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The high price of absolutely everything at the airport

Airport vendors have you right where they want you — trapped at the gate, drinking a $20 beer.

A photo illustration of people in an airport with dollar signs superimposed.
Airports are an economic twilight zone.
Getty Images/Vox
Emily Stewart covers business and economics for Vox and writes the newsletter The Big Squeeze, examining the ways ordinary people are being squeezed under capitalism. Before joining Vox, she worked for TheStreet.

There are tweets that can change the world. Then there are tweets that can change the price of beer at the airport, at least a little.

In July 2021, one thirsty traveler named Cooper Lund tweeted out an image of an airport bar menu, which, among other things, included an eye-popping $27.85 beer — Sam Adams Summer Ale Draught, to be specific — in LaGuardia’s Terminal C. It set in motion an investigation by the state’s inspector general, which found that 25 customers were charged “totally indefensible” amounts of $23 to $27 for a beer.

The Port Authority, the agency that oversees LaGuardia, JFK, and Newark Airports in New York and New Jersey, released a 35-page policy guide for vendors in May 2022 trying to crack down on airport prices. Under the new rules, vendors aren’t supposed to charge more than 10 percent over “street prices” — meaning what you’d be charged at a supposedly comparable place outside the airport — and they’re required to offer lower-priced food and beverage options overall. There’s even a website that, among other things, tells you where you might find a $2 bottle of water at JFK.

“All airport customers should rightly expect that policies which limit the pricing of food and beverages at concessions will be followed and enforced,” said Kevin O’Toole, chairman of the Port Authority, in a statement at the time. “Nobody should have to fork over such an exorbitant amount for a beer.”

All hail the beer tweeter, I suppose.

Even still, the airport is hardly a wallet-friendly place to be. Once you step on the premises and get past security, you’re in a sort of economic twilight zone where the cost of anything and everything goes up. You essentially get two choices: fork up and pay for that water or wine or set of headphones because you forgot yours at home, or wait it out and hope your flight doesn’t get delayed if you forgot to bring a snack. It’s true that it’s expensive to operate at an airport; it’s also true that restaurants and shops and airports overall know they’ve got you a little stuck and use it to their advantage to make money.

“They do realize they have a captive audience,” said Blaise Waguespack, a professor at Embry-Riddle Aeronautical University. “They’re trying to reach that price point so that people are going to say, ‘Yeah, this isn’t like downtown,’ but they’re not feeling ripped off. They’re trying to straddle a tight line.”

It’s a line that vendors often cross because they know enough passengers are going to pony up anyway.

That’ll be “street pricing,” plus 10-15 percent

Though it often feels as though there are absolutely no limits to how much you can be charged for a cup of coffee or bottle of Tylenol at the airport, that isn’t the case.

Most airports have policies for prices, and those policies are contained in the leases and requests for proposals for businesses, explained Andrew Weddig, executive director of the Airport Restaurant & Retail Association. “A typical price control right now would be a comparable street price plus 10 percent,” he said. “Some airports in the pandemic had moved it up to 15 percent due to the extra costs and due to the reduced sales volumes.”

How “street prices” are determined isn’t an exact, uniform science. Sometimes, the store brand exists in the everyday world, like a Starbucks or TGI Fridays, which can make the calculation a little easier (though which locations to compare to can get complicated). Other times, the brand doesn’t exist outside the airport or there aren’t really direct comparables, so possible vendors and airports have to sort of finagle an agreement of what counts. Under Port Authority’s rules, concessionaires are supposed to be able to justify what they consider comparable.

Concessionaires, understandably, want the comparables to be on the expensive end, which is where consumer frustration and confusion can come in.

Weddig — who is, of course, favorable to concessionaires — pointed out that if you’re buying a beverage at a convenience store or at Walmart, for example, that doesn’t generally count as comparable in airport vendor land. The street price of the beer and burger you’re buying at the airport may be based on, say, some fairly nice restaurants in Midtown Manhattan or Downtown Chicago. They’re not based on McDonald’s or the local dive bar down the street — even if the quality of airport food can be closer to the local dive bar than travelers would like.

