the end might not even have been a valid "comparable" data that was provided, but, to verify their data provided would require manual audits of physically inspecting 10-100 individual comparables that were given that it was a nightmare, and thus, never got done. There wasn't enough staff at either the vendor nor the airport authority to properly see the implementation of the price protection policy.
The city could technically use its power to make it a priority, but, there were always much more urgent matters at same position that it was a on the back burner, it seemed.
What does "used to be in close proximity to a friend" mean? I mean your comment is pretty detailed, down to the formatting of Excel documents and the internal workings of the regulators. People have conversations with friends, but rarely to this degree of detail, kind of makes it sound like you're just making shit up. Or, that you yourself are the "friend."
I remember being in one of the NYC airports and needing a plug socket adapter for my laptop, for the flight.
On Alibaba, 50 cents.
On Amazon, maybe 1.5 USD.
In the airport, 35 USD. This was back in about 2015.
I did not buy it, and got by as best I could.
Such extraordinary prices materially impact the experience of traveling. To my eye, they seem shortsighted.
I also finally realised some years ago all the "duty free" shops are a giant con.
Yes, they are duty free - but they're all charging about twice the high-street price.
I never buy in airports, which can inconvenient, and it is always unpleasant to witness when I travel. If I were running an airport, I would look to make the experience of travelers as pleasant as possible, rather than actually making it unpleasant.
You may have noticed in general that convenience costs you money. A charger which is in China and you will get in a month is indeed worth 50 cents because all that's worth to you.
A charger right this second, at the exact location (airport, past security) is obviously going to cost more.
Both because you are being charged a convenience premium, and because chances are nobody would bother setting up vending for 50 cents (just think about hiring cleared employees, supplying your store on that side of security, rental of that very limited space)
In general, I find myself much less outraged at what things cost once I became versed in market dynamics.
If you are a businessman who forgot his charger in the hotel and your flight got delayed, you are thrilled to pay $35 for it (vs not having it at all since nobody would bother selling it)
Depends on the country as well, some country airports with high item tax make it worth buying at the airport.
Take the vice tax for example, most Islamic countries probably at alcohol cheaper at their airports.
Same goes with countries that have items with pricing power, I always get certain gifts at Japanese airports since the price it usually cheaper with tax free comparative to the rest of the country.
US airports though... Never worth it. Overpriced af
When I was younger and dumber I made the mistake of buying some halfway decent ear buds for $95. Huge ripoff but I rode those things for years until they stopped putting out sound to repent for my mistake. Never again
This has similar econ dynamics to defense contracts.
The market competition between companies is entirely limited to competing for the exclusive, government granted monopoly of winning the contract. This is known as rent seeking in economics terms.
Once rent seekers win, the expectation is that the agency who governs the contract actually does their job and prevents price gouging. This can sometimes be done well, but usually, it isn't. My experience is that most govt regulators are complacent, mediocre, low energy desk jockies who default to doing as little as possible. This structure of management is why the US DoDs JSF (aka f35) program is such an absurdly horrific example of massive cost overruns and under performance.
I have an econ background, and one did an internal presentation at Booz Allen about the pitfalls of BAHs rent seeking dynamics encouraging top engineers to get sucked out of real projects (causing them to under perform) to instead work full time on writing proposals in response to govt RFPs. After all that's how you get promoted at these companies because what they say they value isn't actually what they value.
> My experience is that most govt regulators are complacent, mediocre, low energy desk jockies who default to doing as little as possible.
Yep. But the upside is that they're often the only thing standing between you and more or less infinite profit; and they're hardly an obstacle if you have the right set of keys.
Because New York City is like deep space: fundamentally hostile to life, especially human life. Once people get past their sensory overloaded twenties (or luck into the kind of wealth that triggers syncophantic personalities to suck up to them), it becomes clear that everything you try to do in the City involves a fight (and I'm not just talking about the days when you get multiple parking tickets, or the late nights when the F Train seems like it's never coming, or the kid behind the Deli counter gives you a sour look when you're counting out singles to pay for that double-digit sandwich on Seventh Avenue). A titanic struggle for survival in a high rise hellscape. And everyone is on edge, ready to pop off at any moment because they've reached their limit of being beaten down.
