Page 16 - Forbes - Asia (March 2020)

London’s Heathrow airport asked Song to open a
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ENTREPRENEURS
viced office business for an undisclosed amount in
2005 to U.K.-listed Regus, now known as IWG,
earning what he says was a tidy profit.
The Citi deal established what remains Pla-
za Premium’s business model: while passengers
can dole out between $45 and $50 for two hours
of access to the lounge, most use loyalty points
earned from reward programs with other mer-
chants. Plaza Premium rents space from the air-
port and then collects a fee from merchants for
each loyalty customer it serves.
Eventually, Plaza Premium was able to sign up
other big clients, including American Express and
HSBC, that together contribute 8.8 million visitors
a year to his lounges. “All these privileges are very
well-received by our customers,” says Lawrence Li,
head of credit cards and unsecured lending busi-
ness in Hong Kong at Citi—also still a client.
As first mover, Song claims a huge lead over ri-
vals. While industry data is scant, Plaza Premium
says it has 70% market share of global independent
lounge traffic (excluding lounges operated direct-
ly by the airlines themselves). Song won’t divulge
specifics, but says sales over the past five years have
grown 20% a year on average, with lounges in Asia
contributing 70% of total sales, and that the com-
pany has been profitable for most of its 21 years. He
has been quoted saying that he has been offered as
much as $1 billion to sell the business.
Song’s company also manages at least 45 loung-
es for airlines, including Cathay Pacific Airways,
Singapore Airlines and Thai Airways. In 2014,
F ORBES A SIA
lounge as an alternative to its own long-time local
lounge operator. Since opening one lounge there,
Song has opened five more at Heathrow and an
airport hotel, and he runs three lounges in the
Hong Kong airport.
Plaza Premium has a bright future. Notwith-
standing the recent skid in air travel due to the
ing skyward. The number of people traveling by
coronavirus outbreak, industry growth is point-
air has been growing at roughly 7% a year for five
years, with airports worldwide handling 1.8 bil-
lion international passengers in 2018, according
to the International Civil Aviation Organization.
Traffic in Asia is likely to bounce back strong-
ly once the virus threat fades away, says Vinoop
Goel, regional director for airports and external
relations for Asia-Pacific at the International Air
Transport Association. “If we look at the SARS
outbreak in 2003, monthly international passen-
ger traffic returned to precrisis levels within nine
months,” Goel says.
Song sees the best opportunities in China, In-
From top: reception dia and Indonesia, rather than the mature U.S.
at Aerotel Beijing
and seating area market. “Most airports in America are very old.
at Plaza Premium It’s very challenging for them to find space,” he
Lounge Dubai.
says. “It takes time. That’s why we are expanding
faster in the Asia Pacific.”
As China opens airport services to foreign in-
vestment, Song already has a foot in the door. For
the past several years, Plaza Premium has man-
aged lounges at airports in Beijing and Guang-
zhou. More recently it began operating a lounge
in Shanghai with China Eastern Airlines.
Inspired by passengers sleeping on airport
floors, Song has also diversified Plaza Premium
into airport hotels, opening 12 Aerotels in just
four years, including one in September at Bei-
jing’s new Daxing International Airport and an-
other in October at Heathrow. Aerotels are set
up for traveler needs, offering hourly rates and
round-the-clock check-in. He’s also upgrading
his lounges with a la carte dining, whisky bars
and other amenities and services.
Song, who estimates he spends half his time
shuttling between airports to visit his lounges,
nowadays gets help from his two children: daugh-
ter Mei Mei works in Plaza Premium’s marketing
and branding department and her younger broth-
er Jonathan in global strategic development.
Song says there’s no pressure on them to take COURTESY OF PLAZA PREMIUM GROUP
over. “My children were not allowed to come to
work for me before working outside. They can leave
the company anytime,” he says. As for him, “I enjoy
every minute. I will quit if I don’t enjoy it.”
MAR CH 2020