Travelers are accustomed to paying more at the airport, but the extent of the inflation is striking: an identical chocolate bar can cost 120% more inside the terminal, and a Chili's burger might be marked up 46% above its comparable street price. The root cause of this pricing disparity is not merely the presence of a captive audience, but a profound lack of competition among concessionaires and poorly enforced pricing regulations. As detailed in an investigation by Business Insider, the journey toward the modern, expensive airport began far from today's shopping mall terminals. In the early 20th century, airports were often criticized as dingy, dirty, and overcrowded spaces resembling train stations. To generate revenue, airports experimented with various amenities, including observation decks, oil wells, pay toilets, swimming pools, and eventually, parking, which became a significant money maker. The "golden age of flying" saw terminals evolve into architectural marvels hosting nice restaurants, sometimes attracting locals for special occasions like proms or anniversaries.
This era of glamour ended abruptly after 1978, when deregulation allowed airlines to set their own fares and routes, driving ticket prices down dramatically. While the number of U.S. flyers nearly doubled within a decade, service deteriorated, trading gourmet meals for pretzels and soda. As connecting flights increased in the 1980s, passengers were forced to wait longer in terminals, leading to immediate complaints about markups ranging from 50% to 100%. The airport industry's solution was the "mall concept". The Pittsburgh airport pioneered this model in the U.S. in the early 1990s, transforming its terminal into a shopping hub with over 100 shops and restaurants. Notably, Pittsburgh initially succeeded by using "street pricing," ensuring prices inside matched those outside the airport. This concept helped Pittsburgh’s revenue soar 75% in six years, and other airports adopted street pricing in response to passenger frustration.
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Today, the original street pricing model has been replaced by "street pricing plus"—allowing businesses to charge the street price plus an additional 10% to 15%, which concessionaires consider a fair and reasonable adjustment. However, enforcement of these caps is lax, and violations are commonplace. The Port Authority of New York and New Jersey, for instance, requires prices to be based on the average of comparable outside items plus 15%, but when Business Insider reviewed a $14 chocolate bar at LaGuardia, it found the comparable prices cited by the business were inflated, and the Port Authority did not commit to adjusting prices despite the discrepancies. Further examples of extreme markups include a snack at the Minneapolis-St. Paul (MSP) airport priced 69% above its street price, and a yogurt was marked up 84%. A spokesperson for the Metropolitan Airports Commission (MAC) confirmed to Business Insider that locations are audited twice annually but declined to comment on the price disparities found. The company OTG, a major concessionaire, reportedly lowered the price of the 84%-marked-up yogurt after Business Insider reached out.
Concessionaires often justify the elevated costs by citing operational expenses, noting that development inside the airport is reportedly 30% to 40% more expensive due to stringent security protocols for employees and equipment. Businesses also face requirements to operate long hours (often 4:00 a.m. to midnight) and pay high rent to the airport, typically between 10% and 16% of their sales. However, the most significant factor driving costs is the fundamental lack of competition. The vast majority of airport food and retail across the U.S. is managed by just six large corporations. Companies like Avolta (which owns HMS Host, Hudson News, and Duty-Free stores) and OTG consolidate operations, meaning a food court with six visible options might all be run by the same corporate entity. This consolidation allows powerful concessionaires to advocate for increasing or entirely abandoning price caps, as seen when the Phoenix, Arizona, airport eliminated street pricing entirely in 2019 following requests from HMS Host and SSP.
This business model relies heavily on "dwell time"—the increased time passengers spend waiting post-9/11 security. Airports intentionally capitalize on passenger boredom and the impossibility of reaching a gate without passing retail, understanding that longer waits translate directly to food and retail revenue. Airports view non-aeronautical revenue (like parking and concessions) as a high priority, earning nearly half their income from these sources. The success of this model is clear: U.S. airports earned over twice as much food and beverage revenue in 2024 as they did in 2010.
While most of the industry focuses on profitability maximization—part of Avolta's strategy is to continuously drive spend per passenger—Portland International Airport (PDX) remains a rare exception. PDX enforces "clean street pricing," meaning there are no additional fees, and the airport's percentage intake is linked to the sales volume. This model is successful, generating a passenger spend per plane passenger of $15.30, 20% higher than the national average of $12.50. Nevertheless, experts believe it is challenging for airports to revert to this model, particularly as others, such as LAX, have recently removed price caps in response to business complaints. Passenger frustration is mounting: a 2024 survey identified food and beverage prices as the lowest-scoring attribute, and Congress, recognizing the extreme markups travelers face, wrote a letter in May 2025 asking the Federal Trade Commission to investigate concession prices at airports.
