Always welcome

The leaders of some of the world’s biggest airport lounge operators tell us a little more about their businesses, how they are coping with the traffic downturn and the potential impact COVID might have on the airport hospitality industry.

Aviation and hospitality are arguably two of the industries to be hardest hit by the coronavirus pandemic, so when both are key to your business model, it doesn’t take a genius to work out that the last 18 months have been particularly difficult for the world’s airport lounge operators.

However, if you were expecting to find lounge operators such as the Plaza Premium Group, Airport Dimensions and MAG USA on their knees and struggling to survive, think again, as instead of doom and gloom all are looking forward to the future with renewed optimism.

We gauge the thoughts of Plaza Premium Group’s founder and CEO, Song Hoi-see; Airport Dimensions CEO, Mignon Buckingham; band MAG USA CEO, Martin Jones, in this Q&A style article and discover that all have been busily expanding their businesses over the last year.

PLAZA PREMIUM GROUP
Founder and CEO: Song Hoi-see
Airport lounge offering: Plaza Premium Lounges
Number of airport lounges: 180
Key focus areas: The Americas and China. Significant presence in Europe, India, Middle East and Southeast Asia.

What is your biggest airport location either in terms of the size or number of lounges you operate there?

We operate four lounges at our home airport in Hong Kong, which include our first Plaza Premium First first class lounge, but our biggest lounge in terms of size is at Qingdao Jiaodong International Airport where we have a 1,344 square foot facility and three other lounges.

What impact do you believe COVID-19 will have on the future demand for airport lounges?

We foresee a growing demand for airport lounges, meet and greet services and airport hotels post-pandemic as travellers seek even more seamless, comforting and worry-free airport experiences. In the past, airport lounges were arguably seen as a bit of a luxury. Going forward, I think they will be seen more of a necessity for travellers by providing an oasis that help ease the tension of travel. As a result, we are 100% committed to expansion and offering an end-to-end airport hospitality experience.

Is it time to redevelop or redefine the airport lounge concept in the wake of COVID?

Yes, definitely, but I expect it to be more of an evolution than a revolution in terms of offerings and services to take onboard changing traveller behaviours and expectations. The industry will need to prioritise hygiene and safety more than ever before. From our perspecrive, we are implementing protocols by offering touchless experiences that miminise human contact, such as implementing Smart Order, our food ordering system via the scan of a QR code for guests to enjoy fresh made-to-order meals. In some locations we also offer pre-portioned or pre-packed options. We’ve also launched Lounge-to-Go, where travellers can take their lounge experience to enjoy at the gate or inflight. We’ve also reconfigured our spaces to encourage social distancing, privacy and personal space and digitised physical reading materials.

We also believe that meet and greet services will become more and more important in the future as people look for a safe, customised and seamless journey through airports. For this reason, we continue to expand our ALLWAYS meet and greet offering, recently launching services at Rome Fiumicino and Istanbul Sabiha Gökçen airports.

Will new technology play an ever-increasing role in your lounge offering?

We have invested over $5 million on technology and enhancing our data management capability in the last two years alone and expect to invest double that in the coming two years to further improve the customer experience of our guests, product creation, operational efficiency and commercialisation.

As part of our mission and strategy to deliver seamless, optimal and data-driven operation excellence, we are going to team up with a global IT services operator to develop an end-to-end passenger services technology platform to connect the complexity of reservation, sales and marketing, customer engagement, back-of-house command and control, manpower management, training centre and the entire operation information management. Ultimately, the goal is to further optimise and commercialise customer experiences and achieve the vision of providing an unmatched, memorable, world-class passenger journey.

We believe that the need to continue to engage with and provide a more personalised service to customers will lead to more airport loyalty programmes appearing in the market. We launched Smart Traveller – our airport membership programme – in Q1 2020 to do just this, and it has allowed us to introduce the concept of ‘reward now, travel later’ offerings while the travel industry is effectively on pause.

How has COVID-19 impacted on your business development philosophy/strategy?

We have embarked on a business transformation strategy based on the evolving needs and behaviours of the travel market. In terms of opening new lounges, we are targetting expansion in the Americas, Australia, Europe, Middle East and Africa (EMEA), Greater China, India and Southeast Asia in the next 12 months and aim to expand from 180 lounges today to over 500 by 2024/25 through growing both the Plaza Premium Lounge venues and through affiliate lounge networks.

