Maximise your Avios, air miles and hotel points

How Plaza Premium has super-charged its growth plans: I interview Mr Song, Plaza Premium CEO

Links on Head for Points may pay us an affiliate commission. A list of partners is here.

I was at the official opening of the new Plaza Premium lounge at Edinburgh recently. In addition to reviewing the lounge (click here) I had the opportunity to sit down with the CEO of Plaza Premium Group, Mr Song (as he is universally known).

If you are an American Express Platinum cardholder you’re probably familiar with Plaza Premium, which operate 280+ airport lounges worldwide. Plaza Premium also runs lounges for airlines such as Virgin Atlantic, who handed over management of their non-UK Clubhouses to Plaza Premium during covid.

Rhys Mr Song

We covered a lot of ground, including:

  • Why Plaza Premium dropped Priority Pass
  • Plaza Premium’s recent growth
  • The rollout of Aerotel airport hotels
  • …. and Plaza Premium’s next big bet

Why did Plaza Premium drop Priority Pass?

Plaza Premium caused waves last year when it announced it was blocking Priority Pass cardholders from its lounges.

For almost three decades, the companies appeared to have a symbiotic relationship. Both companies were founded in the 1990s and worked hand-in-hand to develop the independent airport lounge market. Plaza Premium claims to have opened first independent airport lounges when it opened in Hong Kong and Kuala Lumpur in 1998.

“I groomed Priority Pass. They started in the same period of time as we did. They are in the consolidator business. So I groomed them; to me they were a marketing business because they brought us new customers. It was a very good match. But the trouble with Priority Pass is they deviate from what they want. They started a lounge management operation.”

In 2006, Collinson started a new subsidiary called Airport Dimensions, which owned and operated lounges such as Club Aspire, competing directly with Plaza Premium.

Obviously, Collinson have their own right to do business.

…. but that doesn’t mean he was happy about it. Mr Song compared it to patricide: “Like a father, I feed you. I can make you grow bigger. When you grow bigger, you turn on me.”

“Another reason I dropped Priority Pass is that they always squeezed the lounge provider. If you are a single operator, you are price taker. $10, take it or leave it. You have no choice – you do not have the marketing side of the business. For us, we are different, because we have a large network and our own brand. So we ended the agreement. I think the industry was shocked when we dropped Priority Pass. I think they were shocked too!”

Fundamentally, Priority Pass is a high-volume, low-margin marketing scheme, and one that Plaza Premium felt it could ditch thanks to its growing network of lounges.

With 280 lounges worldwide, Plaza Premium still falls far short of Priority Pass’s 1,300+ network. The company now has the critical mass to go its own way, and I get the sense that Mr Song is developing Plaza Premium into a true competitor, albeit in reverse. The company is building lounges from the ground up rather than acting as a consolidator, connecting lounge operators with customers.

Plaza Premium CEO Mr Song

Plaza Premium’s big growth plans

You don’t have to search far to see how Plaza Premium is working its way up. Unlike most travel companies during covid, Plaza Premium has been expanding more rapidly than at any time in its history.

“We were expanding before covid but at a very slow place. Getting into airports is not very easy. During the good times, everyone rushes for the lounge space. During the bad times, like during covid, a lot of restaurants and retailers close down, and suddenly there’s a lot of space available.”

The biggest challenge in growing an airport lounge business is available space. Whilst other companies have effectively been frozen for the past few years, Plaza Premium has taken every opportunity to expand.

A lot of companies have restructured or closed down locations, leaving airports with plenty of empty spaces. That’s led to the opening of the new Plaza Premium at Gatwick North, formerly a Virgin Atlantic Clubhouse that was empty when Virgin consolidated at Heathrow. In Edinburgh Plaza Premium picked up the No1 Lounge space.

In addition to launching its own lounge brands, Plaza Premium has been deepening its relationships with other lounge brands, including Virgin Atlantic’s global network of Clubhouses.

