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Introduction
Transcript
Welcome to Travel Buddy, presented by Switchfly. In this podcast, we talk about all things travel, rewards, and loyalty. Let's get to it.
Brandon Giella: Hello, and welcome back to another episode of Travel Buddy, where today we have special guest Jessica Steinberg. Once again, thanks for joining. W- and we are going to discuss the question of what happens when premium stops being the differentiation? What happens when everything is premium? And where do you go from here on the customer experience for travel? So I think, this is, any economist that's listening would think, you know, looking through e-economic history, every industry, what becomes a luxury or a premium experience eventually becomes deflated, which is called productivity, and everything that that once premium feature when it gets, it gets become table stakes. And so you could think, like, once upon a time, a light bulb was an incredible luxury, and in some parts of the world, it's still an incredible luxury. But for most people, they have a lot of light bulbs in their home. and same thing with TVs and travel. So what once was a very fancy first class seat is now kind of table stakes for like a premium seat. So what happens now when everything becomes table stakes that was once premium? And so to introduce the topic, I wanna pass it over to Rachel. Rachel, tell us a little bit about what you're thinking and what you're seeing in the market when it comes to premium travel.
Rachel Satow: Yeah. So this is such an interesting, an interesting thing that's happening, but premium travelers are, by nature, a pretty small but important group. They represent about 6% of international travelers, and in North America specifically, they're just hovering around 10% of international traffic. But of that super small group, they are generating $180 billion in global airline passenger revenue, and overall, that accounts for almost 25% of, of the gl- global airline passenger revenue. So you have this super small group that is making up a really heavy part of the passenger revenue. And what we're seeing is that because they generate so much revenue, there is this, like, race to keep up with the Joneses in terms of premium features and in an attempt to differentiate. But the problem that's happening is we're almost seeing a commodi- a commoditization of the, the, the premium experience because everyone is chasing the same type of features in order to say, "Well, hey, this airline offers lounge access and two extra inches of your seat and drinks and snacks, etc." Okay, we also need to do that, and then we're gonna push it further, and then that airline A comes back and is like, "Well, hey, they're offering this. We need to also add it." So the floor is constantly rising, and you're seeing this, like, chase for the most premium experience possible. But in reality, what's happening is because this is such a small group of people, premium experience as they're trying to have that feature parity, really going down because, you know, we'll get into this in a little bit. It, doesn't feel premium anymore. Like, now it's so accessible, and you have different individuals who are, you know, they might not have the proper status to get into it, but they're willing to pay to get into it, to have that little taste of a premium experience, and then it becomes, well, is this actually worth it? Like, I had this status, I worked for this status, and now it doesn't actually mean anything because XYZ person is also able to, to go after it in a different way. so there is this, this, this chase for just keeping up with the Joneses, like I mentioned, and, it's, it's really fascinating to see how that's actually affecting customer experience overall for these premium flyers.
Brandon Giella: Yeah, on that point, Jessica, what's, what's been your experience? I know you live this all the time and you're, you're deep in the weeds on all this stuff, but, you know, what has been your experience as a, a premium traveler?
Jessica Steinberg: Yeah, I mean, I totally agree with Rachel's take. I think what's really interesting or been really interesting to watch is these airlines are not only elevating their premium experience, and so, you know, you're essentially ca- walking into a, a small New York apartment on your, on your airplane seat, with all of the, you know, elevated offerings that airlines are providing. But beyond even just elevating the current, you know, commonplace lie-flat seats, things like that, there's, I think, you know, again, this commoditization of what is premium, and I think it's kind of expanded. So, you know, you have United offering base Polaris. You have Delta's basic business. You have this kind of more commonplace, more attainable form of premium travel. So, you know, you're not flying in Polaris. You're not in, like, the giant suites, but you have the base Polaris, so you have something better than, you know, the folks in economy. And so again, I think it's, it's not only elevating the current premium experience, but it's expanding what a premium experience even means. and I think we're gonna just keep seeing more and more of this, where eventually it'll be more commonplace to see a plane full of premium seats with only a small amount of economy versus the other way around, which has been really interesting. But again, to Rachel's point, are you … If everybody's flying premium, are you flying premium? I think, you know, that's kind of the question I have
Rachel Satow: Yeah, and, and it, it is, it is really fascinating to see just how much these, these major airlines are investing in premium experiences. Not just the overall experience, but, like, in order to catch up or almost get ahead in, in seat capacity. So United has increased their premium seat capacity since 2019 by 46%, compared to just over 10% at Delta and American. Now, whether that is, going back to the idea of, of, like, feature parity and just, like, Delta and American already had X amount of, of premium seats and United is catching up, that's, you know, to be debated . But, you're, you're seeing this true investment in just, like, the idea of a premium, a premium experience and making sure that premium seats are available. and just to your point , like, if you're flying on a plane where, you know, 80% of the seats are premium, then it… Doesn't it kinda flip-flop?
