Travelers have been embracing technology for years, relying on smartphones, tablets and other mobile devices to stay informed on the day-of-travel. Airports, for the most part, have bought in too, and have invested heavily in the past few years in self-service technology that keeps travelers informed and improves the airport experience.
NB: This is a viewpoint by Mike Benjamin, CEO of FlightView.
Recently, though, airports have uncovered an important secret about passenger-centric technology and information transparency: the more they provide, the more comfortable the traveler becomes – which has a direct impact on how much they spend at the airport.
Driving gate-side revenue through self-service technology and integrated data
Keeping travelers well-informed not only improves overall satisfaction and reduces the burden on airport and airline customer service teams, but it also leads to travelers spending more money at the airport. According to JD Power’s North American Airport Satisfaction Survey, passengers that report high levels of satisfaction at an airport tend to spend up to 45 percent more in retail shops, on average.
That’s a significant number for airports. Concession, restaurant and retail sales provide a meaningful stream of revenue for cash-strapped airports – which makes it crucial for airport directors to constantly explore and test new strategies to increase terminal and gate-side income.
But what’s the best way for airports to approach this opportunity? While airports have invested heavily in infrastructure and technology, generally speaking, the majority of travelers still view being at the airport as a stressful experience – which of course, is not very conducive to consumer spending.
To overcome this, airports need to up the ante on innovation and information transparency, and better integrate flight information into the restaurant and retail scene. Take JFK International Airport for example.
Grab a seat at select restaurant tables in JFK, and an iPad with your departure time and the status of your aircraft will be right in front of you. Diners no longer have to rush through a meal only to sit at their gate for 20 minutes because of a flight delay.
Or, outside of restaurants at Tampa Bay International Airport, gate displays go beyond just showing the status of your flight; they also show the progress of the inbound aircraft, giving travelers a much more realistic picture of how much time they have before their plane arrive.
The results are already significant: Following several investments in travel information transparency, Tampa International Airport has experienced a 10% increase in airside concession revenue and 6.8% increase in dollars spent per passenger.
The Future: Personalized technology engagement and mobile tracking
Investing in flight information is not the only way that airports are using technology to cater to customers. Many airports are also experimenting with mobile tracking technology to allow them to better understand passenger flow and, most importantly, provide personalized service and actionable, real-time information.
According to SITA, by measuring ‘live’ data on airport traffic and passenger flows, airports can react more quickly and strategically by deploying and re-deploying staff, resources and equipment in real-time. The end goal: cut down on lines and queues that stress travelers out.
Of course, it all ties back to revenue. From its mobile tracking initiatives at North American airports, SITA reported that an extra 10 minutes in a security line reduces an average customers’ retail spend by 30 percent. Multiply that by the millions of passengers that pass through an airport each year, and the impact in lost revenue is substantial.
Another area where many airports can gain more traction is by proactively pushing personalized information to travelers.
Travelers are not only expecting this – 84% of travelers want personalized mobile travel information from airlines according to FlightView research – but airports (and airlines) have a massive opportunity to capitalize from a revenue perspective.
Ancillary sales through mobile are expected to rise significantly, from 2.6% of ancillary sales currently to 11.6% by 2017, according to SITA’s 2014 Airline IT Trends Survey. That’s backed up by FlightView research, which found that travelers are more willing to spend on ancillary services when they are proactively pushed offers relevant to their preferences and itineraries on their mobile device. It’s easy to see just a few years down the road, where airport retailers and restaurants will be pushing relevant mobile offers to travelers with time to kill before their next flight.
The new wave of airport technology
Airports are embracing technology solutions with open arms to improve passenger experiences, reduce the burden on customer service, and most importantly, increase revenue.
Take, for example, the recent news of Dubai’s $32 billion airport expansion. As part of the construction of this next-generation airport, more than 100 smart gates will be installed. These gates are equipped with technology such as automatic identification system, facial imprint and automatic iris scan, and work to make the passport control process much faster.
In fact, the general directorate of residency and foreigners affairs in Dubai expects that these technologies will reduce travel time to the gate for departing flights by 50%. Needless to say, that will have a significant impact on operational costs and the revenue coming in from airlines.
As advances like these take place in airports across the world, it’s a win-win for travelers and airports. Travelers enjoy streamlined travel processes and personalized engagement, while airports can better cater to traveler needs, and drive revenue growth.
NB: This is a guest post by Mike Benjamin, CEO of FlightView, a day-of-travel information company serving the airport, airline and travel technology industries.
NB2: Airport kiosk check-in image courtesy Shutterstock.