OK. The real answer is that The Port Authority of New York and New Jersey that regulates vendors at its facilities is a more wretched hive of scum and villainy than Mos Eisley. Clearly George Lucas had experienced one too many visits to JFK. Or was it LaGuardia?
In the late 1980s, when I traveled a lot for work, I thought of airports as similar to the debtors' prisons depicted by Dickens: it was unpleasant, it was sort of your fault you were there, and you could purchase comforts, but at inordinate prices.
Their argument that they don't want to disclose the names of individual vendors is flawed but somewhat logical. I've seen redactions, for example, on the breakdown of a town's tax revenue by industry when there was only one small business working in a specific industry.
Disclosing the price charged for a sandwich seems far less sensitive however. My hunch is there is likely no record of the comparison sandwiches, and I hope the author of this article appeals their records request to find out if that's true or not.
>> "To protect the integrity of the fact-finding process, as well as agency deliberations, the Port Authority’s longstanding policy is to maintain the confidentiality of these types of Inspector General investigative reports."
What requires protection here, other than the absurd consumer price gouging among a captive audience that occurs in EVERY airport across the country and those that let it occur? They are absolutely right in the article, this should be something easy to be transparent about, and shouldn't be a secret process run by lobbying restaurant companies, city management on the grift, and decrepit municipal process.
> Why does a plastic-wrapped turkey sandwich cost $15
Because people keep paying for them.
The fault of price gouging lies firmly with consumers. If consumers are willing to tolerate ridiculous prices, then guess what, vendors are going to keep charging ever-higher ridiculous prices. Why in the world would they not?
If no one, or at least much fewer, people were willing to shell out $15 for a sandwich, then that sandwich would not cost $15.
If you're going to be hungry, bring food with you to the airport. If you don't want to deal with being hassled while going through security about it, then eat it before you go through security. It's very simple.
Sure there are always going to be exceptions--flight delays, you're running late, your kids' blood sugar is dipping, etc, but if you adhere to this very basic principle more often than not, sandwich prices will go down.
I agree with all of your points, but in cases of monopoly or oligopoly you can't place all of the blame on the consumer. It seems like a simple way for this problem to fix itself is for the Port Authority to allow more competition among concessionaires in the terminals; the article doesn't make it clear how much competition there really is.
As noted elsewhere in this thread, the Port Authority is one of the most corrupt government organizations you could find, so it would be unsurprising if it ended up being that there were two or three parent companies behind all the concessionaires.
For the past five years, I have a no eating on travel days policy. Not only do I feel like I am avoiding these high costs, my stomach is less active which is great on travel days.
Yeah, if you get used to not snacking between meals, you begin to learn that typical hunger generally passes, especially if you stay busy/distracted. I usually only eat once or twice a day, and have fasted as long as a week.
Same reason you can’t buy anything but crap hotdogs in Central Park - vendors pay millions for the exclusive contract to sell and then they sell crap at high prices to cover their investment.
No competition, no innovation, no reason to not gouge tbe punters.
It's not just a Central Park problem: a lot of north america basically forbids the sale of anything from a cart beyond pre-cooked hotdogs and burgers (putting it on the grill is mainly for show and to warm it up).
Kinda makes sense because of lack of hand-washing facilities, but those aren't impossible to set up.
It's pretty obvious why the one in the picture at the top is $14.99. It's from the kosher stand that has a small selection and higher prices because kosher meat is generally pretty expensive in America. Mind you, I wouldn't normally buy that sandwich for $15, but the last time I traveled through Newark, I gladly payed that much for something kosher to eat. It's about the same as I'd pay outside the airport for something similar if freshly made. I can't say much about the other products listed, as I'm not the target demographic.
This article is not asking "Why would a store at the airport charge extra?" (pretty obvious), it's asking "Exactly how did these stores arrive at their prices given the pricing rules that are supposedly imposed on them by the government?"
FWIW most airports I’ve visited have a staff canteen that’s actually open to everyone, albeit hidden.
If you ask airport staff, they’ll know where it is.
There aren’t a ton of options there and it’s often in the basement but you can choose between a few options and get a decent meal (considering) without getting fleeced.