Brandon Giella: Yeah, it's kinda like in other industries, you know, a lot of, like academics, people in the education world talk about grade inflation. You know, if everybody-- if one professor or a s- college or, you know, university, everybody gets an A, then it's like, well, what the, that degree is meaningless, you know. Or
Rachel Satow: Mm-hmm.
Brandon Giella: trophies in other sports and things like that. But, but I'm, I'm curious, it sounds like what you guys are getting at is there's i-in addition to some of that, kind of, y-you know, I call it, call it seat inflation, but it really historically is kind of a deflationary thing. but, it sounds like it's adding a lot of complexity to the traveler experience as well. Like, so you've got basic economy, then you've got main economy, and then you've got, you know, premium, and then you got premium plus, and then there's
Rachel Satow: Mm-hmm.
Brandon Giella: gradations of, like, what my experience is like. So where do you go from here? Like, how do y- is it, is it that we're, like, teasing apart, like, what is premium, but then is it, like, maybe premium becomes something else where it's, like, simplicity or service, or, like, how do you, like, start to tease apart, like, how do you define premium and then what to do about it? But I don't know, that's kinda where my mind's going.
Jessica Steinberg: Yeah, I think it's, you know, the part of the premium experience is simplicity, and I think some airlines do it better than others. But, you know, in, in a former life, you know, working in the airline industry and, you know, actually having experience watching customers show up to the airport where the fare that they booked has changed since they booked it, you know, what's included, whether it be a checked bag or a carry-on and things like that, and watching them be incredibly confused. I think, you know, there's something to be said for keeping things simple and, you know, there is constant change in this market. I think, you know, even being in the industry, it's difficult to keep up, so how do you expect customers to keep up?
Brandon Giella: Yeah, it makes me think of, you know, something we, we talked about before we started recording was about lounge access. I'm a, I'm a, American Express Platinum card holder, and so you get Priority Pass lounges. You also get the Centurion lounges. But every time I go, there's a half-hour wait. And so, but then it's also, like, the rules are changing. Like, I can't bring guests anymore unless I heard- hit a certain threshold of spending for the year, and then I can allow guests. But then it's o- it's only, there, you know, I talked about, I think on the last episode, like, there's certain lounges that, like, my American Express app will tell me I have access to, but then I get there, and the person actually like, "No, you don't have this, like, special ticket or something on your, you know, ticket." I had the wrong acronym or something on my boarding pass, and they didn't let me in. So anyway, I'm curious, how do you guys think about, how you would, like, define, premium for somebody to have that kind of experience? Like, either coming at the gate, the way they check out, what, like, seats they might get. Like, how do you think about that?
Jessica Steinberg: Yeah, I mean, I think, so as a, I'm on the other side, I'm a Chase Sapphire, Reserve card holder, and I've had really similar experiences where, you know, you're going, you have an hour till your flight, but the wait to get into the lounge is 30 minutes. And, you know, I find myself thinking, "What am I paying, you know, $700+ a year, for if I can't get into the lounge?" And so it's that commoditization of, you know, if everybody has access to the lounge, is it really access to a lounge? and so I, I do think it's interesting having seen, you know, airlines like JetBlue actually get into the lounge space recently, and trying to elevate, you know, customer experience there and the premium experience there. it's definitely been interesting, but I do think, you know, the Chase and Amex examples are really common, and airlines have to be just as careful. If they're gonna offer, you know, premium customers who purchase a premium seat access to their lounge, but 80% of the flight is a premium seat, then how does that work? and obviously, you know, it's, that's maybe what we're looking at for future. It's not current, but it's definitely something I think that's kind of where the trend is heading. And I do think, airlines have to be careful, also the credit card companies, 'cause if, if the benefits aren't there, then what is enticing a customer to stay? and I think, I personally think there's a lot of room for growth for the larger airlines in the premium space to focus more on where is the customer journey still maybe even a little bit painful? What happens when you lose a customer's bag? What does that customer service look like? You know, things like that where a customer's gonna remember that maybe negative experience, and how can you make that better for a premium customer versus just, you know, giving them lounge access.
