Happy Airports Make More Money 27 Mar 2014

During my recent presentation at the Passenger Terminal Conference in Barcelona, I said “happy airports make more money”. What exactly did I mean by this? Some time ago I read an article based on a research study that showed satisfied passengers will spend 45% more on airport retail purchases than disappointed passengers. Although technology has revolutionised air travel during the past decade, passenger satisfaction with airports continues to lag behind that of other aspects of the travel industry, largely because passenger expectations of basic needs are not being met consistently.
It seems that there is a correlation between the best rated airports and those offering the best shopping experience, making more money derived from retailing activities. If we take the Skytrax Awards as a reference, in the last 2 years Singapore Changi, Incheon, Schiphol, Hong Kong and Beijing rank as the top 5 best airports in the world. Three of them also score in the top 5 as the best shopping experience (HKG, SIN, AMS). And four of them rank in the top 5 for leisure amenities (SIN, AMS, INC, HKG) which is also a good source of non-aeronautical revenues for airports.

Does it mean that offering a better passenger experience will drive non-aeronautical revenues? The Skytrax ratings seem to confirm that relationship. For sure some of you will have your own opinion but I, as a traveller, would not spend much at an airport if I were stressed or in ‘grumpy mood’.

The airport experience is very often rated as the least pleasant segment in a trip. It is the first and the last part of a journey so often sets the tone of the overall trip experience. Many passengers just want to get in and out the airport as quickly as possible.

However, sometimes we put bells and whistles on our facilities and forget that passengers are especially concerned with basic needs: short wait times, flight punctuality and prompt baggage delivery. Things like short check-in lanes, a fast, smooth security process and ease of navigation are expected as a minimum. Anything that adds complexity, stress or waiting time causes dissatisfaction.

The equation looks clear: the quicker the walk from the terminal door to the boarding area, the more time and the better mood to spend money at airports.

Airports can increase convenience for passengers by offering airport services as part of the pack of overall travel services. Passengers (or the travel agent serving them) can book their air ticket, hotel, airport parking space, fast track security, airport lounge access and express train to the destination city all in the same purchase action. All travel services purchased together and all travel information available together in the same trip itinerary. Don’t you think passengers would appreciate that possibility? Wouldn’t that make airports happy as well, driving additional revenues and establishing a relationship with travellers?

Thanks to new IT models, enjoying the latest technology no longer requires large capital investments: Basically, I am referring to IaaS and SaaS models. Services are provided in “the cloud”, so there are no overheads to support local systems. You only pay as you use the applications, based on transactions processed. It means that airports will not need to make big investments to purchase new systems or costly hardware or networks. The cost of capital will not impact your airport’s financial results as CAPEX is transformed into operational expenses.  No more hassles getting financial funds and less interest will have to be paid.

Author Tim O’Reilly, thought by many to be the best computer book publisher in the world,  always believed that the internet would develop into a global brain, an intelligent network of people and machines that will function as a nervous system for the planet. Ideally we should aim for a similar scenario in the world of travel.

Currently airports are islands that do not communicate between themselves; however there are common platforms available where they could share instant information. Airports should get ready to take a big leap forward to become the nodes of the nervous system of travel – an intelligent network of passengers, airlines, ground handlers, air traffic controls, railway companies and even cities.

We should all aim to build a global Airport Operational Database (AODB) for the planet to the benefit of travellers. Tomorrow’s airport will be a complex environment that should have the passenger at its heart, collaboration as its lifeblood and innovation as its currency.

(amadeus.com)