As corporate belt-tightening bites into all-inclusive luxury travel, there is a growing demand from business travellers for airport ancillaries. Gary Noakes reports
IT’S NOW SIX YEARS since the start of the recession, a period long enough for business travellers to adjust to a more puritanical regime.
The green shoots of economic recovery have been slow to sprout, but meanwhile a range of products to help cushion the ban on business class travel has emerged. Buyers who enforce a ‘no premium flight’ policy now have the discretion to purchase the components of premium travel, whether it be valet parking, lounges or fast-tracking through airports. Despite an urge to make savings, cost is not always the overriding factor, with buyers citing the overall value in terms of time-saving, duty of care considerations and any increase in productivity being just as important.
Mike Butcher, travel buyer at telecoms giant Alcatel-Lucent, believes there are savings to be made, but warns: “There is a limit to what you can do; most of the elements of the cost savings will be around short-haul travel.”
Alcatel has a ‘no business class’ policy below six hours, except for exceptional circumstances. “We took a view with things like lounges that, if staff have frequent flyer points that get them in, all well and good, but we are not going to pay for them. There are offerings through the TMC if we want to use them, but, frankly, we don’t want to offer most of the add-ons because they add value to the traveller but not to the business.”
Some add-ons are of benefit – parking, for example, because it means employees do not need taxis. However, duty of care must always be taken into consideration.
“It has to be tempered where long-haul travel is concerned,” says Butcher. “We don’t want them getting off a flight at 5am and driving into someone.”
DUTY OF CARE
Jef Robinson, global category manager for software company Citrix, adds that duty of care must be taken seriously, even though purse strings are tight. “This is something that needs to be stressed to travellers – a travel programme isn’t just about costs, it’s about traveller safety as well,” he says. Robinson looks at the ‘value’ of the travel cost, rather than just the price – for example, determining whether something like lounge access will result in greater productivity.
“Reimbursing the cost of access would very much depend upon the circumstances. For example, 30 minutes’ access prior to a 90-minute flight would not necessarily be justified, whereas four hours in-between legs of a long-haul flight may well be. There can be hard and fast rules within policies, but equally, there must be increasing flexibility to take into account the rapidly changing ways that we all work.”
Reporting all these disparate elements and determining their value is a headache for any buyer. Robinson believes there is a need for increased visibility of each element, as currently return on investment is judged only on the complete package. “Cost-effective tools to help tackle this area are slowly becoming available, but currently it is still not necessarily possible to benchmark all travel costs using a single source without incurring significant additional costs,” he says.
Alcatel’s Butcher notes one real success in breaking down travel into component parts. “In regard to airport parking, not many of our staff were doing advance booking – they were paying the public rate. We did a proposal with Meteor Parking for meet-and-greet and that has worked quite well. It’s more economical than paying the full public rate in business parking.”
KEEPING IN CONTROL
Other companies are more lenient when it comes to travelling in business class, but still want to keep ancillary buying in-house when staff travel in economy. Aberdeen-based Stork Technical Services, which specialises in oil and gas, bases policy on the budget for each project, but has a tighter remit for the 30 per cent of its staff who travel conventionally, rather than offshore. Once again, safety is not sacrificed. Stork works in some risky locations and it is policy to have drivers meet staff at airports, rather than use hire cars.
On a more day-to-day basis, there are still savings to be made. Ryan Taylor, Stork’s global travel manager,
says he is in talks with independent airport lounge access provider Priority Pass to give staff lounge access rather than paying the full premium fare. “It’s a hell of a lot cheaper than buying business class or premium economy,” he says. Taylor says these contracts are always negotiated direct, rather than bought using a TMC’s package.
Lounge access is a bone of contention, with some believing staff will just use it to relax, while others believe there is a genuine duty of care and cost consideration. If, for example, a company has a policy not to fund food, drink or even wifi costs, then lounges, with a single upfront payment, may be the answer, as generally, these things are free once through the door. Many are now mini business travel service centres, with desktop computers, numerous plugs and mobile chargers – enough, in fact, for a canny corporate traveller to argue they are a necessity.