Rachel Satow: Yeah, I completely agree that it, a premium experience is not a premium seat. The two are, are … the two are not the same thing. or even the features on the plane. I think it begins at the moment of booking, and even maybe before that, the moment of search. What does the premium experience really look like for that 5% of people who are flying, internationally? And I think it's important for us to acknowledge that, you know, features, premium features have a life cycle. Features in general have a life cycle. To your point earlier, Brandon, like, light bulbs used to be the, the hot new thing, and TVs used to be the hot new thing, and it's the same situation with the premium experience, or really any, any experience when it comes to, to product involvement. so features do have that life cycle and, you know, life s- lie-flat seats used to be revolutionary in, in a premium experience, and then it was direct aisle access was the differentiator, and then it became, like, private doors, and now it's Emirates private apartment little situation that you mentioned, Jess. And because that floor keeps rising, you have to look beyond what is the physical product that is, quote, unquote, premium. Because if you are investing so much in the, the tangible, the intangible becomes, almost a back burner, and, those are often the moments that matter the most. You know, was there an extra level of care? Did you have You know, Brandon, you mention often on the podcast that you're, you travel with small children. Do you have someone there knowing that this premium flyer has small children? Do you have someone there that can kind of assist you with the, the carry-ons that you have for your, your, you know, your car seats, et cetera? Like, there is something to be said about the human aspect of a premium status or a premium experience that goes well beyond just the product availability for that premium experience. And when you're thinking about how to differentiate, that is what will count most. They are E- if everybody can get a lie-flat seat or direct aisle access or a private apartment, not everybody can get a private apartment, but it, the, the point stands. But if the physical product, you know, is pretty consistent across airlines, what does the entire brand experience really feel like? And if you're solely focused on the physical product of premium, then you might still have areas, to Jess's point, where there, that would, there are those friction points, and that tears apart the premium experience altogether
Brandon Giella: I totally agree. I totally agree. And I, I would go so far as to say that those intangible experiences, as you say, like kind of that overarching experience that you have with a brand, the little things actually become way more important,
Rachel Satow: Mm-hmm.
Brandon Giella: think that they're that expensive. I think what we would naturally think of is like, "Oh, yeah, I need to create this incredible, you know, seat or lounge or something like that." And it's like, I actually don't think it's that. And what comes to mind for me is, I went to a… It was a five-star hotel, but I went to this hotel in London, and they knew that we had a two-year-old with us. And so they have these-- I'm sure they have like a whole box of little teddy bears behind the counter or whatever. But they gave my daughter a teddy bear, or it was a dragon or something. And I-- we still have that little dragon around, and I still think of that hotel and that moment. It was that one thing where they gave a, a dollar you know, dragon to my little girl, and like it just makes me have such a great impression of that brand, a tiny little thing. or I, I bought a car recently at a dealership that's known for really great customer experience, and, and they had a box of like, crayons and, and like coloring sheets for my little girl so that we could-- I could talk to the, the dealer, and she could be busy doing her thing. And like, it's things like that. Or, there's a- an advertising executive named Rory Sutherland who argues that if you had a-- if you put a lot more of your marketing budget toward a call center and had a lot of people available to talk to human beings and work out their problems, that would actually be one of the more effective things you could do in your overall marketing. So similarly, like having more gate agents available so that you, you know, could have-- you could service more people, and there's not these crazy long lines, and where you could actually create a brand that, travelers see on those, you know, introduction safety videos when they're on the back of the headrest where everything looks so lovely, people are happy, nobody's yelling at you. 'Cause meanwhile, I go to major airlines, and I'm trying to get all my bags, and there's this like three huge long lines, and I'm dealing with a kiosk that barely works half the time. Somebody's yelling at me to go in this line, and it's just chaos. And it's like, what if you just had more gate agents available to like talk to people and treat them like human beings? That's not super flashy, but it makes a really nice experience, and I think that's something that should be really valuable.