That’s where ground staff, baggage handlers, etc eat every work day.
> FWIW most airports I’ve visited have a staff canteen that’s actually open to everyone, albeit hidden.
Could you please list which airports you've been to have this, and where it is located in them?
It's not that I doubt airports have staff canteens, it's more that I have trouble believing anyone can just waltz into them. And a casual web search brings up only results about one airport actually having one open to the public.
I never buy those sandwiches but if I were tempted I’d consider that for the price of two of those I could buy a 6.1” screen Android smartphone at Kroger’s, download some videos, and watch them instead of eating.
Fascinating comparison to health pricing -- CMS has been trying for years to get hospitals to disclose their own prices (not even the methodology/formula deal from port authority), and they just haven't
People spill a lot of ink about whether regulators should force industries to be markets. Feels like we don't focus enough on the downstream case where regulators try to impose markets and fail
It’s really not difficult to build sandwiches that won’t require refrigeration and can be packed into a container for consumption on long trips, people just don’t really know how to make them. But it will vastly improve the quality of your life.
That's a feast! Laguardia happily shuts down at like 6 or so, after that if you have a connection you can look for food scraps on the floor or, you know, dive right into that intermittent fasting you always wanted to try.
[+] [-] crazygringo|2 years ago|reply
On the one hand, airports need to make money, and with people buying cheap airline tickets, airports have found a solution by turning themselves halfway into malls, and charging businesses extremely high levels of rent, which the airport justifies because it's a captive audience that can't go anywhere else. Most of the $15 sandwich is ultimately going to the airport as rent, not to the CIBO food vendor as profit.
But at the same time, there's public outcry over the absurd pricing, so the airport has to mollify lawmakers by insisting it'll come up with a policy where they won't charge more than 10% for what would be comparable in Midtown. The airport is trying to blame those greedy vendors! But this is a trick. Who could ever define that? Sure you can compare Starbucks with Starbucks... but you can't compare a CIBO sandwich because it doesn't exist outside of airports, which is by design. That's the whole point, that easy comparables don't exist, and when a journalist tries to use a FOIA request to get at the comparables, they're stonewalled.
The airport is trying to insist it's preventing jacked-up prices, when in reality it's the airport charging rent that generates those jacked-up prices in the first place, and it tries to pretend like it plays no part. Evil, but clever.
[+] [-] pwg|2 years ago|reply
Despite the "port authority" rules on 'street pricing', the real reason is lack of competition.
A single vendor receives the food contract for the airport, and they now have monopoly positioning and a captive audience. When business X is the only seller, and when the customers are held captive and unable to "go elsewhere" [1] then prices will naturally rise to the maximum the captive audience is willing to pay.
[1] How many air travelers are willing to exit the security perimeter, to then need to take a cab to somewhere (most airports are not located near dense shopping/restaurant areas) to purchase food, to then have to go back through security to return to their flight? And what few even have enough time between flight legs to even consider that "go outside the airport for food" trip as even possible? Plus by the time the "cab fee" is factored in, even if they could find the identical sandwich for 5.50 on the outside, the $10 + tip or more cab fee there and back would make the sandwich $15 or more in the end anyway.
[+] [-] lostlogin|2 years ago|reply
If my limited experience with hospital shops is anything to go by, yes, but it’s not the shop killing your pocket.
The landlord says some variation of ‘you’ll be the only coffee shop’ and the rent is about 8x what is sane.
The shop gets guaranteed business but has to charge a lot to pay the rent.
[+] [-] martin8412|2 years ago|reply
[+] [-] spacemannoslen|2 years ago|reply
It was called the 18% price protection policy program where concessionaires had to quarterly list 3 comparable vendors for each item sold showing how their item offered was only less than 18% above that of those found within a 10 mile radius of the airport. In reality, it was too much asked of low skilled and low margin vendors with power to enforce not being exercised due to managements prioritization of more pressing matters.
