Amidst the tumultuous pandemic, airports were forced to endure an incomparable period of isolation, leaving airport lounge operators struggling to cope with harsh restrictions and closures. However, despite these challenges, the industry of airline lounges across the world has managed to thrive.
Now that the pandemic is behind us, airport lounges are experiencing a surge in demand, leading to overcrowding and heightened demand. Additionally, a growing need for new locations to accommodate the increasing number of travelers seeking high-quality airport experiences is the new norm for a perk that wasn’t as essential as it is today.
Plaza Premium Group (PPG) is one of the world’s most prolific lounge operators. With over 1,400 lounges worldwide, PPG is continuously seeking to expand its footprint with a new concept that promises to enhance the customer experience in ways unseen until today.
Pascal Belanger, Vice President for the Americas at PPG, sat with Business Traveler to discuss the company’s upcoming plans, challenges, and intricate inner workings of the independent lounge industry.
Accessing Exclusive Luxury
PPG’s lounge and hospitality operation has over 20 years of experience in offering a range of services, including lounge operation and design, in-airport accommodation, meet and assist, and passenger services.
Premium customers from airlines, credit card programs, and independent lounge aggregators can access PPG’s amenities worldwide, including two new locations in the U.S. – Dallas Ft. Worth and Orlando International Airport.
“There’s a multitude of ways to get into our lounges. It all depends on who you’re flying with, your credit card, membership through aggregators, or simply walking up and paying for entry,” Belanger said. These include agreements with partner airlines that cater to high-value customers flying business or first class.
Furthermore, passengers can gain entry through programs like Priority Pass, LoungeKey, or Dragon Pas – all industry aggregators that send customers to PPG lounges.
Travelers also have the option to pay a walk-up fee at the lounge entrance or use specific credit card entitlements for access.
Challenges and Solutions in a Post-Pandemic World
However, with improved access to lounges, some associated issues exist. Belanger acknowledges the problem of overcrowded lounges—a challenge PPG and major airlines face.
“The expectations vary greatly depending on the type of customer in the lounge,” he said.
Managing overcrowding is a concern, and PPG is exploring solutions like dedicated spaces for airline customers to ensure high-value passengers have access. Additionally, PPG uses data to predict trends and offers alternative programs to accommodate customers when lounges are at capacity.
Belanger also concedes that even though overcrowding can be a problem, having empty lounges can be just as undesirable. “An empty lounge is not something you want to see,” he says. “It’s a business that relies on volume, and we strive to balance revenue and access to provide a high-quality experience.”
Therefore, PPG must ensure that its clients, the airlines, are satisfied with the services provided. “We have airline customers who send us their business and first class passengers. They mingle with other passengers who have a credit card in many locations, and the expectations vary greatly depending on the type of customer in the lounge,” he says.
“It’s clear that everyone wants a VIP experience, with free food and drinks being the most common expectation. However, it’s important to note that the expectations of someone flying first class on a particular international airline may differ from those of others, who are accessing the lounge with a credit card and flying on a domestic, budget airline.”
But, according to Belanger, not only independent lounges are facing this kind of problem—airlines also face challenges in rapidly identifying passengers entitled to enter the airport lounge.
“It can be difficult to determine which passengers in the long line outside the various Delta Sky Clubs, United Clubs, Admirals Clubs, or any other airline’s lounge are entitled to use the facility,” he says. “Some may be top-tier frequent flyers, and others just credit card users who are entitled to get in because they belong to a program that gives them access.”
This, to PPG, is a big contest. “It is difficult for them to distinguish,” he admits. “As the lounges get busier, expectations change.”
“To address this, we may consider creating dedicated spaces for airline customers or certain customers. This will allow us to provide better service to our high-revenue customers by facilitating their access to the lounge.” But Belanger remains bullish and believes “It’s about managing expectations, flows, and optimizing the lounge,” he notes.
According to him, PPG needs to use data to predict trends and have alternative programs available to accommodate customers who cannot access the lounge immediately. “These programs could include weight systems, a lounge-to-go program, or any other program that makes customers feel welcome and not turned away at the door,” he says.
“It is frustrating for customers when they have paid for lounge access, either through flying first class or purchasing a credit card with lounge entitlements, and are unable to access the lounge. We understand their frustration and are committed to providing the best possible experience for all our customers,” he says.
Expanding Globally and Partnerships with Airports
Discussing PPG’s future, Belanger shared insights into their expansion plans, particularly in the United States. With only two lounges in the country, he emphasized that PPG actively seeks opportunities in airports where demand aligns with its customer base.
“We’re currently exploring additional locations in the U.S.,” he reveals. “But finding real estate in desirable airports can be challenging, and the industry is highly competitive. It’s not just a matter of competition between lounge operators, but also with other companies that operate their own lounges.”
The recently opened lounge at Orlando International Airport’s brand-new Terminal C is part of PPG’s next-generation design and customer experience goals. “Our Orlando facility is incredible. It’s a really neat lounge,” Belanger says.
“I believe that the Orlando experience we created and curated has been successful for us. I don’t want to sound biased towards my region, but the lounge truly represents the PPG experience. It combines the Orlando experience with features such as the kids’ area, the interactive wall, the bright decor, and more.”
Much like Orlando, Belanger also treasures the lounges in Cambodia, Singapore, Hong Kong, and many other places worldwide. He highlights the newly opened lounge in Adelaide and highly recommends it.
Financials: How does it work?
Addressing the financial aspect of PPG’s operations, Belanger clarified that the company’s revenue models vary depending on agreements. PPG has global agreements with airlines and direct agreements with others.
According to him, airlines pay PPG for access to their lounges, primarily for their first and business class travelers. Aggregator programs and credit card companies operate on an entry basis, with contracts in place for billing.
Belanger highlighted additional revenue streams, such as upselling premium products within the lounges, sponsorship, marketing activations, and loyalty programs like “Smart Traveler.”
He emphasized that PPG strives to enhance the guest experience while generating revenue. “We try to offer the best experience to our guests, and we want our agreements and activations to enhance that experience,” he noted.
Overall, PPG’s journey through the aviation industry reveals a company dedicated to providing exceptional customer experiences and adapting to evolving travel trends. Their innovative partnerships and revenue generation approach sets them apart in independent airport lounges.
As they continue to expand and collaborate with airports globally, passengers can expect more opportunities to experience the PPG difference in the future.