In his latest column dedicated to travel retail and aviation, our India Editor S. Shriram says the story of airport lounges in India is a tale of two phases – before and after Jet Airways and Kingfisher. Today’s model is less formal, easy to access and far busier, he says.
I fondly recall the stressful (yet happy) days before the inauguration of the Kingfisher lounges at Bangalore International Airport’s domestic and international departures in 2008. The respective teams from the airline and the airport were on their toes for several days and nights, lending the finishing touches to offer not just a premium look and feel but also to make sure the atmosphere was warm and inviting.
The facilities had to be exclusive, distinct in their aesthetics and, most importantly, make the guest feel privileged. Unless the passenger was travelling on business or first class, he or she was not entitled to use the premises. Non-Kingfisher passengers classified as VIPs and CIPs (commercially important people) were also denied access.
Cut to March 2023. I was at Indira Gandhi International Airport, Delhi flying back home after a two-day work trip to the country’s capital on assignment for The Moodie Davitt Report. There were at least 40 people waiting to enter the lounge in domestic departures. The facility, run by Encalm Hospitality and called Encalm, is located on the upper level, at least a ten-minute walk from completing security check. It also requires a minimum 15-minute journey from there to reach the closest boarding gate.
The physical distance is clearly no deterrent. Passengers have been flocking to airport lounges during the past two years, especially when the COVID-19 restrictions were restored. In the ensuing period, many passengers, especially those travelling for work, have preferred to access the lounges instead of the packed seating areas or overcrowded food courts.
That popularity has been boosted by certain banks that offer three to six complimentary usages per debit or credit card per year for their customers. The consumer only has to pay between INR2-25 (US$1 – INR82) per visit; the cost of access (INR2,000/US$25) is usually borne by the bank (or the issuer such as Visa or Mastercard) and is bundled as an enticing hero offer to onboard new customers.
HDFC, ICICI, SBI, Axis and American Express are among the top banks which offer their Indian customers complimentary lounge access through a tie-up with Priority Pass.
As of March, India had 945.58 million active debit cards in usage, up from 828.6 million in March 2020, according to Statista.com. By comparison, there are a mere 8.25 million active credit cards. Being a savings-led country for several decades, it is normal for Indians to spend what they have already earned for day to-day usage, while saving for home and automobile loans.
If one were to take a very small percentage of card users who use airports, say thrice a year, it makes a lot of sense for such passengers to use the lounge facility to ‘feel the warmth’.
Interestingly, the lounges also earn revenues from the second guest (albeit a small percentage of total users) who accompany the primary visitor and who otherwise are not entitled to complimentary usage. This ‘spend for lounge access’ is seen by the user as an occasional discretionary spend.
Here are the top three reasons in my opinion why many first-time users visit lounges at Indian airports.
Pride, food and prestige
One is a sense of pride. To take photos inside the lounge, either alone or with travelling groups and sharing it on social media platforms, is considered an elevated travel experience.
Secondly, food is a big draw. Usually, it is a limited buffet spread, yet it is complimentary and so it makes a lot of sense to arrive early and eat.
Finally, it is not often one gets to enjoy such a socially gratifying experience. Lounges were traditionally meant for usage by discerning, high-end travellers, notably those flying business class and above. So when a passenger flying economy class in a low-cost airline gets to experience a premium lounge for nil-cost, there is a feeling of satisfaction,
However, many business travellers are frequenting lounges less often these days. Those who know their routes within airport terminals quickly navigate from the entry gate to the boarding gate, with limited dwell time reserved for shopping, dining and ‘lounging’.
Should they prefer lounge usage for in-person or digital meetings, they can use their debit or credit cards to allow complimentary access. But some regulars complain on social media of overcrowding at certain lounges, too much noise and chatter and loss of privacy and serenity, one of a lounge’s key intended purposes.
However, the overall burgeoning airport lounge-usage is a boon to lounge operators such as Collinson Group as well as the F&B partner, which often is also the airport F&B concessionaire. They maximise their assets and employee resources, while realising incremental revenues with limited additional effort. If the airport gets credit and positive reviews on social media platforms, it’s a win-win for all.
In a recent online interview with The Mint, Collinson Group Country Director – India and South Asia Sumit Prakash said, “We have been seeing such queues, particularly in peak hours at major airports, where it is difficult to get into lounges sometimes. We have realised and are working towards a strategy of premiumisation as lounges have been commoditised quite a lot here.”
Prakash speaks with authority. Airport lounge giant Collinson operates 600 lounges at 350 airports. Members of its Priority Pass programme Members get access to over 1,300 premium airport experiences worldwide (hundreds exclusive to us) across 148 countries and 600 cities. In India, the company partners with more than 50 lounges.
As a result of such concerns, airport companies are contemplating different zones within the lounges for various passenger types; for example, those willing to pay for a quieter zone offering gourmet food. Conversely, those with complimentary access through their banks will get a more informal space.
Classifications within the cards, perhaps separately for debit and credit card holders, is also in the works, since credit card holders usually drive higher revenues to banks. Some airports are planning to create additional lounges to accommodate the burgeoning set of lounge users.
A traditional airport operator and commercial partner concern is that lounges reduce precious dwell time for shopping and dining, the mainstay of non-aeronautical revenues. In the past, lounges were often located far from retail zones, sometimes perhaps to deter passengers from leaving the commercial zones.
As Indian airports evolve and new ones are built, an approach involving multiple lounges across the terminals interspersed with shopping is becoming more common. Exciting things are happening across India’s top airports, both privately operated and those run by Airports Authority of India. Watch this (lounge) space. ✈
