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Old Dec 14, 2011, 10:12 pm
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keloutwest
 
Join Date: Apr 2011
Programs: UA 1K, Marriott LT Titanium, Hyatt Globalist
Posts: 1,069
I sponsored 3.75% of a SkyClub in DEN

With my last flight for 2011 behind me, I ran a few stats on my flying this year. Here's what I came up with (please, let's not get caught up on the estimates, this is a 'back of the envelope' only):

19 net paid round trips on DL proper (domestic Y cabin, award tickets subtracted) @ $600 avg/rt = $11,400

2 net paid round trips on DL proper (international, paid C cabin, award tickets subtracted) @ $8,212 avg/rt = $16,424

4 net paid round trips on AF/KLM (intra-europe paid full fare Y) @ $800 avg/rt = $3,200 (I feel the need to count this in full since what's good for AF/KLM is good for DL)

Total annual spend: $31,024. Now assume DL yielded a 75% margin on me (my fuel contribution, a few SkyPesos due to IRROPS, cost to service me etc). That means DL made roughly $23,268 net thanks to me (my company).

Now let's say I wanted to run a SkyClub in DEN:

Let's call this a small SC with 2.5 employees on average. Say this club is open roughly 80 hours/week:

2.5 employees x 80 hours x $20/hour x 52 weeks/yr = $208,000/yr
Let's say food/drink costs $1000/day x 365 days/yr = $365,000/yr
Let's say it costs $4,000/month including maintenance/upkeep to rent a suitable space at DIA x 12 months/yr = $48,000/yr

In total, that comes to $621,000 to operate the SkyClub at DEN each year.

Now, let's say all of the profit they made from me went towards this SkyClub in DEN: $23,268 / $621,000 = 3.75% x 365 days/yr = 13.7 days of SkyClub that I've sponsored.

All we need now is another ~27 of you just like me and we'll have paid for the whole club.

DEN services roughly 3 million people, and roughly 7% of the population flies 10+ air trips/ year (22.4/yr avg) [Source: http://www.tia.org/uploads/research/...velSurvey.PDF]. Also, let's assume DL has a 5% market share in DEN of these high fliers.

So, that's 3M x 7% x 5% = 10,500. Since we're only looking for 27, we just need to pool 27/10,500 = 0.26% of Delta loyal, high frequent flyers in the Denver market to pay for this SkyClub. I bet we could find that many here on FT.
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