The relative cost of selling stuff at the airport

It is very easy to go to the airport and be incredibly annoyed at how pricey everything is at the restaurants and stores inside, especially after you’ve watched the fees pile up while booking your flight and either paid to move faster in the TSA line or felt slighted by those who did. But in defense of those restaurants and stores — and I can’t believe I’m saying this — it is expensive to operate at the airport.

“There can be some unique operating and cost considerations,” Waguespack said.

Businesses have to pay the airport, which is generally owned by state or local entities, a minimum annual guarantee — or MAG — annually, which more or less translates to rent. In many cases, Waguespack added, they also have to pay a certain percentage of sales on, say, wine or beer or food.

Concessionaires deal with costs and obstacles normal businesses outside of airports don’t have to, such as getting employees security clearances and badges and getting inventory delivered and stored. An airport restaurant probably doesn’t have as much freezer space as a regular restaurant, and getting food to put in that freezer is more of a hassle. “If I run a restaurant out on the street, out in the community, that [delivery] truck doesn’t have to clear security,” Waguespack said. You also don’t have to pay extra insurance on that truck in case while driving on the tarmac it runs into an airplane.

That being said, there is obviously quite a bit of money to be made in opening a business at the airport — otherwise, no one would do it.

Airports don’t like dead space with nothing in it. “They know they have to give you a place for waiting for the airplanes and all of that, but it’s a revenue-generating spot they believe they need generating revenue,” Waguespack said. The “dwell time” between when people get through security and board their flights is a prime opportunity for monetization. Airports also have an attractive customer base: people who can afford to travel, some of whom are in “time to spend” vacation mode or are business travelers happy to expense a meal on the company card.

“Airline passengers are a good market to be in,” Waguespack said. “That’s why people are willing to go to the airport, do business at the airport, advertise at the airport — because you’re getting a good middle- to upscale-class clientele.”

Airports aren’t the only spaces where you are sort of trapped and at the mercy of whatever a business wants to charge you. It’s a similar situation in arenas and theme parks, at sporting events and at concerts.

The way to avoid spending a bunch of money at the airport might be just don’t spend any money

I wish I were the type of person who didn’t spend money at the airport, but in my mind, airport rules are there are no rules. Still, the best tactics to avoid overspending are simple but require foresight: filling up your water post-security, packing snacks, bringing a book, or downloading a movie. I usually forget to do any of that. Some ways to save don’t require any prep: If there’s free airport wifi, use it. If there’s not, think about if you can survive for a few hours without the internet. (You probably can and will be better for it; I’ll probably be logging on for a fee.)

Some travelers who are frequent flyers or have ties to certain airlines can get into their lounges, which can offer amenities such as free food and beverages and even showers. If you’ve lounge access, congratulations. If you have a friend who has lounge access and can tag along, congratulations as well. You can sometimes pay to get lounge access for the day, depending on the airline. American and United charge $59 for a day pass in their lounges; Delta doesn’t offer the option. It’s up to you to make that calculation as to whether it’s worth it. (How much time do you have? How much will you spend if you go to the airport bar instead?)

There isn’t much way around sticker shock for airline travelers. There’s a classic Seinfeld bit about it where comedian Jerry Seinfeld asks, “Do you think that the people at the airport that run the stores have any idea what the prices are every place else in the world? Or do you just feel they have their own little country out there and they can charge anything they want?” Some of this is just how the airport deal works, like it or not: Travelers are part of a captive audience, which lets vendors charge more than they might otherwise for a variety of reasons, and so they do. Airport authorities can and do put some limits on how much the upcharge can be, but at the end of the day, everybody here wants to make a profit.

Some travelers will balk at the price of that martini they were eyeing and walk away. Others will think, “Eh, I’ll treat myself to just one.” And then, maybe, knowing they’re on vacation or not taking off anytime soon or that in the airport there are no rules, they’ll have another.

We live in a world that’s constantly trying to sucker us and trick us, where we’re always surrounded by scams big and small. It can feel impossible to navigate. Every two weeks, join Emily Stewart to look at all the little ways our economic systems control and manipulate the average person. Welcome to The Big Squeeze.

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Update, November 18, 2022: This piece has been updated with the beer tweeter’s name, Cooper Lund.

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