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Idle luggage carts mean lost revenue for airports and cart renters

The growing popularity of wheeled luggage and the advent of fees to check baggage have led to lower demand for airport luggage cart rentals. As a result, some airports that once counted on the rentals for revenue, including LAX, now lose money on the carts.

July 01, 2011|By Hugo Martín, Los Angeles Times
  • Luggage in hand, passengers stroll by a discarded Smarte Carte baggage cart outside Terminal 5 at Los Angeles International Airport last month. Demand for carts has dropped so much at LAX that revenue from domestic passengers no longer covers the cost of providing free carts for foreign visitors. As a result, the city now spends $950,000 more each year on the free carts than it collects from domestic travelers, airport records show.
Luggage in hand, passengers stroll by a discarded Smarte Carte baggage… (Mariah Tauger, Los Angeles…)

The rolling revolution in suitcases is idling those airline terminal luggage carts — costing airports and cart rental companies millions of dollars in lost revenue.

The demand for airport luggage carts, which has been steadily declining with the growing popularity of wheeled luggage, has dropped further now that airline baggage fees are forcing passengers to travel lighter.

At Los Angeles International Airport, cart rentals once provided at least $2.75 million in annual revenue. Now, the airport is losing nearly $1 million a year under a deal that obligates it to provide free carts to foreign travelers.

The same scenario is playing out across the country. Airports in New York; Tampa, Fla.; Seattle; Phoenix and Las Vegas are among those saying cart concessions either aren't the cash cows they used to be or have turned from a source of income to an expense.

"That is the nationwide trend: More and more people don't use luggage carts," said Sven Stohn, chief executive of Bagport Group, which runs cart rentals at airports in Philadelphia, Boston and Phoenix. "Through the past two years, I think revenue has dropped up to 23%."

Easy-rolling luggage and airline baggage fees get most of the blame.

Wheels have been on suitcases for decades, but the design took off after Northwest Airlines pilot Bob Plath came up with the idea for a suitcase in 1987 with built-in wheels and an extendable tow handle.

"All of our luggage has wheels on them, except the small carry-on bags," said Stephanie Goldman, a spokeswoman for Samsonite, one of the world's largest luggage manufacturers.

And now that passengers are packing fewer belongings to avoid airline baggage fees, travelers say it is largely unnecessary to pay between $3 and $5 to rent airport luggage carts.

Jim Slade of Huntington Beach recently flew from Los Angeles to Montana to visit friends for five days. There was a time when he might have packed a big suitcase. But with the advent of luggage fees, he made do with a small carry-on bag with built-in wheels.

"Now that the airlines charge to check bags, I fly with less," he said.

Near the Delta Air Lines counter at LAX recently, Jessica Laub of New York had just arrived for a visit with family, pulling a suitcase on wheels and a carry-on bag. She said she packs very little to avoid luggage fees — and even left a pair of skis with her family in Los Angeles to avoid paying to bring them back and forth with her to New York.

"I haven't used a cart in years," she said.

Smarte Carte Inc. is the nation's largest luggage cart rental firm, serving at least 150 airports in North America. The St. Paul, Minn.-based company declined to discuss rentals, but a glimpse into its falling fortunes was recently provided by the Burbank-Glendale-Pasadena Airport Authority, which runs Bob Hope Airport.

Airport officials say Smarte Carte asked for more favorable terms for its cart concession, saying the privately held company has seen revenue drop 30% nationwide since 2007.

The airport authority agreed in April to cut from 24% to 10% the percentage of gross revenue Smarte Carte pays the airport to rent carts. The change will slash annual revenue paid by Smarte Carte from $57,000 to about $9,660, officials estimate.

At Seattle-Tacoma International Airport, a new rental cart contract approved in 2009 cuts revenue to the airport from $542,000 per year to an estimated $317,000, according to an airport report. At Florida's Palm Beach International Airport, meanwhile, Smarte Carte is seeking permission to remove seven of its 18 cart-dispensing machines.

Phoenix Sky Harbor International Airport once collected at least $92,000 a year from cart rentals. Now it pays $120,000 a year to a luggage cart operator because the business doesn't generate enough to cover the cost of free carts for international visitors and customers at the airport's car rental center.

Like many large airports, Los Angeles International Airport has for years provided visiting international visitors free luggage carts. The city of Los Angeles has paid for the carts with its share of fees charged to rent carts to domestic travelers.

But the demand for carts has dropped so much that revenue from domestic passengers no longer covers the cost of the free carts for foreign visitors. As a result, the city now spends $950,000 more each year on the free carts than it collects from domestic travelers, airport records show.

The Los Angeles Board of Airport Commissioners plans to discuss in August whether to end the free cart policy for international visitors.

Airport officials see little chance that luggage carts will come back into fashion anytime soon. In addition to adding wheels and collapsible handles, luggage makers have also reduced the size of most bags to help passengers avoid the fees charged by airlines to check bags or to haul overweight luggage.

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