Restaurateur Bringing 7,000 iPads to Airports: "We're Seeing 15-20% Revenue Boost"

Blatstein is a former nightclub owner who got into the airport restaurant business in the mid-1990s. 

Before his company, OTG Management, made its well-publicized announcement last month to deploy 7,000 iPads in four airports in North America, Blatstein was best known for bringing celebrity chef Michael Lomonaco and his $42 New York strip steak to La Guardia Airport.

Deploying thousands of iPads to La Guardia and John F. Kennedy Airports in New York, Minneapolis-St. Paul Airport and the lester B. Pearson Airport in Toronto is the next step in Blatstein's master plan to "take the airport out of airport food."

The stand-mounted iPads, along with USB and iPad dongles for charging, will not only occupy the seats of OTG restaurants (which range from upscale French bistros like Bisoux in La Guardia to chains like Jamba Juice and Dunkin' Donuts), but also be placed in hundreds of seats next to the actual boarding areas.

"We know that some people get nervous being away from the gates, so we're going deep into the gatehold areas," he said.

To gain this unprecedented access, OTG had to strike multi-million dollar deals with Delta Airlines, which controlled these seats in La Guardia, JFK and Minneapolis-St. Paul, and in Toronto with the Airport itself.

"We pay either a minimum annual guarantee or a percentage of revenues, whichever is bigger," he said.

OTG CEO Rick Blatstein says iPads help "electricify" the vibe at his airport restaurants and boost sales up to 20% per customer.

Credit: OTG Management

Is it worth it? In an 18-month pilot at the two New York airports, OTG found customers ordering via iPad spent 15-20% more than other patrons. OTG already got between $8-10 per patron, which Blatstein says is higher than most other airport restaurant operators, and wasn't the result of jacking up prices as airport restaurants are notorious for doing. Using iPads boosted sales between $1.20 to $2 per patron - not too shabby, though Blatstein thinks "we can push that even higher."

Customers "are in full control. They can customize their order, easily add chicken or shrimp or some side dish," he said. "And when they're done, they can swipe their credit card without having to look around for their waiter or waitress."

Translation: the iPads also sped up customer service, allowing OTG to turn crowded seats over more quickly and serve more customers - which also boosts revenues.

Preventing Stolen iPads and Sticky Screens

To order, customers use an app on the iPads that was originally developed for OTG by the Control Group. The app is now maintained by OTG's developers in New York City, who can push out updates to Mac Mini servers hidden inside the tables on which the iPads stand, at a ratio of one Mac Mini for every six iPads. Indeed, when you add everything up, the iPads themselves only comprise a small percentage of OTG's overall investment.

Asked about his ROI projections, Blatstein would only say that "We are very happy with the way things are going."

Putting my skeptical hat on, I asked Blatstein whether OTG encountered problems during its 18-month pilot with iPads that were stolen, damaged or became greasy from customers' fingers.

"Fortunately, nobody has stolen or damaged any," claimed Blatstein of the iPads, which are connected to the same sort of tethers used in Apple Stores. While OTG restaurant servers do need to do some "extra maintainance" such as wipe down the iPad screens, they are not required to act as police and watch for thieves, he said.

 I also asked Blatstein if as a former nightclub guy, if he worried that encouraging patrons to stare at screens would kill the atmosphere of his restaurants.

"This is an issue that is near and dear to me. I was definitely worried about that," he said. Instead, what he's found so far is that iPads "add electricity to a room. What you see are a lot of people talking to each other. They do 'the lean' over to another customer to talk about something they read on an iPad, and that causes more social interaction than we had before."

Apple itself was "very supportive" about OTG's efforts and helped connect Blatstein's team to some partners, he said. If the 7,000 iPad rollout is successful, OTG could roll out as many as 25,000 to 100,000 iPads over the next few years (making it the largest iPad enterprise rollout ever, see my list).

Blatstein is so loyal that he "doesn't foresee" adding Android tablets like the Google Nexus.

Have you tried out one of OTG's airport iPads? How was your experience?