Airport Premium Loyalty Programme Concept

[litey]

So as you may have seen in my introduction thread a couple weeks ago, I'm working on a concept for an airport loyalty programme at BNE as part of a university assignment. I thought I’d share with you the concept I have put together so far.

Based off Schipol’s Privium, the programme would differ slightly from the traditional frequent flyer programs in that it’s more of an added service that makes flying more comfortable than a reward for being loyal. Essentially, users will pay an annual membership fee which grants them access to various facilities and benefits.

At this point I am looking to set the membership fees at around $300 to remain competitive with the Qantas Club ($470 - $390 p.a. + joining fee) and Virgin Australia lounge ($420 - $300 p.a. + joining fee).

My initial plan was to include things like lounge access, premium parking allocation, a customer assistance hotline, free WiFi, an exclusive security lane, discounts and promotions from retailers. Other possibilities that I have considered are parking points that can be redeemed for free parking or discounts and entertainment facilities such as a children’s playground or driving range.

Any comments and thoughts are more than welcome, Cheers.

 

[docjames]

How are you modelling for the fact that people travelling sufficiently to benefit from your program will be getting most (all) of these benefits from their preferred airline(s)?

 

[dk4]

...to remain competitive with the Qantas Club ... and Virgin Australia lounge ....

I think the thing that makes Qantas or Virgin’s lounge programs of interest - is that they have a network of lounges for members to use. Paying the same sort of price and only getting a lounge at one airport, is not going to be particularly good value IMO.

I am by no means discounting the idea of BNE Airport operating its own lounges within its terminals, just suggesting you focus on how to market the idea.

Assuming a BNE run lounge at the International Terminal and a BNE run lounge at the domestic terminal (base of the middle finger pier) then you might want to investigate a package where BNE program membership was linked to “Priority Pass” lounges, “Servisair” lounges, “Diners Club” lounges…. so members also gain access to a global network of lounges. Or even working it in combination with other Australian Airports to create a third party network of lounges across domestic and international terminals within this country.

As a point of difference for buying the BNE Airport Card (rather than a Priorty Pass Card, Diners Club, Servisair…etc to gain access) you should consider “Any Time Access”, so that those who are picking up and dropping off others at the airport, can still access the lounge when not actually departing from the airport. (Something that neither domestic airline offers for sale, but Virgin offers (complimentary) to "high status" members of its own loyalty program.) *as per docjames above, investigate the competitive implications of airline status a little more, not just club memberships.

If you want to consider priority queues, there seems to be only two bottlenecks at which these can be implemented – security and immigration. At the International Terminal this would piggy back on the existing “Express Path” system, and at the Domestic Terminal this would have to be an airport operated priority lane, at the middle finger pier security screening station. However, the airport might also want to enforce a rule, onto all airlines at BNE which operate priority boarding and priority check-in facilities (the two other bottle necks at airports) for some of their own passengers, that when they do so, they also include BNE Airport Card holders with the same access.

You could consider other advantages to members around ground travel (getting to and from the airport); e.g. reduced rates for parking (as well as your premium parking), valet car services, limousine or airtrain discounts… etc

And yes, definitely look at programs that the precinct retailers can buy into, to help them promote increased sales opportunities to the airport’s most frequent users. And a local concierge on the ground at the airport (accessible via the phone) for all types of assistance (linked to the concierge network). Special events for card holders...

Good luck, interesting concept.

 

[harvyk]

So if I've got this right, the loyalty program is for being loyal to airport rather than the airline?

It could work in cities where there are multiple airports, but at price of $300 it would need to be one very special experience given that QP and VA lounge can be had for the above amount which gets you into lounges of varying quality right around the world.

It would also need to be available across all terminals for the idea to work, so in the case of BNE, it would need to be usable in both Dom and Int.

As for the experience it would need to be at SYD F-Lounge standard before the outlay of $300 for a single airport lounge becomes even close to worth it IMHO.

What would probably work better, is something like an airport club, where there is a nominal joining fee (eg $50 per year), and that then provides a few things such as reserved parking for members close to the terminals, priority security screening, priority customs \ immi, and then make lounge access either a pay per use, or free entry but drinks and food are not included.