In reality, there was little by way of enforcement, it was too much regulation to pass down to those vendors even, with that being only 1 of 5-10 policies an excel sheets they had to provide quarterly data on, entered manually. They vendors had so much turnover themselves and employees who didn't specialize in providing that sort of data, they would always fall behind with all the policies and regulation they had to comply with that enforcing it on them was hollow and without power. And when they did provide data, it was poorly formatted, required man hours to read and research and in the end might not even have been a valid "comparable" data that was provided, but, to verify their data provided would require manual audits of physically inspecting 10-100 individual comparables that were given that it was a nightmare, and thus, never got done. There wasn't enough staff at either the vendor nor the airport authority to properly see the implementation of the price protection policy.
The city could technically use its power to make it a priority, but, there were always much more urgent matters at same position that it was a on the back burner, it seemed.
[+] [-] listenallyall|2 years ago|reply
[+] [-] casenmgreen|2 years ago|reply
On Alibaba, 50 cents.
On Amazon, maybe 1.5 USD.
In the airport, 35 USD. This was back in about 2015.
I did not buy it, and got by as best I could.
Such extraordinary prices materially impact the experience of traveling. To my eye, they seem shortsighted.
I also finally realised some years ago all the "duty free" shops are a giant con.
Yes, they are duty free - but they're all charging about twice the high-street price.
I never buy in airports, which can inconvenient, and it is always unpleasant to witness when I travel. If I were running an airport, I would look to make the experience of travelers as pleasant as possible, rather than actually making it unpleasant.
[+] [-] ornornor|2 years ago|reply
Same as ZERO COMMISSION EXCHANGE outfits that, yes, charge 0% commission on the receipt but have jacked up all exchange rates by 10% instead…
[+] [-] xyzelement|2 years ago|reply
A charger right this second, at the exact location (airport, past security) is obviously going to cost more.
Both because you are being charged a convenience premium, and because chances are nobody would bother setting up vending for 50 cents (just think about hiring cleared employees, supplying your store on that side of security, rental of that very limited space)
In general, I find myself much less outraged at what things cost once I became versed in market dynamics.
If you are a businessman who forgot his charger in the hotel and your flight got delayed, you are thrilled to pay $35 for it (vs not having it at all since nobody would bother selling it)
[+] [-] largepeepee|2 years ago|reply
Take the vice tax for example, most Islamic countries probably at alcohol cheaper at their airports.
Same goes with countries that have items with pricing power, I always get certain gifts at Japanese airports since the price it usually cheaper with tax free comparative to the rest of the country.
US airports though... Never worth it. Overpriced af
[+] [-] conductr|2 years ago|reply
You’d also need to find a revenue source to maintain the airport and pay salaries which is kind of important
[+] [-] grishka|2 years ago|reply
These prices work in airports because there are little to no repeat customers, AND there is no competition to drive the prices down.
[+] [-] Symbiote|2 years ago|reply
> On Amazon, maybe 1.5 USD.
There's a decent chance neither of these pass the minimum safety requirements. It would be fairer to compare with a socket adapter from a supermarket.
e.g. Tesco, £4.50 for two, vs. Heathrow Airport £11 for two.
[+] [-] kevviiinn|2 years ago|reply
[+] [-] elicash|2 years ago|reply
[+] [-] JPKab|2 years ago|reply
This has similar econ dynamics to defense contracts.
The market competition between companies is entirely limited to competing for the exclusive, government granted monopoly of winning the contract. This is known as rent seeking in economics terms.
Once rent seekers win, the expectation is that the agency who governs the contract actually does their job and prevents price gouging. This can sometimes be done well, but usually, it isn't. My experience is that most govt regulators are complacent, mediocre, low energy desk jockies who default to doing as little as possible. This structure of management is why the US DoDs JSF (aka f35) program is such an absurdly horrific example of massive cost overruns and under performance.
I have an econ background, and one did an internal presentation at Booz Allen about the pitfalls of BAHs rent seeking dynamics encouraging top engineers to get sucked out of real projects (causing them to under perform) to instead work full time on writing proposals in response to govt RFPs. After all that's how you get promoted at these companies because what they say they value isn't actually what they value.
[+] [-] 4wsn|2 years ago|reply
Yep. But the upside is that they're often the only thing standing between you and more or less infinite profit; and they're hardly an obstacle if you have the right set of keys.