This is particularly so as more time is spent in airports now that security procedures are so much tighter – gone are the days at most airports when a 30-minute dash from entrance-to-aircraft did the job.
The number of generic lounges is growing fast as the door to airlines’ own facilities slams shut, provided by companies such as Servisair, as well as the airport operators themselves. “It’s the airports stepping into the premium market rather than the airlines,” says John McConnell, Glasgow airport’s head of commercial. “We have our own premium parking, fast track and a premium lounge because there’s a market for it. Traditional airlines have to compete against low-cost, and they’re dropping the frills. It’s the airports that are picking it up.”
BATTLE OF THE BRANDS
Generic provider Servisair, which now operates lounges under the Aspire brand, has thought laterally about its competitors. “I would class Costa Coffee and Frankie and Benny’s as competitors – all those high street brands are now airside,” says Servisair director Shaun Weston, who adds that only up to 2 per cent of all passengers are lounge users.
Aspire lounge prices begin at £17.49 (booking online), but Weston says it has around 170 contracts with TMCs, corporates and travel agencies at varying rates.
The withdrawal of one airline’s use of its lounges to silver card holders resulted in a 15 per cent fall in passengers recently, but Weston says this was quickly replaced as travellers using bank account, credit card or other privileges fought their way back.
Servisair plans to extend the Aspire brand and already has a concierge product. It is considering parking and, more immediately, is looking at fast track, but companies are hampered with this at regulated airports like Heathrow, where there is a stipulation that this cannot be profit making.
Priority Pass is also examining brand extension. “Our customers are asking for us to look at what else we can do,” says Errol McGlothan, the company’s general manager for the EMEA region. “We’re looking at fast track and meet-and-greet services, which we are testing now. We expect to grow that in the coming months.”
He says demand for the group’s services is growing at double-digit rates globally and that some companies are using ancillary packages to retain and even attract staff who baulk at having to fly economy. “People come to us for a variety of reasons,” McGlothan says. “Recently we had a pharmaceutical company sign with us, coming very much from a duty of care perspective. Equally, we have others that use it as a retention tool because they feel it differentiates them from competitors, such as one from the shipping industry that we deal with.”
The latter comment is proof – perhaps - that when business class is taken away, some still want to travel in the style they have become accustomed to. Old habits die hard.
REGIONAL ROUND-UP
BIRMINGHAM
No.1 Traveller’s first lounge outside London opened in October. Seating 100, the cost is £22.50 for three hours’ usage, including unlimited wifi. Use of the new Express Lane security channel can be bought at the airport for £3.
HEATHROW
Heathrow’s main focus last year was the Olympics, and all investment was channelled this way. However, one recent innovation for VIP executives is Heathrow by Invitation, which includes chauffeur transfers and kerbside drop-off at a private suite, where immigration and security procedures are carried out, before a limo service to the aircraft. Meet-and-greet parking provider Stressfreeairportparking.com recently doubled its capacity at Heathrow.
BRISTOL
Servisair is building a £600,000 lounge at the airport, part of its Aspire portfolio. Opening in April, it will be twice as big as the current executive lounge and will offer hot food. The airport has also extended its Premier business car park and enhanced fast track security, which costs £3.95 when booked online.
GATWICK
Servisair launched its Aspire brand at the North Terminal in 2012, aiming at corporate travellers. Gatwick South’s Servisair lounge will be refurbished by summer. Chargebox mobile phone chargers are now offered in both terminals.
MANCHESTER
Manchester opened its generic Escape lounge in Terminal 3 shortly before Christmas. An Aspire lounge opens at the end of March, which will include three ‘quiet booths’.
GLASGOW
Glasgow offers a premium car parking minutes from the terminal. It is not open to the general public but is available via airlines, including British Airways and Easyjet. The airport also runs Skylounge, which is open to any traveller for an £18 fee.