With aviation booming, millions of travellers are criss-crossing the region. Plaza Premium Lounges founder and CEO Song Hoi-see offers his insight into how rising demand is affecting the industry
Millions of passengers pass through Southeast Asia’s airports each year. In a region boasting an abundance of renowned tourist destinations, increasing disposable incomes and growing business hubs such as Jakarta and Kuala Lumpur, air travel has become hugely popular.
Serving the needs of many of these travellers is Plaza Premium Lounges, a chain of independent luxury airport lounges that doesn’t discriminate against passengers – whether they are travelling first class or economy, Emirates or Air Asia – as long as they are willing to pay.
The group was founded by Song Hoi-see, a former investment banker, after he started his own business and began flying economy class, only to find the travel perks he had previously enjoyed were no longer available to him.
That was 17 years ago. Plaza Premium Lounges now has 130 lounges in more than 35 airports worldwide, with an eye on major expansion in the coming years. According to Song, who is also the company’s CEO, the firm “aims to achieve a total of 200 locations by 2018 with an investment of more than $100 million”.
Many of these are likely to be located in Southeast Asia – Kuala Lumpur was one of the first targeted back in 1998, along with Hong Kong. Phnom Penh International Airport is the latest addition, with a lounge opening there this month, to be followed by Siem Reap.
It is little wonder the group is keen to expand in the region, where the aviation industry is expected to continue building on recent growth. The International Air Transport Association expects that travel to and from Asia-Pacific will account for nearly half of all air travel – some 2.9 billion journeys annually – by 2034. According to Boeing, Asia is adding 100 million new passengers each year. In Southeast Asia alone, passenger numbers are expected to grow by 6.5% annually over the next two decades.
A key factor in all of this, said Song, is the rise of low-cost carriers (LCCs), which have become increasingly dominant in the regional market. “The growth rates in the Southeast Asia region are above the industry average given the socio-economic situation of the countries concerned,” Song said. “With the expansion of LCCs in the region, travellers can fly cheaper, smarter and force traditional airlines to be relatively price-competitive.”
Yet, at the same time, people in the region are becoming more affluent as economic growth continues, increasing expectations about the services offered to travellers. “With the rise of the middle class, more quality airport facilities and services will be in demand, together with a sustainable growth in intra-Asean and cross-continent travel,” Song predicted.
The advent of budget airlines has opened up air travel to people around the world who otherwise would not be able to afford it. But some commentators have drawn links between recent aviation disasters – such as the crashes of two Malaysian Airlines jets and one Air Asia aircraft in Indonesia – and the increased pressures that tightened budgets are placing on flight crews. Song said he believed the tragic incidents were not the start of a trend.
“While, unavoidably, we were affected to a certain extent, we believe that the crashes were individual incidents and the level of travellers’ confidence in this region will gradually bounce back,” said Song. He added that if airlines can demonstrate their focus on safety and determination to improve, the impact on the region should not permeate beyond the short term.
Another key trend in the industry, according to Song, is airlines moving toward cost-cutting models through the application of technology: allowing online and mobile check-in, and providing self-service kiosks at airports. The immigration process is also increasingly moving toward e-channels, all of which is removing “the human touch”.
“Service with a human touch actually plays a fundamental role in the travel hospitality industry,” Song said. In this vein, he would like to see airport authorities evolve in the future by “becoming more customer-centric and exploring innovative ideas in the service industry”.
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