Jessica Steinberg: Yeah, I totally agree.
Brandon Giella: now. But that's me.
Jessica Steinberg: I, I totally agree. I mean, if you've ever been near a gate for a canceled flight, you know, late at night even, if there's no hotels in the area, if it's, you know, weather related, it's not even most of the time the airline's fault. But being able to handle those customers' problems better, I think would go a lot further than the lounge access they had on the way, you know, on the way there to their trip.
Brandon Giella: Totally
Jessica Steinberg: that is, you know, it's hard. It's not an easy thing to fix. You know, you can't create hotels, but there are definitely ways I think airlines could tap into those slightly more painful but inevitable points of the travel journey that I think would kind of elevate that experience. even as far as like I've I don't know about you guys, I have waited on so many car rental lines for a ridiculous amount of time, but Avis now has, I think it's called Avis First, where, you know, the car is waiting for you when you walk out of the airport. You don't have to get on the shuttle with your bags. It's not a whole, you know, song and dance like it is usually. Maybe airlines need to partner with them and, you know, offer things like that and, you know, give customers the chance to have just a more seamless experience. You know, get what they paid for.
Rachel Satow: Yeah, that's such a great example of, and, and like a, a great thought process of I can't necessarily improve my direct premium experience for whatever reason, are there people I can partner with that have an, an equally experience that, we can kind of smooth out that kink in the process. I think to, Brandon, to your point about like some of these improvements may not be, you know, a, a high-ticket i- item for, for airlines to invest in. I mean, w- everything we're describing is very service-oriented, and in reality, adding an extra head at the counter is, is definit- like, yes, obviously it comes at a cost, but ensuring that those people feel, the autonomy to make decisions and that they also have the tools that they need and that their experience is, is seamless because trickles down from the top. If your, if your gate agents don't have the proper, you know, technology or it's, it's difficult for them to kind of navigate ways to provide excellent service, that's something that in and of itself can create a premium experience for all travelers, not just premium travelers. and it makes a huge difference because, I mean, yes, one more head would be great, but if that one more head is also dealing with, you know, slow technology, inability to see everything, they, will face the same problems and you still see that backup happening. I think it's really important that sometimes just investing in the training and the technology that your, your team, your on-the-ground team will be dealing with, it can go, go miles, pun intended, for the, for the everyday traveler as well as your premium traveler. so don't forget about the people who are, like, having to provide this service and ensuring that they get the proper training and that they have the tools that they need to be, providing the best services possible for any traveler
Brandon Giella: I, I have a hypothesis about this, I think like to your point, like it's the overall experience, like one more gate agent, but it's also the support, the tools, the software, you know, that kind of thing. And I-- my hypothesis would be that I think it's easier to put forward a loyalty program or a, a customer experience initiative or premium initiative when you can say, like, "We're adding this number of seats with this price, with this margin," and like sell that through the organization to create the program than it is to say, do this like kind of, know, kind of initiative on our like software or like our customer support, you know, process or something like that." That's a little bit harder to see, like to make that direct premium connection, like on a spreadsheet to sell through leadership and through the board. That would be my, my guess. But I, but I, I would encourage people to think like, like Rory Sutherland talks about, again, that, that advertising executive, he talks about how like if it's thinking about the psychology of the traveler, and he makes a point that like waiting for an Uber is more stressful on the human mind if they don't know when the car is going to show up. So if they just have like a timer and like a map, and they embed that in the software, it alleviates that stress and anxiety in somebody's mind. It's a very small thing to do, but it actually e-elevates the experience. Or like I read an article in New York Times years ago that was talking about like luxury is actually like could be just quietness, like silence is a luxury. And so you, you could put on like noise-canceling headphones and have a way better experience because it's just quiet. It's not as chaotic. You know, there's things like that that I, I bet there's more creative approaches. But I-I'm talking
Rachel Satow: I mean, I would, I would challenge an- I would challenge anyone walking into the boardroom who is saying that you need to do a physical product upgrade first rather than investing in your people to just really take a look at some of the customer feedback regarding service. so JD Power's, 2026, I think it's the only for North America, but the, the airline satisfaction survey that they have is it focuses heavily on onboard experience, day of travel experience, and communication and value for money. So when, when you are seeing that airline satisfaction study saying that the onboard experience and the day-of-travel experience matter more than the value for money, you kind of have to take a look at your service because if ev- again, if we go to the fact that feature parity is a thing when it comes to, to premium access, like your experience becomes your differentiator, and we've talked about this before. But in that same, the 2025 version of that study, it talks about how it's, it's over 80% or something like that, of passengers who say that they had a, a perfect airline experience would come back and fly that airline again. So when you take into account how heavily people are saying the onboard experience and the day-of-travel experience matters, and that it is those two things in particular can make or break whether or not someone flies your airline again. Like, I, I, like I said, I would challenge anybody walking into a boardroom saying that they need, need, you know, doors, and, and extra privacy rather than investing in the people providing experience and just making a more seamless, a, a, a seamless path both for your employees and your, your, your premium flyers and, you know, your non-premium flyers as well. Like, To me, that's way more important in, differentiation than it is, you know, "Oh, okay, I have another inch of leg room." Then again, I'm not the tallest person, so maybe another inch of leg room is important.