“We’ve been repurposing airline lounges too, because they only operate for 2-3 hours around their flights and then they close down for 20. So now we say, let us run your lounge for you, let us repurpose your lounges so that when you’re not using them we can bring additional customers in for you. The airlines are happy because they get additional revenue.

Then we put money to renovate because some of the lounges are tired. We’re happy because it costs us less money than if we started an airport lounge from scratch. It’s a win win win situation where we are operating with the airline.”

But Mr Song still has a long way to go to reach his target of opening in the top 100 busiest airports.

“Altogether right now we are at 70-odd airports right now. But our 70 airports are not necessarily in the 100 busiest. Right now I think we take care of around 60% of our target, so roughly another 40 airports to go. That’s our target because the network is very important. You need to develop a strong network.

Customers know we provide consistent quality of service. Especially for the airlines, they know us already, they don’t have to do due diligence with us again to send us their passengers to us. We can provide global locations too – that is very important too. That’s the reason Visa, Mastercard, American Express, and Capital One sign with us. They know we provide consistent quality of service and we have the network.”

Just this year, Plaza Premium has opened five new lounges in Europe, including at Edinburgh, Gatwick North, Helsinki, Budapest and Frankfurt.

Rhys interviews Mr Song

Rolling out Aerotel

Aerotel, Plaza Premium’s in-terminal hotel business, has also been expanding, albeit at a slightly steadier pace.

“Aerotel is a totally new concept. Remember we are not a conventional hotel – our hotel is designed for travellers.

At Heathrow for example, right now there’s plenty of hotels on Bath Road. But that’s not convenient enough. You have to pay £5, take a bus with all your bags, then do it all again in the morning before your flight.

We charge by the hour, rather than a full day, that’s the attraction. If your flight is at 5, 6am, think about what time you have to wake up – probabyl 2 or 3am. That’s the whole day gone.

So we say, hey look, we’re not charging you for 24 hours – just for the time you need a room. You can check in at 11pm or midnight, sleep for four or five hours, wake up, have a shower and check in straight for your flight. You save paying for a hotel for a whole day.

The first Aerotel in the UK opened at Heathrow Terminal 3 (we reviewed it here), where Plaza Premium was lucky that a former office block connected to the terminal became available.

“If T5 have space for me I would immediately build an Aerotel.”  

Plaza Premium’s next big thing – services

Fundamentally, however, Plaza Premium’s growth remains restricted by airport availability. Most airports are limited by how much space they can offer to lounge or hotel operators. You can’t just build an extra wing at Heathrow T5, for example, to open an airport hotel.

In many ways Plaza Premium was lucky at Terminal 3 that they could repurpose a former office building that was integrated into the terminal. This is not true at most other airports.

But Mr Song is already looking for the next big thing, and privately admits it could become a unicorn.

Over the pandemic, Plaza Premium has spent over $10 million creating a new platform that integrates airport services such as meet and greet, fast track, porter, buggy transfers and baggage wrapping. Right now, these functions are operated by a variety of different third party companies, none of which really communicate with each other. Mr Song wants to connect them all under one roof.

In some ways it’s the opposite of how he developed the core part of the business. With the new travel services platform, Plaza Premium becomes a consolidator itself, working with third parties to deliver joined-up services.

“It creates inconvenience to passengers, so we created a platform where we can consolidate them all.

You can book your services anytime, whenever you want on the app. Everything will be done by the time you reach the airport. Everything will be ready for you, rather than you having to call every company to arrange their service.”

The platform is also meant to make life easier for the service providers themselves, with dispatch and resource management, which should lead to greater efficiency.

Like almost all developments, it comes down to data.

“Right now, the airport doesn’t really know about what their customers are doing. Who are they? What do they do? They know they have a 5,10, 20 million people going through their airport, but that’s it. With the platform we have developed, I know that Mr Song loves whisky – he bought whisky before. So if I have a whisky distiller who wants to promote a new product – I say fine, I have members here that like whisky and I can reach them.”

