This article was originally written for and published in Regional Gateway magazine Volume 4, Issue 2. With cash-strapped airports under increasing pressure following the global pandemic, I attempt to understand how airports can generate more revenue from fewer passengers.
The secret you already know
As the air transport industry emerges from all of the uncertainty brought about by the global pandemic, one thing remains very certain indeed - the need for airports to make more money per passenger from non-aeronautical revenues. It’s not a revelation. Airports have always been under pressure to generate revenue from non-aeronautical streams, it is just that pressure has now ramped up a notch.
Whichever prediction you choose to subscribe to about when we’ll be back to 2019 levels of passenger traffic, there will undoubtably be long-term changes to passenger expectations and requirements even as the numbers increase. However, it’s not all bad. If airports find a way to meet passenger needs and communicate effectively there are ways of providing supplementary services and conveniences that passengers will pay for. For example, more passengers will be avoiding public transport and will want to use car parking facilities. Airports need to make the most of this with good yielding models for prebook parking products. And if your airport doesn’t currently provide same day booking on your prebook parking system, you need to.
Many challenges remain the same as before. I frequently hear airports talk about the lack of knowledge they have on their passengers. Data is held by the airlines and that can make the effective communication about airport products and services tricky until they are on site. Which brings us to another problem.
One of the strategies that has previously been applied to improve passenger spend has hinged on airport dwell time. The theory being that by increasing the time a passenger spends in an airport by making it more enjoyable and productive, the more money will be spent. However, that’s probably not going to be the right approach for some time. Safe, swift passage is the number one goal for passengers these days and a just-in-time yet low-stress delivery at the gate will get you a happy passenger who is willing to come back that bit sooner.
Technology can help you deliver this. In order to achieve that low stress just-in-time experience, your passengers need up to the minute information. Passengers need better access to live information on everything: traffic and directions to the airport; terminal and parking instructions; what’s expected of them in the terminal building; security wait-times and live flight data. What’s more they don’t want to have to wander around the building to get it. They’ll be using airport and airline websites and apps more than ever before – not just at the airport, but at home and en-route too.
This is where opportunity lies. Airports can use this increased digital interaction to their advantage in 3 ways: Improved passenger data collection; providing a shop window for premium airport products and services; an alternative mechanism for supporting onsite partners such as retail and food and beverage (F&B).
When we designed the early versions of the websites that would go on to form the basis of the Hangar suite of digital tools for airports, our main goal was to solve a problem that we coined “The Dichotomy of Desires”. Let me explain.
On many websites the user and the site owner want the same thing. If it’s e-commerce, the user goes to a store to buy something and the store owner is happy to oblige. But for airports this isn’t the case. In our experience 80% of all traffic to airport websites is for one thing – live flight data. So, no matter how much airports want to push parking, lounges or other products, there is a danger that this could interfere with the user’s goal and tarnish their experience.
The way to solve this is of course with contextualisation. By being unobtrusive and tailoring an experience for the user commercial messages can be mixed into the journey appropriately and in the right context. After all, it’s vital an airport never loses sight of the fact that a passenger is using the site to achieve a smooth, safe convenient passage through the airport.
One of the ways we make this work at Hangar is with our personalised timeline tool. By using data gleaned from the user’s behaviour and other available data we can ensure that we provide them with information most relevant to them at that time. We can also decide which commercial messages are most appropriate in that context. Starting with the premise that users are more than happy to provide us with a very powerful piece of information – their flight number - we can determine when they should arrive at the airport, if they are arriving or departing, where they are travelling to or from and at which terminal or part of the airport they’ll be.
The right information at the right time
If we then weave in data such as the user’s location and the current time we know even more – such as if they are running late or early. By building up a picture of the user we can present them with a digital experience that provides the information they need and presents more appropriate and therefore more effective commercial messaging. Passengers don’t want generic information, they want information that’s tailored to them. If they’re in the terminal building they don’t need to know about parking as they’re already there. However, if they’re running late for their flight they are likely to be interested in fast track security and they’re often happy to exchange contact details to receive push notifications on the status of their flight.
There are many, many exciting tools and services that allow you to provide a digital shop front for real-world, on site services and products, whether that’s parking, F&B, currency exchange, duty free or anything else you can get at an airport. But the key to getting passenger buy-in is to provide them all in the context of personalised convenience.******
Hangar specialises in building digital tools designed specifically for airports to serve content effectively to passengers via their website and associated digital channels. Hangar’s experience comes from two decades building digital systems for airports including its sister product, AeroParker the pre-book parking ecommerce platform.