Brandon Giella: enough
Jessica Steinberg: It's okay. I'm not, also not the tallest person, so the inch of leg room doesn't really do much for, for me anyway. But I think, you know, Brandon's example is a great example of, you know, he remembered that, you know, the hotel of someone that gave his daughter something. And, you know, I've had experiences on airlines where, you know, the flight attendant or the in-flight crew know, you know, I'm flying for a bachelorette party or whatever it might be, and they, you know, make an announcement on the plane. Like, that costs nothing. but it's memorable. It's funny. It's, you know … It makes the experience, you know, something that you look back on versus just another flight that you took. And so, and again, those things tend to cost nothing. Now, he did, he did give us all a free drink, but, you know, that I can't imagine cost too, too much in, you know, in return for, you know, the brand equity that it, it gave all 10 of us
Rachel Satow: Yeah. There was, there was an, an example, that I talked about in a c- a few episodes back of, friend of mine who went to go see the, the Eras Tour in London, and pretty much everybody on the flight was going specifically for the Eras Tour, and they … And, like, the, the pilot ended up making a Taylor Swift joke. The, you know, they played a song, etc. So it was like, if you just … I mean, the airlines already know who's flying. You know details about these people, especially your premium, your premium flyers. So, like, just use those to your advantages to, to, to create a, a, just a slightly different experience than, "Okay, everybody, we're buckling our seat belts, and you're gonna watch the, the video, and at the end you're gonna go either grab your bag from above, or you're, you're, you're gonna go pick it up at the,
Brandon Giella: Yeah.
Rachel Satow: at the, the, the luggage claim." So definitely there's ways, small ways that don't cost anything to, to make a truly differentiated experience.
Brandon Giella: Totally. I mean, a simple one as you were talking, I was thinking is like you, you already know on my itinerary or on, on my boarding pass that I have-- you ask for the birthdate of all the people that are on there. If you see one that's less than five years old, then like put me in the pre-boarding. Just put that on my boarding pass already, not group six. You know I need to go on the pl- you know, it's just little things like that, like super easy. Anyway, I'm curious, so a-as, as we kinda, kinda close out, I wanna talk, back to your point, Rachel, about, that these premium travelers are the minority in terms of the overall bookings, but the revenue generated is, is pretty substantial for this chunk of, of travelers. i- are there any more thoughts that you might have on maybe the demand side? Like I know that price, cost of flights right now, you know, kind of fall of 2026 are getting a lot more expensive because of jet fuel prices and other things like that. But, but are there things that you might, you know, think about or recommend when you're thinking about actually these premium travelers where they're not price sensitive and, you know, there are things that we can recommend maybe to, to premium travelers that would be willing to pay a lot more and, you know, just kind of that, that thread. Is there any more there, you think?
