FlyerTalk Forums - View Single Post - United Club changes (drinks and Wifi) - Sept/Oct. 2013
Old Sep 15, 2013, 8:48 am
  #931  
Darlox
 
Join Date: Feb 2009
Location: CLE
Programs: UA 1K MM, DL Plat
Posts: 982
Originally Posted by texas gold
Why is it so difficult (or non-profitable) to offer a lounge experience more inline with LH's Senator Lounges?
While there's no way to confirm this, I suspect the answer is pretty simple. UA is making a lot of ancillary revenue with the "You're In" stuff, and collecting the fees for an enormous number of travelers to filter through the club. At the same time, they figure (and are probably correct) that most paying members are getting their membership through some means other than coughing up $400/year personally (company, credit card, etc...)

So by squeezing the clubs, they cut costs and (they believe) still get to collect the admission fees and partner affinity benefits of an endless parade of one-off flyers who aren't in the clubs enough to realize that a) this isn't typical of global airline lounges, and b) don't spend enough time there to be cheesed off by having to pay something for booze on top of their "free" admission.

Meanwhile, LH and other airlines still tightly control access to their clubs, and only high-revenue ticket passengers, or high-frequency loyalty travelers, can hope to get in. That crowd also tends to drink less, on the whole, and demand a higher-quality product when they do.

So when you're making several thousand dollars off of premium cabin customers, giving them top-shelf liquor for free is a low-cost proposition. When you're making pennies off of N-bucket flyers twice a year, who have a $95/year credit card, and are more likely to have 4 drinks prior to takeoff on their couples golf-outing to Hawaii, suddenly booze is a cost center.

I think this is a reaction to the underlying model UA has chosen to follow, and they probably couldn't care less if they lost a few thousand paying members, whose $400/year is no longer their primary revenue source!
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