Senate Bill 2402 aims to amend the laws governing airport concessions in Hawaii to enhance the flexibility and discretion of the Department of Transportation when addressing substantial hardships faced by concessionaires. The bill acknowledges that during hardships, such as the COVID-19 pandemic, several concessions suffered unequal treatment, wherein only some received contract extensions or relief. This has drawn attention to the need for more equitable treatment across all airport concessions, similar to practices observed at mainland airports.
The legislation allows for the modification of contract terms if a concessionaire experiences a significant decrease in business due to unforeseen circumstances, with a benchmark set for a minimum reduction of 15% over 60 days. The bill outlines conditions under which the department can offer relief to concessionaires, encompassing measures like adjusting rents, extending contract terms, or providing the option to enter new contracts or adapt existing ones as needed. This legal flexibility is designed to help concessionaires recover from financial losses and stabilize their operations during economic downturns.
Additionally, SB2402 recognizes the critical nature of airport concession revenues, which historically account for a significant percentage of airport operation income. The introduction of this legislative piece addresses a gap in the current statutory framework which lacked provisions for accommodating concessions' unique challenges. The significant reliance on traveler-dependent businesses and the difficulties associated with finding replacements for closed concessions during crises underscore the need for reform in the existing contracting approach.
The intent of the bill is not to mandate relief but to provide the Department of Transportation with the option to explore various relief opportunities for airport concessions, thereby aiming to establish more robust and supportive business models. By enhancing support for these businesses, SB2402 seeks to ensure that airport concessions can effectively manage challenges and maintain their operations through periods of economic uncertainty.