In other words, it’s a marketing solution.

It’s also vastly more scalable than a lounge or hotel operation, where you’re dependent on space being available. Plaza Premium’s new technology platform can be white-labelled to countless airports worldwide, for whom developing something like this would be far too expensive by themselves. Instead of a lounge company, Plaza Premium is looking to become a tech company.

Thank you to Mr Song and the Plaza Premium for their time – and for taking the photographs! – and for the invitation to Edinburgh.

Comments (146)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Leo says:

    I would have asked him why I was turned away from the Plaza Premium lounge at Gatwick with my platinum Amex 3 weeks ago…..”we’re only taking bookings”…. Is this a general thing?

    • Peter says:

      Considering the fluff article, I doubt anything like that would ever be asked 😉

      • Mr(s) Entitled says:

        This won’t be winning the 6th journalism award.

      • Novelty-Socks says:

        Haha yep interesting as this piece is, it was never going to be an interview where the “hard” questions got asked!

        • Ian says:

          Why do you so frequently find it necessary to respond to comments in such an aggressive way?

          • Rob says:

            Because some people have no idea about the commercial realities of running a business, which is a rather sad reflection on education in this country.

            These are generally the same people who complain about us running ads or sponsored content and magically expect £150,000+ to appear from the fairies each year to pay from the team and our office!

        • John T says:

          I am actually laughing out loud at this comment Mr(s) Entitled

        • lumma says:

          That Hyatt arguement makes no sense as the hotel doesn’t know you’re getting the discount in that example so can’t prioritise the full price paying customer

        • Mr(s) Entitled says:

          Is the lounge always at capacity in these instances? The article seems to make clear the Mr Song is not a price taker. Can you be sure that customers are not turned away in favour of leaving capacity for others at a more advantageous price? Or because it is hoped that for every X turned away Y returns next time as a paying guest? It’s not beyond the realms of reason, and given that so much discourse on HfP is devoted to lounge access, not beyond the possiblity of questions surrounding access being asked to the person that should have the answer.

          • Rhys says:

            Pretty sure it’s at capacity. Staffing issues are the problem right now, not lounge space. So for similar reasons, The Grain Store at Gatwick is only filling about half the restaurant.

          • Rob says:

            If you have a business with huge fixed and tiny marginal costs (ie a lounge) you would logically take what you can get whilst still maximising capacity.

            No1, before it went bust, had a similar plan hence their split with PrPass – sell access via airlines, tour operators, newspapers, literally anywhere you can find, because it pays better then Priority Pass.

        • Chrisasaurus says:

          Ref Rob’s later comment at 9.49 – suggest you don’t try to run and airline with that approach!

        • Dave Lawrence says:

          Interestingly though, I’ve been turned away at Heathrow where you can see into the lounge, and can see that it isn’t full. It was a still “no booking, no entry”.

          • Rhys says:

            ….Yes, because it’s not space that’s an issue but staffing.

            The Grain Store at Gatwick is only using half the seating because it cannot keep up otherwise.

          • Rob says:

            Yes, because the slots have been pre-sold to airlines who take 50/75/100 seats per day on a guaranteed basis, just in case all of their premium and status passengers turn up – which they never do.

            I’d be doing the same deal – it’s easy money.

            As Mr Song says in the interview, he also wants to respect the rights of those people who have paid £40+ to get in to have a quiet space to relax, which means that you don’t fill every seat. It may sound illogical but just because you have a certain number of chairs doesn’t mean you are willing to accept that number of guests. It’s not a theatre or a restaurant.

            What’s the biggest complaint about BA lounges at the moment? Too full. Not possible for groups to sit together, long waits to get refreshments, too much noise from so many people moving around. Plaza would prefer to avoid this.

        • Numpty says:

          If the readership of a website has a recurring issue in getting access then surely its justified to raise the issue – I am sure he knows and already has a pre prepared response ready.

