Start Up Blog

Dubai Series: You snooze, you ‘win’

Posted in entrepreneurship by Steve Sammartino on February 3, 2009

These are starting to pop up in the better airports around the world. But every airport has the space for them in the international departure lounges. I’ve seen them in Singapore and now in Dubai International Airport as seen below:

airport-sleepers

They are just a cool idea which makes sense for ‘the people’. A classic ‘1 percenter’. When we are traveling for days at a time a little welcome relief on the ground or a stopover might just make us go through that airport on our next global trip, instead of that other one.

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Dubai Series: Hotel Sampling

Posted in entrepreneurship by Steve Sammartino on January 29, 2009

Once you pass through the customs area in the Dubai International Airport they have a very interesting area reserved for Hotels as can be seen below.

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hotels2

hotels3

The area has all of the 5 star hotels from the city represented. The general idea is that each hotel has a mini foyer with the exact styling and ambiance of the actual hotel. The mini foyer has Video footage of the hotel, details on menus and hotel services, samples of the haute couture fragrances in room and some even have masseurs for weary travelers to encourage / reward bookings. Concierge salespeople are there to explain the benefits and convert the sale. For those already booked they have a comfortable waiting location where they serve refreshments until the hotel driver arrives.

A simple idea, but one which makes sense for such a burgeoning metropolis and shows that even the oldest industries can innovate too.

Qantas gets it wrong with Effiency

These 3 photos where taken at Melbourne airport on a Friday night.

This is of a quick check (self check in terminal)of which there are 22.

This is of the the bag check in staff of which there were 3 working. (They have spaces for 22 employees)

And the this photo is of the ensuing crowd and chaos.

(the crowd goes around the corner it’s at least 100 deep)

I asked the staff member if she’d like some help tonight – she seemed flustered with how busy she was. She said “of course, but it’s ‘cheaper’ this way”. Then I asked if she thought “quick check” was quicker. She said “definitely not”.

So here’s the thing – Qantas make money out of the quick check. The save on overheads. On the balance sheet it makes sense. But what is the ‘real cost’ of doing it?

What it does is, is actually diminish what they actually provide at a differentiated level. It reduces their product from “service” to “travel”. They further commodify themselves against their low cost airline competitors. They make us ask why we are actually flying qantas and paying a premium…

- Is it the food service? – Not likely, given the food is most often a gourmet cookie & juice.

- Is it the service in the air? – Not likely, given their staff are less polite than budget airlines.

- Is it the airplanes? – Not likely, given all domestic players use the exact same aircraft.

- Is the the baggage allowance? – Not likely, given the allownaces are the same 20kg’s to tohers.

- Is it the terminal ambience? – Not likey, given it’s shared with jetstar.

- Is it their safety record? – Not likey given recent scares & that no major aircraft has ever crashed in Australia.

- Is it the inflight entertainment? – Maybe, but it’s a stetch these days given we all have mobile entertainment devices in our pocket.

- Is it the Frequent Flyer points?  Maybe, but it’s marginal at best.

- Is it the Qantas Club? yes – if you are preapred to pay the $775 per annum.

And it can’t be their ground service, given the example above on a Friday night.

Qantas need to ask themselves some hard questions about what they actually offer – as a long time loyal customer, it’s waining quickly. Their point of difference is in a massive state of decline.

Here’s what Qantas ought do if they want to avoid further decline:

  1. Offer Hot meals & drinks every flight. Not just at dinner time. If we are travelling we didn’t have time for dinner or lunch, regardless of when our flight was. We are just as hungry on 7pm flights as we are on 6pm flights. It’s not the food which costs the airline, it’s serving it up. So, if you are going to serve it. Make it worth the effort.
  2. Make the ground experience comfortable and convenient. A few more staff members on the cehckout is a nice start.
  3. Provide free wifi to anyone with a boarding pass.
  4. Have a ‘no tricks’ Frequent Flyer program where any seat on any flight is available, and not for ‘extra points’ – we’ve already paid a premium for our tickets – remember Mr Qantas?
  5. Have separate terminals for your Budget Airline (Jetstar) and your Premium Airline (Qantas).
  6. Sing out loud in your advertising about how different the Qantas experience is. Make us feel special.
  7. Charge the price needed to make it profitable. You’ll be surpirsed how many of us will be preapred to pay for it.

It’s about time Qantas started to focus on it’s customers and forgot about it’s competitors. Eventually we all morph into what we focus.

I’m sure Qantas will tell us this isn’t possible – but tell that to the person who pays twice the price for a Mac book pro versus a Toshiba with the same configurations.

Startups out there: “Beat your competitors – don’t be them!”

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Quirky Fact

The revenue from car parking & retail at Melbourne Airport – exceeds the revenue generated from Airplane operations…

Airplane operations = $171 million

Car Parking & retail = $183 million

The car parking componant was $70 million two years ago, though the Australian Pacific Airports Corporation has chosen not reveal the revenue split recently. Seems Jerry Seinfeld was right when he said the whole travel saga was a trick to sell the $7 tuna sandwiches!

The question for startups is this: Where is your extraneous revenue hidden in your captive audience?

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