The airport quick-service restaurants (QSR) market is anticipated to grow at a CAGR of more than 4.5% during the forecast period.
- There is a steady growth in the number of passengers travelling through air transport over the past decade. With high pricing and low quality of the inflight food, the demand to bring your own food (BYOF) concept is gradually growing (particularly from domestic Economy class passengers). The demand for the BYOF concept is anticipated to drive the growth of quick-service restaurants in the airport during the forecast period.
- The increasing investments in airport infrastructure for the construction of new terminals and new airports in various countries around the world to cater to the needs of growing passenger traffic are anticipated to generate new opportunities for the concessionaire in the coming years.
- The stringent regulations of airport authorities, problems in logistics and limitations in the menus of the QSRs are hampering the growth of airport quick-service restaurants market.
Key Market Trends
Fast Foods and Meals Segment Registered the Highest Market Share in 2019
The increasing revenues of the middle-class population in various countries around the world along with changes in the dietary patterns and food habits have led to increased preference for fast foods. The rapid growth in the consumption of fast foods is creating new market opportunities for fast food brands. Due to this reason, the fast food companies are venturing into airports. Another factor increasing the demand for fast foods in airports is the availability of wide range of options at low costs compared to the high retail cost onboard aircraft. Similarly, food chains are also expanding their presence in regions with high penetration of low-cost carriers (LCCs) as the LCC airlines do not provide inflight catering services. With such growth factors in emerging countries, the fast food and meals segment of the market is expected to grow steadily during the forecast period.
Asia-Pacific Region is Expected to Generate the Highest Demand During the Forecast Period
The air passenger traffic in countries like China, India, Singapore, Thailand, and Indonesia among others is growing rapidly in the past few years. This rapid growth in passenger traffic is forcing governments and airport operators to invest in modernization and upgrade of existing airports along with the construction of new airports. China, which is anticipated to become the largest aviation market in the mid-2020s announced its plan to construct 216 new airports by 2035. Similarly, the Indian government is investing in the development of current aviation infrastructure with the construction of new terminals and has plans to construct and inaugurate 100 additional airports by 2024. This will help the new regional restaurants and global food chains to partner with the airport and government-approved concessionaire and expand their operations into new airports. For instance, Lite Bite Foods, a major concessionaire in India was selected by KFC India to open its outlets at airports of emerging cities like Kozhikode, Bhubaneshwar, Kannur, Pune, Indore, and Ahmedabad. Due to the aforementioned reasons, the airport quick-service restaurants can expand their operation and propel the demand for airport QSRs in the Asia-Pacific region with the highest growth during the forecast period.
The market of airport QSRs is highly fragmented with many regional companies competing in the market for a significant share in the market. The prominent players in the airport quick-service restaurant market are global companies like Subway, Burger King, McDonald's Corp, KFC, and Starbucks Corporation. The global food chain companies easily penetrate into new regions due to their high brand value and identity. However, the small scale and regional restaurants will have to enter into a partnership with the global and expanding concessionaire to increase their presence globally. For instance, Lite Bite Foods is in plans to expand its presence in countries like Thailand, Singapore, and Dubai by bidding for concession at the airports in the coming future. Such expansion plans of the concessionaire will help the associated regional players to enhance their presence in the global market and serve the passengers in other international airports (same region or different regions), thereby maximizing the revenue of the restaurant.
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