Chris Gwilliam, senior vice president of global business development at Airport Dimensions, explores the challenges and opportunities facing airport operators for the rest of 2024 and beyond, based on the company’s recent survey of 9,000 travelers across 16 countries
In global travel, airports serve as a pivotal junction between destinations, offering travelers their first impression and their last experience of a city or country. The latest annual report from Airport Dimensions – AX24: The Age of Airport Experience – surveyed over 9,000 travelers who took two or more return trips in the previous 12 months. It reveals that in 2024 we have reached a watershed moment for traveler preferences.
Airport Dimensions has been formally charting the views of regular travelers since 2014. During this time, we have seen satisfaction levels rise from 54% when first polled to 72% in 2023. However, in 2024 satisfaction has been eroded to 70% as passengers’ needs and desires have dramatically shifted. This is the first decline since our research began.
The preferences and requirements of travelers, particularly among younger generations, are changing faster than airports in some markets can keep up with. Indeed, passengers’ satisfaction as they travel through landside, departures and airside facilities declines as their journey progresses, and only starts improving when they get to the gate. Our AX24 research shows that passenger satisfaction is at a tipping point and emerging markets are setting new standards and expectations.
The most valued basic improvements are comfortable seating (83%) and a reduction in queuing times (79%). However, when it comes to airside discretionary spending, dining experiences and lounge access come out on top. With this in mind, there are further revenue growth opportunities available to those airports that establish the right experiential retail services and improve overall customer satisfaction.
Pivot to new experiences
Younger travelers are now seeking more fulfilling and experiential airport journeys and their spending patterns are altering to reflect this. They favor innovative experiences such as VIP shopping experiences, exclusive F&B options, sleep suites and electronic gaming, which account for 28% of travelers’ discretionary spend overall. There is plenty of scope for airports to adapt to ensure they can bolster dwindling passenger satisfaction rates by meeting travelers’ demands to offer experiences that go beyond the utilitarian.
It is worth noting, however, that catering to the appetite for new experiences should not be at the expense of delivering basic services. For example, 79% of travelers want a reduction in queuing during their airport journeys, highlighting how airports must maintain basic standards in pursuit of unlocking further revenues. It is also important to note that these findings are nuanced across passenger segments, with the expectations of older travelers being angled toward utility. For example, this demographic is twice as likely to spend on functional services such as airport parking when compared with younger travelers.
Positive customer engagement
In total, 93% of travelers say they are open to having a relationship with their airport. However, our research findings show that only 17% of travelers are receiving regular emails from their preferred airport and 21% receive no marketing interaction whatsoever. Evidently, there is a wide engagement gap to be bridged by airports to increase resonance and dwell time, thereby unlocking more appetite for spending.
Indeed, 58% of travelers say they would be encouraged to purchase via airport e-commerce sites if these were better promoted and marketed. E-commerce has become the new normal for many travelers as they have pivoted to favor services that can be booked online. Our research shows that 71% of respondents would like a single app for all services. This highlights the growing importance and influence of new digital services for improving passenger experiences. Consequently, airports could be leaving revenue on the table when they are slow to marry up their customer engagement and e-commerce strategies.
The importance of a digital dialogue with customers cannot be overstated. Moving forward, airports could leverage better access to data and insights to explore and test new propositions such as paid loyalty programs, which have proved successful in airport and wider consumer markets.
Retail revolution
Like much of the retail industry, the traditional model of airport retail is rapidly evolving and experiences are taking center stage. This shift presents challenges in many areas. However, once these are overcome, it also presents new opportunities for revenue growth and improved customer satisfaction.
In terms of their discretionary spending, our research shows that travelers are willing to spend on better dining (15%), more lounge access (13%) and new experiences such as sleep suites and pods (9%). This has come at the expense of some more traditional retail models, although concepts such as walk-through duty-free remain popular, with 53% of travelers stating they would like to see a greater offering. Clearly, integrating retail with airport lounges is important to travelers, as 48% of respondents would like to see more branded showrooms and 50% would like to see more hybrid retail lounges sponsored by leading brands.
Of course, shoppers’ habits vary across different markets and there is a real opportunity for retailers to follow the pivot to experience. This is especially true in APAC markets in the Middle East and Asia, where travelers display a higher inclination toward airport shopping experiences.
Lounge demand is growing and democratizing
The desire for lounge access is growing and shows no signs of slowing down. In the markets surveyed, 30% of respondents paid for direct access to lounges in pursuit of a better airport experience – 70% of travelers believe that lounge access improves their time at the airport.
Long gone are the days when lounge access was solely the domain of business travelers. Our research highlights the increased influence of leisure and lifestyle considerations. We have already seen that passengers’ discretionary spending is altering, and lounges now rank second in their spending priorities, overtaking shopping.
Indeed, leisure-oriented activities have displaced business productivity as a key customer lounge requirement, with business facilities now ranking as the lowest motivator for purchase intent. Food and beverage propositions are now vital in lounge access purchasing decisions, with 79% of travelers ranking in-lounge F&B as a more important factor than the cost of lounge entry.
Clearly, the common denominator across all the themes mentioned is that the needs and desires of travelers are changing at pace – particularly among the younger generations. With travel set to grow again this year (expected by 8% by the 9,000 travelers surveyed across the 16 territories for AX24), airports should consider how they can seize and build upon this opportunity, working to overcome capacity constraints. New ideas and technologies are required for airports to pivot from a focus on facilities to meet travelers’ evolving needs and expectations for enhanced experiences.
In related news, Airport Dimensions, SSP and Travel Food Services have formed a new partnership to offer travelers an exclusive lounge destination at Hong Kong International Airport (HKIA). Click here to read the full story.