Just a thought

 

[SeatBackForward]

Why not go the other way and provide access to lounge features for people who DON'T Travel frequently?

 

[harvyk]

Why not go the other way and provide access to lounge features for people who DON'T Travel frequently?

Because I still remember the first time I flew (as well as the first time I flew recently before getting an FF card), and the whole airport experience was just so overwhelming and exciting that I didn't really care that the seats where not overly comfortable, that I had to pay $5 for a can of coke. Entering a lounge was not high on my list of wants. In fact it was only at the end of my first year of flying (where I realised that had I been a member of a FF program and pooled all my flights to QF, I'd have made PS) that I started longing for a lounge. (An apology entry into the ADL QP also helped my desire, I do admit I called virtually everyone I knew and told them where I was in a very excited tone)

I guess you could say lounges exist for those who are bored of the general airport experience. Chances are a once a year flyer is not yet bored of the general airport experience.

 

[SeatBackForward]

There's this at DFW:

The Club Airport Lounge Access

 

[drewbles]

Why not go the other way and provide access to lounge features for people who DON'T Travel frequently?

These already exist though. You can join Priority Pass or individual airline lounges like QF or DJ giving you access to lounges when you travel.

Privium also has ties to the US Global Entry System, making this a very very different proposition. The fact that Privium members can qualify for US Global Entry makes this program infinitely more valuable than just an Airport VIP program IMHO.

As someone eligible for Dual Citizenship with the Netherlands, I am seriously considering just getting my Dutch Passport to be eligible for this, even if nothing else.

It's an interesting concept, but as harvyk points out, being loyal to an airport is not so useful when there's an effective monopoly (and in the case of MEL vs AVV, it's a no brainer as AVV is essentially only Low cost carriers with no lounges, no international flights (yet) and no facilities other than a few shops.

 

[MEL_Traveller]

I have seen an airport loyalty scheme only once in all my travels - at Lousiville Airport in the states. It is serviced by multiple airlines, but only maybe 4-5 flights by each airline each day, and an average DC-9 capacity per flight (some are MD-80s and some are ERJs).

As such no airline operates a lounge there, so the airport built its own, which you pay an annual membership fee and get your free can of coke and cup of trail mix.

If you are flying around Australia, say from BNE, the problem is that you also have to return to BNE. So paying $300 just for a lounge at the start of your journey is not really worthwhile. You still need a separate membership for each and every other airport you travel back from.

Of course the logical alternative to all that is just to have a Virgin or QF membership and fly with one of those, then problem solved. Or get status.

 

[albatross710]

My understanding is that the retailers on the airside have improved their turnovers as people have to mill around for longer, get bored and spend money.

The business traveler is well serviced with QF & Velocity lounges so they aren't going to pay the price.

What can you identify as of interest to non regular travelers whom would be willing to pay for additional services? For instance:

Would people leaving on the 2:45am EK flight like to really arrive at the airport at 7pm, have a meal and sleep for 6 hours, and shower before boarding.

Would people transiting from regional Qld like additional services?

Would parents of young ones like to drop the kids and dine in peace before sitting with the kids for the next 8 hours?

What additional services could be offered to the older travelers whom may have cash but no longer airline memberships?

What is your proposed distribution? What if it could be priced as an add-on for travel agents to sell on top of tickets? "Well you have a 2 hour wait in Brisbane so we suggest this $80 package to enjoy a romantic meal overlooking the runway." On the $8,000 booking, it would be a great start to the journey.

Priority handling upon arrival would be great.

Enjoy the experience.

 

[harvyk]

Would parents of young ones like to drop the kids and dine in peace before sitting with the kids for the next 8 hours?

Yes, very much so...

One of the things I loved about the QP in SYD end of last year with the kids was the kids zone. Being able to let the kids stretch their legs, and have something to do whilst killing a couple of hours between flights was pure bliss for Mrs Harvyk and me.

So maybe a better thing to do open is a kids lounge, with the emphasis on entertaining the kids whilst Adults can sit back with a coffee or a beer. As both QF and DJ already take care of us grown ups and both offer paid access in a far greater number of locations than just BNE.