Rachel Satow: Yeah, I mean, so, something that I've, I've been thinking about is almost, granted, there is a lot of investment into premium experiences and, and premium products throughout airlines, but it, it begs the question, are we just creating a paradox where we're seeing an investment from the airlines because there is a high amount of, of passenger revenue that comes from premium seats, so they are investing more in premium experiences, so you have, you know, more premium seats available. But that also mean … But, but the amount of people that are traveling doesn't change. So you then see the people who would technically be flying, you know, economy or, or like, the cheapest fares possible, almost their hand is being forced into investing in a premium experience, whether they really want to or not. Like, I myself am a budget flyer. I do not mind sitting in the back, as long as it's not next to the bathroom. And I am totally comfortable with that. That's fine with me. but would probably be challenges from my side because I'm not, I'm also not a frequent flyer. I, you know, probably take one to two trips, major trips throughout the year, and then, like, it's smaller, localized, like here, I live in Gainesville, Florida. over to Atlanta, that's a 45-minute flight from where I am. So, like, there might be some, some mini ones in there. So for me, I'm not in- I'm not thoroughly investing in a premium experience every time I fly because it's so infrequent. And you will probably face this, like I said, this paradox of airlines are creating more premium experiences, so people who might not invest in the premium experiences as it exists today, their hand is almost forced in those premium experiences, and then they can report, "Well, our premium experiences are up X amount of revenue." And it's like, yeah, because you've, you caused that. You caused that to happen. and it just kind of snowballs, right? So then they invest more into the premium experiences, and more people are almost forced into it. So I think, And that's me rambling. But it's just I Take a good hard look at who's actually flying your, your airlines, because might have the people like myself who pretty infrequent flyers who just need to get from point A to point B safely and in the most fiscally responsible way possible. And don't necessarily want to force them to to invest more in their, the experience that they're wanting just because you're chasing that next dollar. That in and of itself is going to, to ruin your, your overall customer experience
Jessica Steinberg: Yeah, I can go
Brandon Giella: there's analysts that look at all this kind of stuff and,
Rachel Satow: Sure
Brandon Giella: through the data. But yeah, it's, it's hard. And it, like people change during the seasons too. It's like sometimes on this trip I'm flying out tonight, I want the bare bones, cheapest possible flight, I'm gonna have like an iPad with me, and that's all I'm gonna have with me. You know? But like some other times with my family or whatever, I do want that really nice
Rachel Satow: Yeah
Brandon Giella: you know? So anyway,
Jessica Steinberg: I completely agree, and I think, you know, it is kinda forcing a lot of customers' hands. Like I said, the basic, you know, the business basic or, you know, the mini, you know, I guess call it premium experience where you get some of the, you know, the good stuff, but it's some of the economy stuff too, is definitely forcing people's hands because there's, you know, more and more of those seats and less and less of economy seats. but I definitely think, you know, it's, it's interesting to see these airlines continue to evolve 'cause again, I think they are kind of creating their own, I guess, call it, you know, demand. but I think, again, focusing a little bit more on those disruption points where they're inevitably gonna happen is gonna be where the airlines can truly, you know, differentiate themselves between, you know, premium and not premium
Rachel Satow: Yeah.
Brandon Giella: Well, is there anything else that, comes to mind for you guys that, you know, data that you've been reading or, or any other kind of, kind of articles or, or points as we close out this conversation?
Rachel Satow: I mean, I think the, the biggest, and this is not something that we can answer today, I don't think anybody could really answer. It's more of a just, like, food for thought for the, for the listeners. But, like, airlines have spent so many years democratizing access to premium or minimum, like, piecemealing the premium experience for a regular flyer, you know, the question that they need to ask themselves is, what happens when we succeed in that effort? Like, and everybody has access to a pre- at least little parts of the premium experience. Because exclusivity exclusivity in the premium experience doesn't scale infinitely. It's not like you can keep going, keep going, keep going. You know, airlines want more premium customers, but part of that whole value proposition of a premium experience is that fewer people receive the experience. And to just keep s- keep saying this, but, like, if everybody's premium, is there really a premium? And while I think, you know, in the short term they can, they can have, force the, force the hand a little bit, but the, you know, the addressable market can expand because there are people who are willing to, to move, into that, like, upmarket. it, premium just, it, it doesn't mean that it's exclusively corporate anymore, and it, you know, these leisure travelers like yourself, when selectively you want to be a premium traveler, you can. Like, they will expand the pool. Yes, that will happen, but your overall experience of this, this idea of premium, premium offerings, like, it cannot scale infinitely. And I think we … You know, something I was thinking about internally with our team is, you know, this idea of the long view, and the long view is instead of looking in quarters and just making, you know, expanding your margins quarter over quarter in order to make stakeholders happy, you need to be looking five, 10, 15 years later. Because if everybody continues to invest in a premium experience, you need to find ways that truly feel premium. or else it's going to be, you know, like a basic economy seat again
Brandon Giella: I,
Jessica Steinberg: Yeah.