          ‘Hey, lots of our readers can never get access to your lounges using their Amex Plat cards, they have to go elsewhere or to Weatherspoons…So what gives?’ Words to that affect.

          • Rhys says:

            Don’t need to ask to know what the issue is:
            – reduced lounge capacity (lots of lounges still closed)
            – staffing issues limiting capacity

            By the way, good luck if you want to get into Wetherspoons. It was just as busy in Gatwick South as any of the lounges!

        • Ryan says:

          +1 it can be very annoying when you plan to have a lounge and a load of cash paying or OnThBeach customers have filled it up but that’s capitalism…

          If anyone REALLY values a lounge then value it with cash and not a lounge pass from
          A virtually free credit card

          The market talks; supply and demand

        • Novelty-Socks says:

          I’d rather you didn’t start fights with anyone TBH Rob!

        • Leo says:

          I am quite surprised by your tone in this response to be honest. Never had this from you before in years of following HfP. You know Rob, you do rather push Amex, and if their arrangement with Plaza Premium is actually not very good I think it’s a valid point to be raised with both parties. While I’m at it, the staff member at the lounge was just appalling but whatever.

          • Rob says:

            I still don’t get your point though.

            What, exactly, are we meant to challenge Mr Song on? ‘People go to your lounges but they are full so they can’t get in’?

            If you want to visit a restaurant and it is full you don’t ring up the owner and complain. I assume you also don’t demand to see the CEO of Cineworld if you turn up and they are full.

            These are Amex issues, not Plaza issues. The most likely thing to happen with feedback like yours is that Plaza decides it can’t be bothered and pulls the plug on the Amex deal. Amex isn’t reducing your card fee if that happens.

            When Plaza left Priority Pass, this arguably ‘improved’ Priority Pass because it made it more likely you would get into a lounge (as Plaza was disproportionately likely to be full). Oddly no-one saw it like that.

            The key cause of full lounges, by the way, is dwell time. People are arriving 3-4 hours early rather than 90 minutes pre covid due to worries about airport delays. Whilst lounges are full this does not translate into more money for operators – they get less as they can’t resell your space as quickly.

        • Russell G says:

          I think Rob has every right to use the tone he is using (and whatever tone he chooses). This is his site and he and his team put a lot of hard work in to providing value for the armchair commenters that pay zilch for his services to just quip snide criticisms. I applaud his honesty and curiosity rather than hiding behind some corporate PC meaningless responses designed to keep commenters content and sedated.

          I personally garnered a lot from the article about the interview and now understand the business model a bit better.

          Rob, Rhys and team – you’re doing a fantastic job, keep it up, know that there are so many of us out here that read your site daily and have been hugely positively affected by your work!

    • John says:

      Rationing of space, I presume. Is there a pre-booking link for Amex/complimentary users?

      • Jon says:

        A pre-booking link is what AMEX card holders want. I think most would pay £5 to guarantee a place even though it is a free perk. The business case for AMEX is that the amount spent is recorded then trickled back to the client in membership points upon renewal.

    • 1ATL says:

      I can give you dates and times for T5 where Amex Platinum/Centurion have been denied access citing capacity issues as the reason but the lounge remains available on the Plaza Premium website for paid access. This would suggests capacity isn’t the issue at all surely? £15 from Amex is surely better than nothing?

      Now I’m back to BA Gold it’s now of little consequence, however if it happened in another lounge when not flying Oneworld, I’ll just pay and ask Amex to sort it out. They can take it up with the songman if they feel so inclined

      • Rob says:

        It’s interesting how lounge complaints vary between

        * they didn’t let us into the lounge even though I could clearly see an empty seat
        and
        * I got in but every seat in the lounge was full and it was very unpleasant

        • AJA says:

          But Rob each of those complaints are valid. And not mutually exclusive.

          If you have a credit card that has a published benefit that supposedly gets you access to a lounge and you find out that it doesn’t work wouldn’t you feel aggrieved? Especially if you can see seats available. It’s no different to hotel status which is supposed to give you breakfast and then you find that the hotel denies it.

