jbarm

5/24 LAX: 6 pm. Sign out. Resigned to the fact that getting into the lounge at LAX is a low probability event during normal hours.

Went over to the KAL lounge in Intl terminal. Much more spacious. Food is meh at best, but you do get Cup O Noodles. woo

kevincrumbs

5/30 at LAX: Sign was out (permanently?). Not an issue for us in F but FWIW, the lounge wasn't completely packed around the 5:30pm hour. Pleasant stay and I appreciated the "no tipping" signs at the bar.

Duke5150

PP seems to be worthless at LAX. Sign out at Alaska 8:30am

PDXPremier

I think everyone thought that not allowing guests with PP would result in the sign being out less often but it appears it's out just as often if not more. My guess is that AS cuts ties with PP altogether by this time next year (if not sooner).

dayone

There appears to be a range of opinion when the sign should come out. For me, 60% full would be about right. Others seem to think PP should be welcome at 90% of capacity.

PDXPremier

I don't think even AS lounge agents all agree on when the sign should come out so PP lounge access really depends on who happens to be working at the time which is ridiculous from a policy standpoint.

dmodemd

Less people coming in = less work for desk agents :S
....especially all that card swiping and signing rather than just self-serve tablet ...

berliner5000

Another data point..

PDX June 2 10:30am. No sign out. Welcomed in. Lounge was about 70% full. It's emptied out though now.

UAPremierExec

so I spoke with a friend at another airline who is fairly "high up".

PP payments aren't a simple "$20 per visit". There's an algorithm based on # of usage per month, per airport and it changes. He said its not like partner airlines, where you WANT partners inside your lounge - because those can become a liability if they don't allow them in.

Example: American/Alaska. If 25,000 AS members entire the Admirals Clubs each month, AS would need 25,000 AA members to enter the AS clubs each month. That way there's no billing or money back and forth, UNLESS its tied to another benefit. Star Alliance lounges, however, are handled by reimbursements based on the # of entries per month from each airline - for example. Star lounges are not meant for "profit" - which is why most alliance lounges may tend to be a bit nicer than airline-sponsored or backed lounges.

Airline paid memberships are meant to "pay" for the club in their annual budgets. Day passes and programs like Priority Pass are just extra money on top of it. Rarely will an airline actually go into financial deficits for lounges, just for lounges sake.

jackal

Interesting post. I've always wondered how that works.

FWIW, if I were designing a new lounge access program, I'd do something like this:

• Set aside a portion of the revenue for administrative overhead and profit margin (10%?)
• Take the remaining revenue and tell (sell) the airlines that their reimbursement will be based on # of entries in their lounge divided by # of total entries

This would prevent my lounge membership program from ever reaching a point where I overdraft myself and owe more to the lounges than I'm taking in, while it also self-corrects for things like automatically adjusting payments downward for unpopular lounges and automatically handling increased revenue to the lounges when demand goes up because more people join my program. (The more they let in, the more they make, and the more they improve their lounges and steal business from other lounges, the greater share of revenue they get.)

Let's say the membership is $300 a year and I have 500,000 members. Subtracting out $15m for me (not all profit--I do have costs with administration, support, printing cards, sending participating lounges the scanners, etc.), the remaining $135m is up for grabs.

Let's say that I have 300 lounges in my network. AS's five lounges represent 1.67% of the lounges, but only, let's say, 1% of total guests because other lounges are in busier airports, etc. Still, 1% of $135m a year is still $1.35m a year. Assuming 500,000 members and the average member makes 15 lounge visits a year, that's 7.5m visits, and AS is seeing 75,000 of those. That's $18 per visit--clearly not a huge profit (especially if they drink 3 beers on each visit, which AS pays about 80 cents a glass for, and a 50-cent cup of soup, so now they're down to $15 in revenue per visit), but it adds up.

Huh. I just pulled my numbers out of thin air, but actually, I would guess my numbers are somewhere in the ballpark.

But here's where the thought experiment continues. Why would AS cut down on admissions? Let's say they cut admissions down by two thirds (because the lounges are closed to my members during the busiest times and only open at off-peak times). Now we're talking about $450,000 in annual revenue instead of $1.35m. Let's say the average AL membership is $400 (since a good chunk are elites). Now, all we need are 2,250 AL members who would have decided not to renew their memberships because the lounges are too busy and crowded to decide to stay to offset that loss. Given all the complaints we've heard about members canceling their memberships because it's not worth it anymore, does that sound likely? I think it's certainly in the realm of possibility.

I think AS probably had two options:

1) Spend a couple million bucks at each lounge to expand them to accommodate the crush loads, or
2) Cut off PP memberships to stave off the overcrowding

It remains to be seen whether choosing option #2 was the wise option in the long term. They're losing $1m in revenue a year by denying entries, so over 10 years, that additional revenue would have repaid the expansion costs. On the other hand, a lot can happen in 10 years, and so maybe it isn't penny-wise and pound-foolish to deny partners access. Guess we'll see...

Oh, and UAPremierExec, can you please ask your airline buddy how much airlines reimburse each other for award redemptions? That has been the longest-standing unanswered question on FT.

mhdena

I was there 6/1 at 6:45am, plenty of seats.

Gradually filled up from that point, I left about 7:50am and as I was I saw a fellow buying a day pass for I think $45😳

The chairs are nice and comfy, but that's about it, it's no Centurian that's for sure.

mhdena

And does anyone know if paying $45 includes the $8 breakfast?

Apples,bananas, bagels, coffee , etc., the only things free.

RaginPlainsman

06/03/17 - 6:30p - Saturday - SEA N lounge open to PP

HomerJay

6/2 LAX 1145A - Sign not out. Admitted. Staffer in lounge says the nearby Maple Leaf Lounge - which used to be part of the Priority Pass program - has opted out, and that's added to the crush in the LAX Boardroom. It's quite busy, but not completely full.

When I leave twenty minutes later to board my LAX-DCA flight, the sign is out. No priority pass admitted.

pcoll

Don't forget the pancakes!!

$45 Day pass does not include ala carte breakfast.