Originally Posted by
Adelphos
I think we are saying similar things in different ways...
1) Lounge access, at least in the US, is driven increasingly by customers willing or able to pay a relatively high fee for a credit card
2) Credit card related income is increasingly important to airlines, thus they have an incentive to increase the number cardholders
3) Given the high volume of domestic flying and the high average income/wealth of the US consumer, a lot of people are willing and able to pay for lounge access by holding a credit card
4) Slight increases in fees won't change this dynamic drastically - plenty of people find value in cards like Amex Platinum outside of the fee, banks like Chase, Amex, Citi want people to hold as many United Club, Amex Platinum / Delta Reserve, Citi Executive cards as possible (i.e. Amex is not going to try to intentionally reduce its Platinum cardholder numbers, as some have proposed)
5) There is no incentive for US airlines and banks to dramatically raise the price of their card fees, lounge memberships, etc given all of the dynamics described above
The best Amex can do is tinker around the edges, which is what the guest policy is. Amex has no real incentive to put into place policies to drastically limit access (such as by reducing access to Centurion cardholders only, doubling the effective fee of the Amex platinum by reducing credits, etc) because Amex is in the business of increasing Amex Platinum cardholder numbers and fees paid, not in the business of providing exclusive and quiet experience in a dozen or so airline lounges. So don't rely on Amex to provide you a quiet oasis in an airport, the economics here don't support it, especially for domestic flights. If you want really premium lounge experiences, you are going to have to buy it via booking international first or business class and using those lounges when available. Domestic lounges, at the end of the day, are a mass luxury product.
Pretty well put, I agree that we mostly agree.
I guess the only thing I might add though, is I sort of separate what UA/AA/DL are doing with their lounges and their credit credit cards which provide access. Again, they have cards with pretty high annual fees (and in fact, both UA and DL have raised their fees over time) that really don't have any type of credit offset to reduce the "effective annual fee" (other than perhaps DL offering a companion certificate). So people getting those cards are pretty much paying "full freight" for lounge access and they aren't offsetting that with a bunch of cashback type incentives. IMHO, that is actually turning the AA/UA/DL lounges back into the better experience. They seem to be less crowded now, etc. Not perfect by any means, but improved.
I mean, I can recall people in this forum saying they were going to ditch their AA/UA/DL memberships, once their were more Cent Lounges built out, but many have changed their tune on that front, because the UA/DL/AA lounges are less crowded now than Amex CL.
OTOH, with Amex (and over time Capital One and Chase), there is a very different model in place, which is growing the cardholder base at all costs and providing "subsidies" to make the high annual fee palatable for cardholders.
But I completely agree with you, 100%, that Amex isn't going to do what it would take reduce demand for the lounges. Just not going to happen.
Which pretty much brings me full circle to why I made the comment that I ascribe $0 value to the Cent Lounge when deciding to keep the card or not...
Regards