Frustration with the poor passenger experience at airports was what led Song Hoi-see, CEO & founder of Plaza Premium Group, to pioneer the world’s first independent airport lounge business
What inspired you to establish Plaza Premium Lounge?
Following my career in investment banking, I started my own business and spent considerable time at airports, struggling to work effectively while on the go. Flying economy class without the airport lounge privileges that I had previously enjoyed, I found that such travel experience was somewhat incomplete.
Driven by a heartfelt desire to do something for the majority, I wished that all travellers, regardless of airline and class of travel, could have access to airport lounges. I wanted to change the stereotype that airport lounges should be reserved for premium travellers only.
I identified an opportunity in this segment and seized an opportune moment to introduce the first Plaza Premium Lounge, the world’s first independent airport lounge concept, at Hong Kong International Airport and Kuala Lumpur International Airport in 1998.
Plaza Premium Lounge has since evolved into Plaza Premium Group and expanded into airport hospitality. What drives the group’s diversification strategy?
Five to six years after starting our airport lounge business, we realised more products could be added into the lounges and the demands (of travellers) kept increasing, so we spun out independent operations such as wellness salon, food, meet-and-greet services, and then we integrated all services into one to offer a seamless service.
In 2015, we introduced Aerotel, our airport transit hotel brand, and Allways, our airport meet-and-greet service brand, to our existing airport lounge and airport dining portfolio, consolidating the group’s evolving businesses into four core pillars to complement travellers’ overall airport experience.
Now we are flourishing worldwide, covering five continents with more than 130 outlets and 35 international airports. Why we expand from airport lounge to other business is not by chance, but by virtue of our understanding of what the passengers require and their needs in the airport. We try to fill up the inefficiency gaps in the airports by developing other services to provide a seamless service (for passengers). A lot of people doing similar business (in airport hospitality) wait for Tarzan to see them, but we go into the jungle to look for Tarzan (laughs).
For my independent lounge business I’m only seeing the tip of the iceberg because a lot of people don’t know that they can use a lounge when they travel economy class. I want to change the perception that the airport lounge is only a privilege available to certain people and we’re happy to change travel patterns and behaviour.
What’s game-changing about the first Aerotel in Singapore?
Most people don’t have high expectations of transit hotels because they think it’s a place where they sleep for just a few hours. But we have a different view. As travellers become more affluent and demanding, they want better quality of service. We do not want to just satisfy customers’ basic demands; we want to give them more than that.
Singapore is a major transit hub, and when passengers spend six, 10 or even 12 hours at the airport what do you expect them to do? We create recreational products to (complement) transit hours. They can spend a few hours sleeping, therefore we sell our hotel in six-hour blocks, unlike other transit hotels which are booked for 24 hours.
Aerotel Singapore is the first transit hotel with an outdoor swimming pool, poolside bar, jacuzzi, massage services, gym and library facilities, alongside 70 premium rooms. Another special characteristic at Aerotel is our pillow menu. Our quality is value for money – you get five-star hardware at three-star prices.
Why did you choose to launch Aerotel in Singapore over other hub airports?
Singapore is the best airport in the world, and when you want to showcase the best of what you can do in aviation, obviously you go to the best airport to showcase this. We’re very glad that Changi recognises our services. We were lucky that when Changi renewed the concessions we bidded and won the tenders.
The first Aerotel landed in Singapore Changi Airport in October 2015, with subsequent openings in Abu Dhabi International Airport and London Heathrow Airport scheduled for 2016/17.
How do you differentiate your lounges from that of airlines’?
A lot of people ask if we are competing with airlines. Our lounges started by taking care of people not taken care of by airlines, i.e. the remaining 85 per cent flying on coach. But does it mean that a few per cent of this 85 per cent do not require this service just because they do not want to play double or triple the price of an economy class ticket? However, a lot of airports ignore this 85 per cent.
Airlines do not want to operate lounges. For example, Singapore Airlines does not operate their lounges, they outsource it; likewise for Cathay Pacific. A lot of premium airlines do not want to touch the lounge (area) because it’s not their forte.
We have been here for the last 17 years, and in the last 10 years airlines started recognising us, so we have been managing airline lounges for Singapore Airlines, Cathay Pacific, Lufthansa, Thai Airways, United Airlines, etc. We take care of the HR, F&B, cleaning, everything.
Except for the front desk where (airlines) have their own people, the rest is taken care of by us.
What’s your expansion plans for Premium Lounges?
The latest ones opened in Singapore, Phnom Penh and Salalah – which is the second one we’re opening in Oman after Muscat – with Siem Reap and Brisbane expected to open in the next few months. We will open in Taiwan Taoyuan and Rio de Janeiro by April before the Olympics.
Our plan by 2018 is to launch 200 outlets and we have allocated over US$100 million for our (overall) expansion, with US$56 million budgeted for Premium Lounges, up from US$40 million.
Who do you think will be interested in your meet-and-greet services Allways?
A lot (of people). For example, when corporations have an important guest arriving, we can meet them at the gate and bring them out to you. Or imagine an old mother coming to Hong Kong or Singapore while you are travelling overseas and you are worried if she can go through the airport on her own, contact us. Others like lovers can use our service as a surprise.
This service is available at Toronto Pearson International Airport and New Delhi’s Indira Gandhi International Airport, as well as Singapore, Macau, Kuala Lumpur, Muscat and London Heathrow.