          On the second complaint the advertising blurb suggests that lounges are supposed to be an oasis of calm where you can relax or work in peace. If as often happens with BA’s T5A club lounge it is a bunfight just to find two seats next to each other I think it’s a valid criticism. Which is why the CX lounges in T3 are more highly rated than the BA lounges.

  • OCN says:

    If you could enter any Plaza Premium in UK airports by only showing the Platinum Card. Comoketely useless. Was even turned away by Centurion Lounge staff at T3 saying that my Austrian Platinum Card was not active. Had to call AMEX Austria to resolve.
    Completely useless in the UK and I have serious doubts that this situation will ever reverse like pre pandemic. Nice extra revenue.

  • r* says:

    When are they gonna reopen the lhr arrival lounge? Considering its still closed, Id guess things arent looking great for it.

    • Rob says:

      None are reopening.

      • brian says:

        There are no plans to reopen at the moment or the plan is to not reopen them at all?

        That’s a bit of a letdown if it’s the latter. I got good use out of some of those lounges in the recent past.

        • Rob says:

          Permanently shut. You will note we removed the reviews from our lounge reviews page.

      • jjoohhnn says:

        Potential space for an Aerotel?

  • Pete M says:

    The next big thing sounds a bit like when Adam Neumann decided WeWork would become a “tech company” to get SoftBank investment 🤣

    • Rhys says:

      Except I think Mr Song has his head screwed on slightly more tightly than Adam Neumann 😉

  • AL says:

    The non-UK VS Clubhouses have gone downhill since Plaza Premium took over. I’ve been to both SFO and JFK multiple times this year and they pale in comparison to their former selves.

    • Rhys says:

      Virgin wouldn’t have given away the management of the Clubhouses unless they were looking to save money. I doubt the cost/per person has stayed the same – more likely than not Virgin are paying less per passenger.

      • Mark says:

        And they’re driving additional revenue from paying guests even at peak times for VS UC/status passenger usage. The SFO lounge got very busy when we were there ahead of the late evening VS42 departure, to the point that we were unable to get more comfortable chairs when we wanted to move from the tables. I’ve seen reports that non-VS customers were being denied al la carte meal orders in some lounges but that wasn’t evident at SFO when we were there.

      • Mark says:

        Also noted that they weren’t cleaning the showers between each use – the system seemed to be a free-for-all until the pile of towels run out, after which they presumably do clean them and replenish the towels. Bizarre that all the toilets within the lounges only seem to be within the shower units, meaning that you have to go out to the public toilets when all the showers are in use, though that presumably hasn’t changed since the Plaza Premium take-over.

  • Dubious says:

    “Right now, the airport doesn’t really know about what their customers are doing.”
    Sounds like everyones trying to eat about of each other’s lunch.

    The key value of airport loyalty schemes, like Heathrow Rewards and Changi Rewards is precisely these insights. I also see other digital providers, like Grab (the Asian equivalent of Uber) and AirAsia (which has diversified from flying) trying to get into this same space.

    • Dubious says:

      Aerotel could be a nice service/product – if the price is right. I think it would help if someone also provided some form of left-luggage too.

      Then you can sleep during your transit and/or head into town if you have a long-transit.

      • John says:

        How come every medium or bigger train station in the German speaking countries manages to provide lockers which are simple to use?

        • lumma says:

          I think the IRA put a stop to lockers in UK train stations

          • KevinS says:

            When was the last IRA attack?

            In general, there’s no terrorist threat really.

            You’re significantly more likely to die in a car crash, despite what hysterical types might think.

          • BlueThroughCrimp says:

            They did.
            Just because it’s not that particular group that’s the risk now, the railway here decided to either offload it to a third party at NR managed stations, or just not bother providing them. Privitisation didn’t help either.
            It’s a right PitA not having them or vastly over-priced at the Excess Baggage Company.
            But. Britain.