Brandon Giella: agree
Jessica Steinberg: I think it, like you said, Rachel, if peop- if airlines are focusing so much on the premium experience, then I think at some point they're gonna have to look a little bit further on either end of the travel journey and figure out what are the ways that we can improve experience there. Because if, you know, if I'm looking for a flight and there are three premium seats on three airlines that, you know, are about the same price, what I'm gonna start looking at is, you know, route or network. Where, where am I flying into? What time am I getting in? I- which is, you know, getting me into the airport at the better time. You know, do I wanna skip rush hour in New York City? Things like that. Those smaller things that I think maybe airlines are thinking a little bit less about when it comes to the premium experience, I think will probably start to matter more
Brandon Giella: if I could summarize, like based on both what, what you said just now, it, it's sort of like one end of creating a premium experience, your, your overall brand, there's just improvements that you could probably make on the service side. Just literally making people's like the, the customer service, customer experience, that they have just better overall, just being treated like a human being and looking at those details and is there a way we can improve the technology, the call centers, the gate agents, like that whole, you know, booking to plane deboarding, kind of experience. So there's that, and then on the other end, it's like, okay, for truly premium, premium, you know, loyalty or traveler experience, there's something maybe further afield and much more exclusive to be focusing on. And, and what comes to mind there is maybe like the American Express Centurion card, which is almost like mythical. Like some people don't even know if it exists, you know, the, the mythical black card that you get invited to eventually. some say it's like to spend, I think, $400,000 on their card per year to be able to even begin to be invited and go through the application process. And then what I've heard is it's $50,000 a year in fees to be able to hold that card. So that's like ultra, ultra-luxury. so it's not quite that, but what I do love about that is like you are invited to this. You do not-- You are not p- you know, you don't just get in. But I love that idea of like I am truly a premium loyal member of this brand. I don't think it has to be that extreme, but just like, you're, you're not allowed in. You know? This is like reserved for like our most loyal people. So I think there's like two ways to be thinking about that. If everything's premium, maybe elevate the overall brand experience, but then maybe there is like a true elevated exclusive, you know, premium product that you could offer somehow. Is
Rachel Satow: Yeah, I think,
Brandon Giella: of what we talked about?
Rachel Satow: yeah, I think the only thing I would kind of, the only thing I would put an asterisk on is, I don't think it's limited to service. I, I think you … Yes, service is a major part of, of, of customer experience, but, I think it's more of a bucket item of like invest in consistency, because at the end of the day, people really want something that's reliable. And a spec- spectacular seat, a, a really beautiful lie-flat seat with private door, etc., the, a spectacular seat is followed by a bad lounge experience or even just like, you know, poorly stocked lounge because it, everybody's there, or a broken app or, you know, just terrible recovery in, in, in times of destruct- disruption. Like, all of that can really affect things. And so I think investing in consistency, not just service. Because service, yes, is, is one of the tangible aspects there, but consistency across the board of are our lounges properly stocked? Do they have enough people walking around making sure? Are we ensuring that, you know, granted capacity keeps, keeps, increasing at these lounges, but like are we making sure that this still feels like a premium asset? so that consistency I think really becomes the luxury product aspect of premium experiences. If we were to say start to look off your planes. Like, if you can't continue to make the actual experience of a, of a premium seat and a premium ticket holder, better on your planes, start looking off your planes because that's m- that consistency and I, and that experience I think is where the real opportunity lies
Brandon Giella: Great word. A great word. And I feel like we should post-script this entire conversation to say this is enormously challenging. Like, we, we
Rachel Satow: Oh, yeah
Brandon Giella: know, leadership at major airlines and, and all of their various partners, like rising fuel prices. You have pilots, weather. Like, it's an enormously complicated challenge, and we, we empathize with that. But there are some things on this end, you know, of the loyalty provider end and on the traveler end that I think there are some things that, that, that would be great to be thinking about this year. So I'll
Rachel Satow: Right.
Brandon Giella: Team, thank you so much. I love your insights. I appreciate your experience and expertise, as always, and I'm excited to see you again on the next show. We'll see you then.
Rachel Satow: Thanks, Brandon
Jessica Steinberg: Thanks for having me
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