We take a closer look at the growth and development of the Plaza Premium Group, which has evolved from being a lounge operator to one of the biggest airport hospitality providers over the last 25 years.
The enthusiasm and desire to grow his business still burns brightly in Plaza Premium Group (PPG) founder and CEO, Song Hoi-see, who has seen his company grow from humble beginnings to become one of the biggest names in airport hospitality over the last twenty-five years.
This determination to never sit still and rest on his laurels has led to further expansion of PPG’s global offerings this year and the development of digital technology that could potentially open up new opportunities for travellers and revenue streams for airports and their service providers.
Building on the forward momentum PPG gained during the pandemic when instead of battoning down the hatches and riding out the storm it invested $120 million on almost doubling its presence to over 300 locations across five continents, it has opened new airport lounges at Adelaide, Amman, Kuala Lumpur, Nagoya and Rome already this year with more to follow.
While in Hong Kong, Song’s home city, PPG has opened a new cocktail bar in the airport’s iconic Sky Bridge that has already proved a massive hit with travellers.
The new concept, called ‘Intervals’, provides customers with the chance to enjoy a drink and dining experience in a setting that arguably offers travellers the best view of the airfield at HKG due to its location 28 metres above the ground in the world’s longest airside bridge.
Talking about the thinking behind the launch of ‘Intervals’, PPG’s director of global brands and transformation, Mei Mei Song, said: “We wanted to make it a destination in its own right that would make people purposely change their habits and even want to transit through Hong Kong just to experience it.
“It’s a beautiful bar with a beautiful view whose concept is inspired by the time of the day becoming fluid while travelling. Airports have pubs and bars, but not really a cocktail bar and certainly nothing like this, which really is unique.”
Its opening means that in addition to airport lounges – which today include the more exclusive Plaza Premium First lounges for customers that want a more elite service – PPG’s hospitality services now cover hotels (Aerotels), mini-hotels/shower rooms (Refreshhh by Aerotel), VIP meet and greet/airport concierge and passenger services (Allways), airport spas and salons (Wellness Salon) and a host of standalone F&B facilities at dozens of international airports across the globe.
Beijing Capital (PEK), Dallas/Fort Worth (DFW), Frankfurt (FRA), London Heathrow (LHR), New York (JFK), Orlando (MCO), Rio de Janeiro (GIG), San Francisco (SFO) and Singapore Changi (SIN) are among the 250 international airports that boast a PPG lounge today as the hospitality business employs some 3,500 staff and serves around 20 million passengers annually.
It is a global success story, yet it all might not have happened if it hadn’t been for the persistence of Song Hoi-see as he admits that many people thought he was crazy when he first pitched the idea of opening a series of independent hospitality lounges at the world’s airports in the late 1990s.
Indeed, he had to do a lot of convincing to persuade Hong Kong (HKG) and Kuala Lumpur (KUL) to allow PPG to open their first Plaza Premium Lounges in 1998, and despite their incredible success since, he reveals that even today some airports tell him that they don’t believe that they will work!
Song comments: “It wasn’t easy in the early days and was quite challenging because the concept of independent lounges was a totally new concept and it was felt that lounges were only for CIPs [commercially important person] and that we would be competing against the airlines.
“We needed to change this mindset as there was clearly a gap in the market as, back then, lounges were only for premium travellers, which meant that the needs of 85% of passengers were not being met.”
Getting the financial institutions onboard by providing them with access to its network of lounges proved to be a masterstroke for the Plaza Premium Group in terms of the development of its lounges, whose success has paved the way for the evolution of its business into the wider hospitality industry.
Song notes that you only have to look at companies such as American Express, Capital One, Chase, Visa and Mastercard who all have their own airport lounges today to see how popular this concept is with the financial sector.
Expanding the business
Was the plan to always expand PPG’s airport hospitality business beyond lounges? “Yes, absolutely, and we have done this by observation and listening and learning from travellers to identify gaps in the market and introducing other facilities and services that meet those needs,” says Song.
“Seeing people sleeping on the floor in airport terminals and hearing that many of them couldn’t afford the price of a traditional hotel or didn’t want to pay for a room for 24 hours when they only wanted to stay for three or four before their flight, for example, gave us the wisdom to launch our hotel business.
“Called Aerotel, they are very different to conventional hotels because they are specifically built and priced for travellers who want to stay for only a few hours.”