    • Save East Coast Rewards says:

      Does Heathrow Rewards actually collect any data about what is purchased? Although some retailers have integrated it into their tills and therefore in theory could share purchase data many retailers just have a tablet where they scan the barcode and enter the amount, no other data is shared. None of the marketing I’ve received from LHR seems customised

      • Dubious says:

        Ah, you are probably right…a missed opportunity (spanning many years)…

        • Mike Hunt says:

          Kevin S your statement “In general, there’s no terrorist threat really” is unfortunately very very untrue. The current UK terrorise threat level is SUBSTANTIAL – an attack is likely

          • Save East Coast Rewards says:

            Leaving threat levels that high just make people not care about it. Let’s be honest it’s medium at the worst, possibly low

          • Dayle says:

            Just because the gov have put the level to SUBSTANTIAL (oooh scary) doesn’t mean there is a substantial threat

            There’s a threat everywhere in the world, we can live our lives in fear (just love the plandemic)

          • KevinS says:

            It’s nonsense. When was the last major terrorist attack in the uk?

            Since then thousands have died in car accidents.

            Don’t believe the hysteria. It’s just a way of justifying jobs etc

  • Roberto says:

    The problem with airport lounges is they used to be an exclusive calm place for business people and now these 3rd party spaces are rammed with every Tom,Dick and Harry , with screaming kids and noisy idiots facetiming thier mates about their free booze and cardboard sarnies.

    Passes are given out like sweeties by a myriad of competing companies and “exclusiveness” is a thing of the past. In fact they are now a victim of their own success and are cherry picking the low hanging fruit & turning people away as their popularity outstrips demand.

    Its now the Woolworths business plan pilling it high and selling it cheap – and look what happened to woolies…

    /rant over

    • Roger* says:

      Woolworths? Tesco!

    • Nick says:

      Yup, sadly, that pretty much sums the current (and sadly future too!) airport lounge situation up Roberto! Well said, and for having the insight to say so!

      Gets ready for the current society woke replies…!

    • Lady London says:

      +1.

    • JDB says:

      @Roberto spot on; not a rant, but an accurate observation. The new T, D & Hs also have no idea how to behave in multiple regards and leave debris everywhere – floor, table, seats (to which they also add dirty napkins, grease stains etc) – would they do that at home?

      • Ryan says:

        +1 – There has (since covid) been a stark decline in lounges (especially in the UK) with people going to Costa Brava booking “4 or 5 star” holidays and thinking they’ve won at life

        When all they’re doing is making everything worse.

        There’s a massive difference between say Bristol lounge and the Barcelona lounge I went to recently where there were all biz travellers with respect

    • Novice says:

      Totally agree.

  • John says:

    Do look at Dublin, Mr Song. DAA needs to be deprived of its monopoly in non-airline lounges.

    • polly says:

      Very true, food offerings dismal

    • Save East Coast Rewards says:

      If the airport operator (DAA) is making good profits why would they give up their monopoly? Perhaps Plaza Premium could look at the space NCL were using to build a new more premium lounge but the project seems to have stalled during covid. The Aspire lounge is always busy so having a better lounge would be a good option. Even LBA has better lounges than NCL at the moment, shame BA ditched that route!

    • AL says:

      +1. I was there this week. Dublin T2 is a poor place to spend a layover.

      • John says:

        I believe that you can cross between terminals while airside (keep walking along T2 lounge corridor). Given that T2 is their newest terminal, serving flag carriers and long haul, it’s incomprehensible why their F&B offer is non existent. Better to cross to T1, find something nice, and lug it back.

    • Rhys says:

      Dublin may not want to give Plaza a space!

    • mnlbay says:

      TBF, The East Lounge at Dublin is one of the better third-party lounges I’ve visited.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

The UK's biggest frequent flyer website uses cookies, which you can block via your browser settings. Continuing implies your consent to this policy. Our privacy policy is here.