The plan is to expand our footprint to create a bigger, global network that is built through strategic consolidation and alliances with industry players, and that will see us in the top 100 busiest airports worldwide.

It is worth mentioning that despite the pandemic, in the past 12 months we have expanded our airport lounge offerings at Sydney, Dallas/Fort Worth, Istanbul Sabiha Goken and Changsha and launched operations at Guangzhou high-speed railway stations.

What three things has COVID-19 taught you about aviation and the hospitality business?

That both industries are resilient and will continue to grow by continuing to remain agile and meeting the needs and expectations of customers. I have also learnt that overcoming COVID will require the effort and collaboration of governments and all industry stakeholders, and that digitalisation has been accelerating at full speed from new perspectives beyond providing convenience and security.

Are you seeing any green shoots of recovery in terms of the number of customers returning to your lounges?

Yes, for sure. Domestic travel is reviving in China, for example, and cross-border and international travel is gradually resuming between the US and Canada as well as in Europe and Asia. In the next 12 months, we foresee professionals who live and work abroad, affluent leisure travellers and international students will be the key segments that are going to travel. We recently launched our ‘We’re Ready Whenever You Are’ campaign to echo our desire to welcome back global travellers and restore excitement in air travel once again. Our guests can be assured of safe and comfortable facilities and seamless services from Plaza Premium Lounge, no matter where they are in the world.

AIRPORT DIMENSIONS
CEO: Mignon Buckingham
Airport lounge offering: The Club, Club Aspire, No1 Lounges and sleep ’n fly
Number of airport lounges: 37
Key focus areas: Currently has lounges in the UK, US and the Middle East and about to expand to Asia and South America with new
lounges set to open in Hong Kong and Brazil in the coming months.

What is your biggest airport location either in terms of the size or number of lounges you operate there?

Following the acquisition of the iconic No1 Lounges portfolio with joint venture partner Swissport, we now run multiple lounges in London Gatwick Airport under the No1, Clubrooms, My Lounge and Club Aspire brands.

What impact do you believe COVID-19 will have on the future demand for airport lounges?

Now, more than ever, travellers seek a quiet and safe space away from the hustle and bustle of the airport terminals. Prior to and during the peak of the pandemic, our sleep lounges, sleep ‘n fly at DXB and DOH, saw a huge spike in demand with guests appreciating the choice of personal space. Overall, as we see people wanting to get away more than ever, we have seen a shift in the type of customers visiting our lounges, from predominantly business passengers to more leisure travellers who want a space to relax before their flight.

Is it time to redevelop or redefine the airport lounge concept in the wake of COVID-19?

COVID-19 has undoubtedly accelerated the trends we had been seeing across the airport for a while. Increasingly, travellers have been looking for a better, more personal and digitally-enabled experience at the airport. COVID-19 has turned this from a ‘nice to have’, to a ‘must have’. Over time this will manifest itself in the lounge by offering guests greater choice and control over their experience, and the ability to access and customise greater and better experiences directly from their phones.

Will new technology play an ever-increasing role in your lounge offering?

Absolutely, we see demand increasing for a contactless and digitally-connected experience. Airport Dimensions recently launched its e-commerce and relationship platform Connecta, which helps airports link the physical and digital traveller experience to rebuild revenue. There is a spectrum of new ways to offer more control and more experiences for the traveller. Our digital journey stretches beyond the lounge itself, providing access to additional services across the airport, such as ordering food to go with our F&B marketplace partner Servy, and duty free ordering in-lounge with retail aggregator Inflyter. With more commercial services accessible digitally within the lounge, this helps to drive the revenue recovery that airports urgently need.

How has COVID-19 impacted on your business development philosophy/strategy?

Airport Dimensions’ strategy has always been to invest strategically to strengthen our position as an innovative force, improving the airport experience and driving non-aeronautical revenues, and this didn’t stop because of COVID. At the peak of the pandemic, our entire network was closed, which of course, did affect us. However, during this time we continued to expand our offering through the acquisition of sleep ’n fly (the pioneers in sleep lounges in the Middle East), and the prestigious No1 Lounges portfolio, providing greater variety and a differentiated proposition. We now focus strongly on both the physical and the digital environment by investing in driving revenue growth for airports and increasing traveller satisfaction powered by our e-commerce loyalty platform, Connecta.