He continues: “In essence, our hotels serve four types of client – the passenger who arrives at their end destination early in the morning and cannot check into their main hotel until later in the day; travellers whose flight leaves very early in the morning so they want to be at the airport in advance; travellers facing long delays at airports; and transfer passengers with four or five hour plus layovers.”
Launched in 2016, PPG currently has 11 Aerotels across the globe that offer a mixture of airside and landside accommodation at airports that include Singapore Changi and London Heathrow.
Talking about expansion in general, Song noted: “Expansion has always been important, and remains crucial for the company if we are to maintain our status as a leader in airport hospitality. We do this both laterally, by developing our existing products, and horizontally through the launch of new service offerings.
“Expanding horizontally requires understanding the constantly evolving behaviour of travellers and identifying areas in their journey which could be improved to essentially enhance the airport eco-system and passenger experience.
“All our concepts, from our Allways meet & greet service to our various airport dining concepts have been developed to suit the evolving travel needs of passengers.”
“We are in this business for the long-term and will continue to grow and develop our business for the next generation of travellers, the only thing that concerns me about the future is that other short-term investors who think aviation is a goldmine will try and copy what we do but not do it well, which will damage the whole hospitality business.”
PPG is most definitely a family affair for the Song famiy as in addition to dad and daughter, Mei Mei, son Jonathan works for the business as the company’s global director for business development, following and building on his father’s strategy and direction.
“Expanding our hospitality business from 160 to 300 locations over the last three years has been challenging and rewarding,” said Jonathan Song.
“From the lounge perspective, we have grown from just providing independent lounge services to operating lounge services on behalf of strategic partners such as the airlines, alliances and financial institutions.
“Our aim is to make travel better and to do that you have to offer a number of different services and products across different points of the passenger journey. There is much more to come from us as we are just at the beginning of our journey.”
Digital technology and big data
Song notes that technology plays a key role in the planning, journey and travel enjoyment of today’s tech-savvy passengers, and PPG has responded to this by embracing technology across its hospitality portfolio and developing new ways of gathering and sharing data.
Its Smart Traveller mobileApp and oneTECO (Travel Experience Ecosystem) software, for instance, has also allowed PPG and the wider airport community to know what travellers want at different stages of their airport journey, communicate with them directly, and make personlised offerings.
In essence, oneTECO is an all-in-one platform that simplifies the booking process for business operators and consumers and includes an omnichannel booking engine that enables worldwide sales and distribution, a customer engagement centre with customer profiling and personalisation capabilities, and a data analysis system.
Song explains: “The intention behind the development of the App was to create a way of consoldiating all airport services into one platform to make life easier and more convenient for passengers. In the future, we will introduce a duty free element which would, say, identify that a passenger flying to London loves whisky and allow them to buy a bottle of whisky direct from the duty free operator in London who would have it waiting for them on arrival.”
The platform has taken more than three years to develop and is currenty being deployed at Hong Kong and Bengaluru Kempegowda airports and, after some fine tuning, is expected to be expanded globally later this year.
Song notes that Smart Traveller, PPG’s own loyalty programme, allows its airport hospitality customers to accumulate reward points, which can be either be used to purchase or obtain future discounts on any PPG service or converted into points for use in a partner company’s reward programme.
Is the hospitality industry today very different to one that existed when PPG was born 25 years ago and, if so, can you say what the big difference is from your perspective?
Song replies:”Everything has changed and airports are not the same places they were 25 years ago. Also, travellers’ perceptions of airports and, and indeed air travel and their journey through the airport, is totally different today than when I started the business.
“Today’s passengers are more affluent and discerning. They know what they want and they expect efficiency and good customer service as standard. People want to enjoy the airport experience. Lounging, for example, has now become a culture, lifestyle and a part of the air travel journey that any traveller would expect to have at major airport hubs.
“Another big change, of course, is the evolution of technology. It plays a key role in almost everything we do today and we expect that its use will only grow in the future, especially through the better use of data, which can take customer service and customer interaction to the next level.”
Whilst never forgetting the crucial role people play in ensuring customer service excellence or five-star hospitality, Song believes that our reliance on technology will significantly increase in the years ahead as future generations will almost certainly prefer digital solutions to face-to-face interaction with others.
“The younger generation seem to prefer less human interaction when they travel, but they still need services, and if you can develop a system and a company that can communicate with them effectively, you will be a winner in business,” enthuses Song.
“Labour used to be the way people progressed and made money. Then it was the brain and now it is technology.”