[+] [-] ncphil|2 years ago|reply
OK. The real answer is that The Port Authority of New York and New Jersey that regulates vendors at its facilities is a more wretched hive of scum and villainy than Mos Eisley. Clearly George Lucas had experienced one too many visits to JFK. Or was it LaGuardia?
[+] [-] sclarisse|2 years ago|reply
The OTG managed hospitality experience at LGA is the worst crime against aviation in the last 21-and-a-half years. Try their $20 burger. I dare you.
JFK at least has ShakeShack.
[+] [-] cafard|2 years ago|reply
[+] [-] mwexler|2 years ago|reply
But when public groups restrict data even after an FOI request, it's hard not to wonder if something foul is going on.
[+] [-] notjulianjaynes|2 years ago|reply
Disclosing the price charged for a sandwich seems far less sensitive however. My hunch is there is likely no record of the comparison sandwiches, and I hope the author of this article appeals their records request to find out if that's true or not.
[+] [-] bastard_op|2 years ago|reply
What requires protection here, other than the absurd consumer price gouging among a captive audience that occurs in EVERY airport across the country and those that let it occur? They are absolutely right in the article, this should be something easy to be transparent about, and shouldn't be a secret process run by lobbying restaurant companies, city management on the grift, and decrepit municipal process.
[+] [-] thebiss|2 years ago|reply
[+] [-] Algemarin|2 years ago|reply
Because people keep paying for them.
The fault of price gouging lies firmly with consumers. If consumers are willing to tolerate ridiculous prices, then guess what, vendors are going to keep charging ever-higher ridiculous prices. Why in the world would they not?
If no one, or at least much fewer, people were willing to shell out $15 for a sandwich, then that sandwich would not cost $15.
If you're going to be hungry, bring food with you to the airport. If you don't want to deal with being hassled while going through security about it, then eat it before you go through security. It's very simple.
Sure there are always going to be exceptions--flight delays, you're running late, your kids' blood sugar is dipping, etc, but if you adhere to this very basic principle more often than not, sandwich prices will go down.
[+] [-] prottog|2 years ago|reply
As noted elsewhere in this thread, the Port Authority is one of the most corrupt government organizations you could find, so it would be unsurprising if it ended up being that there were two or three parent companies behind all the concessionaires.
[+] [-] bluedino|2 years ago|reply
[+] [-] x43b|2 years ago|reply
[+] [-] tracker1|2 years ago|reply
[+] [-] subpixel|2 years ago|reply
No competition, no innovation, no reason to not gouge tbe punters.
[+] [-] Scoundreller|2 years ago|reply
Kinda makes sense because of lack of hand-washing facilities, but those aren't impossible to set up.
[+] [-] spacemule|2 years ago|reply
[+] [-] trafnar|2 years ago|reply
[+] [-] ornornor|2 years ago|reply
If you ask airport staff, they’ll know where it is.
There aren’t a ton of options there and it’s often in the basement but you can choose between a few options and get a decent meal (considering) without getting fleeced.
That’s where ground staff, baggage handlers, etc eat every work day.
[+] [-] Algemarin|2 years ago|reply
Could you please list which airports you've been to have this, and where it is located in them?
It's not that I doubt airports have staff canteens, it's more that I have trouble believing anyone can just waltz into them. And a casual web search brings up only results about one airport actually having one open to the public.
[+] [-] rippercushions|2 years ago|reply
https://travel.stackexchange.com/questions/74945/is-there-a-...
[+] [-] orf|2 years ago|reply
[+] [-] unknown|2 years ago|reply
[deleted]
[+] [-] tomcam|2 years ago|reply
[+] [-] Scoundreller|2 years ago|reply
https://www.cntraveler.com/story/new-york-airports-free-unli...
[+] [-] awinter-py|2 years ago|reply
People spill a lot of ink about whether regulators should force industries to be markets. Feels like we don't focus enough on the downstream case where regulators try to impose markets and fail
[+] [-] xwdv|2 years ago|reply
Just stop buying these expensive sandwiches.
[+] [-] ufo|2 years ago|reply
[+] [-] twelve40|2 years ago|reply
[+] [-] sdze|2 years ago|reply
[+] [-] switch007|2 years ago|reply