Originally Posted by
zxrst
No, this is the least profitable guy for Amex and Amex DOESN'T want him in the lounge. Let's say $50 is the real cost of a visit. A guy who is visiting Lounge 100 times costs Amex $5000 a year. Amex earn 1.1% from his purchase (2.1% processing fee -1% rewards) so he need to put in 400K spending a year for Amex to make it even ($5000 - $550 AF). On the other hand, a guy brings his two guests twice a year only cost Amex $300 and his AF would cover it easily without spending a single cent.
This is why Amex increases the access to it lounges (massive SUB, Delta reserve, AUs) because they are losing money on the frequent flyer guy who only pays AF ONCE but gets into lounge every other day.
Actually those "road warriors" cost AmEx even more. The same poster kept saying AmEx making a lot of $$ from those "road warriors" charging air tickets on the Platinum cards. Then AmEx would have to give out 5x MR points on those air tickets. AmEx would have to charge airlines at least 5% swipe fees to break even. We all know that is impossible. Those "road warriors" are sucking the juice out of AmEx.
Amex incurs the primary costs of operating the lounges (rent and staff) regardless of who enters. So the incremental cost of any one cardholder entering is really only the F&B consumed on site.
So, a single "road warrior" going to the lounge 50 times a year, vs a family of 3 that goes to the lounge twice a year. Which incremental cost is higher?? I guess we can all do the math. Good statement though....
Originally Posted by
steve4
In the interest of reducing overcrowding, I think Amex should not have given Delta Reserve card members access to the Centurion lounges. They could also limit free guest access on the Platinum cards to just one guest instead of none. I generally travel solo, but sometimes travel with a guest or two. The new policy of not allowing any free guests seems harsh to me.
When do you think that AmEx is in the interest of reducing over-crowding by cutting Delta Reserve cardholders? This is the "benefit" that can be hugely popular with those Delta Reserve cards. AmEx just cramps all the cardholders into the lounges and let cardholders fight for the seats, and the remote controls. Do not forget those.
Originally Posted by
dhuey
How would eliminating free guest visits not affect lounge crowding at all? Do you expect all the guests to pay the $50 and keep coming? Not too many will be coming in for free with the $75,000/year spenders.
If 500 people want to get into the lounge that has a capacity of 150. Do you think removing 50 people would fix it??
I guess AmEx would give those 50 people or their families some "retention" to get back into the lounge. This $50 "guest cost" is a very legit reason to ask for retention. Or those cardholders will be out. Just as [MENTION=28759]Mama[/MENTION] had wished. I'm certain AmEx will sign up 50 more cardholders to replace the 50 cardholders who quit. Some of those 50 cardholders could be "retained" too.....
Nothing is going to change the lounge over-crowding, period. Some want the access on arrival. That would be a disaster....