 

[Andyc]

It sounds like you may need to give a little more consideration to what the club aims to achieve.
Is it a loyalty program designed to increase frequency/market share (against OOL?)?
Is it a for-profit business that is designed to make a profit?
Is it intended to be a value-add to benefit tenants?

It could be something else. It could be several of those.

If it was to benefit tenants, I could see value in giving these businesses access to a loyalty program. However lounge access would seem to compete with the airlines (the most important tenants) and lead people away from the other retailers.

Ideas around parking and security are great. I wouldn't suggest free, or even discounted parking. Instead I would just give better parking. Reserved areas, free car wash, discounted/free valet etc. These work because they complement (rather than compete with) the existing offer of the airlines and retailers and don't compromise existing income. Terminal transfers and priority taxi queues would seem similarly strong.

If the program is to be for profit, then that changes the model. All of the above would apply, but suddenly you could do lounges, points earn/burn etc. But there is a risk that you'll compromise the stronger incomes from tenants.

Lastly, its worth considering whether a loyalty club is actually what you want. Maybe a tie in with an existing loyalty club would achieve the same outcomes. Eg. with one of the car hire companies, fly buys, hotel clubs or even some of the completely unrelated loyalty clubs (cinemas, shopping centres, etc.)

Just some thoughts,

 

[Travel Guru]

What would probably work better, is something like an airport club, where there is a nominal joining fee (eg $50 per year), and that then provides a few things such as reserved parking for members close to the terminals, priority security screening, priority customs \ immi, and then make lounge access either a pay per use, or free entry but drinks and food are not included.
Just a thought

Given general short term parking can quickly hit $50 at BNE, I wouldn't think charging $50 for everything listed above would be a very sustainable business model.

TG

 

[harvyk]

Given general short term parking can quickly hit $50 at BNE, I wouldn't think charging $50 for everything listed above would be a very sustainable business model.

TG

Never said free parking, I said reserved parking.
It would still cost the same per hour \ day to park there, except the car park which you where able to use would be right outside the front door of the terminal, rather than a fair way back where the normal people would now be forced to park.

 

[Travel Guru]

Never said free parking, I said reserved parking.
It would still cost the same per hour \ day to park there, except the car park which you where able to use would be right outside the front door of the terminal, rather than a fair way back where the normal people would now be forced to park.

No sorry I know you didn't mean to include it, was merely a reference to the exorbitant costs involved with every other service at BNE airport.

TG

 

[harvyk]

No sorry I know you didn't mean to include it, was merely a reference to the exorbitant costs involved with every other service at BNE airport.

TG

A priority line at immi, blocking off existing car spaces and opening up a couple of bars with nice seating? The first two wouldn't cost them anything, the third would probably make a fair bit of money, considering that either the drinks are charged for, or it costs per visit (membership simply allows the ability to visit), perhaps a small discount over standard airport prices would be in order.

 

[Canny man]

From the response to other threads, all you would need to do is ban high-viz and you would be guaranteed a winner.

 

[wandering_fred]

The best airport loyalty benefit I can recall is the frequent visitor card available through the Hong Kong airport.

Google is your friend if you don't understand what the function of the card serves.

Happy wandering

Fred

 

[MEL_Traveller]

The best airport loyalty benefit I can recall is the frequent visitor card available through the Hong Kong airport.

Google is your friend if you don't understand what the function of the card serves.

Happy wandering

Fred

yes indeed that is a great service. Even better though is the ability to convert your passport to 'frequent visitor' status. They put a barcode on the back of the passport and you put that in the slot instead of the FV card. The barcode lasts for the duration of your passport so no need to renew every year. Saves up to 30 mins of queuing at peak times.

 

[wandering_fred]

yes indeed that is a great service. Even better though is the ability to convert your passport to 'frequent visitor' status. They put a barcode on the back of the passport and you put that in the slot instead of the FV card. The barcode lasts for the duration of your passport so no need to renew every year. Saves up to 30 mins of queuing at peak times.

But not useful if traveling with someone without the same status. The HKFV card has always allowed my companion to join me in the line.

Happy wandering

Fred