What three things has COVID-19 taught you about aviation and the hospitality business?

Firstly, be flexible and agile as every day is different. From staffing to safety to menu options, our people have done an amazing job of adapting to the pandemic. Secondly, work closely with airports. We are all in this together and we need to work collaboratively to find commercial, service and operational solutions to current challenges. And finally, look after your guests; delivering a great experience and going above and beyond during these difficult times will win you fans and advocates for life.

Are you seeing any green shoots of recovery in terms of the number of customers returning to your lounges?

As travel restrictions are relaxed at different speeds across our global network, we’re starting to see passenger numbers slowly climb. Globally, visitor numbers have increased by 45% in the past two months, and in the US our visitor numbers are at just over 75% of pre-COVID levels.

MAG USA
CEO: Martin Jones
Airport lounge offering: Escape Lounges – The Centurion® Studio and Escape Lounges
Number of airport lounges: 16
Key focus areas: The UK and US.

What is your biggest airport location either in terms of the size or number of lounges you operate there?

Phoenix Sky Harbor in the US is a dual lounge concept and our biggest airport location in terms of size. It’s also unique in that we launched the first lounge concept of its type in the world. Part of the space is built out as an AMEX Centurion Lounge, and the other part is built out as an Escape Lounge, but we operate them both with the same team utilising a single reception and kitchen area. It’s been hugely successful, and it’s really solving a traveller pain point judging by the demand we’ve seen for it.

What impact do you believe COVID will have on the future demand for airport lounges?

I think that the demand for airport lounges will increase as people look for a spacious and quiet place to relax. Airports have never been a calming environment, but now more than ever people need an ‘Escape’ from the hustle and bustle of the terminal. Although we are seeing fewer business travellers at the moment, we expect that to recover to pre-COVID levels soon and we are also seeing a greater penetration of leisure travellers, so surprisingly guest numbers are at an all-time high.

Will new technology play an ever-increasing role in your lounge offering?

Definitely. As a digital-led company with a team of over 50 developers, you can expect to see us lead in airport lounge and customer service innovation. Technology has become an essential part of the traveller’s journey and we’re developing new technology in step to meet their needs.

A few offerings we’ve rolled out because of COVID are our PressReader which allows guests to download the digital versions of their favourite magazines, Touchless Check-In, and online pre-book. Time will tell which elements will become the new normal and which will go back to the pre-COVID experience, but we let the guest experience lead. We also enable the pre-booking of airport ancillary products such as parking, hotels, transfers, lounges etc through our booking engine which is deployed on multiple airports websites across the US. This improves the customer experience enabling passengers to pre-book services via a single transaction and helps airports increase their ancillary revenue, especially when coupled with our commercial services. This has helped airports increase revenue from existing sources but also access new revenue streams from hotels, transfers and other ancillary products.

Is it time to redevelop or redefine the airport lounge concept in the wake of COVID?

Customer feedback suggests the core lounge concept is as relevant today as it was before COVID, but we have clearly evolved our processes to ensure the ongoing safety and enjoyment of our colleagues and guests. We recently launched a new concept in partnership with Jabbrrbox, called Escape Pods. These are addressing a similar passenger pain point to lounges by providing a quiet, digitally enabled space for people to Escape but designed specifically for guests who don’t want or need a full food and beverage offer.

How has COVID impacted on your business development philosophy/strategy?

COVID hasn’t really had a negative impact on our strategy – if anything it has highlighted the necessity of lounges as passengers want to escape the hustle and bustle of the airport. We want to keep up with the location requests of our clientele, so we’re expanding faster than ever before. Our new partnership with American Express is a huge step in that direction.

What three things has COVID taught you about aviation and the hospitality business?

COVID has taught me that it’s crucial to be agile. Agility is really everything. You need to be able to adapt to succeed as a business. It’s also taught me the importance of listening to guests and employees regularly as shaping the direction of the business based on their feedback creates a positive, long-term experience for everyone. COVID also showed me the resilience of the travel industry. The people who power this industry are so incredibly resilient, and travel will come back. So many of us have that built-in desire to explore, and we will be travelling again.

Are you seeing any green shoots of recovery in terms of the number of customers returning to your lounges?

Yes, we’re seeing even greater numbers of guests than pre-COVID. Once passenger numbers fully recover, I expect we’ll be doing even better.