Should CX have a F and Diamond only lounge?
 

Should we renew the argument whether Cathay should just use this lounge as "OWE/OW First Class lounge" and restrict Wing First and Pier First to Cathay DM and First only lounges.

Haha boy are you looking to stir the pot....

Please make this happen.
Please.

If anything they should restrict it to only revenue F pax then (or the DM+ tier maybe). Why let normal DMs in?

Still, it won't happen. CX have invested too much spaces in both the lounges and count on elite $$ to use the lounge that restricting it would be a money losing proposition for them.

For other lounges with only F or super elite (eg SQ TPR and CCR), they only have 1 location in their home terminals. If anything, it would be more practical to make G16 this space (though its location also doesnt make it that practical...)

Because "normal" DMs contribute far more revenue than about half the Alaska / AA redemption gang who make up the F cabins these days.

DM is the highest spending top tier cohort of any major global FF program. That data is from 2010, but still likely right there. CX gouges us DMs. You've got DMs who fly J exclusively, not much F, who are close to 100k USD in annual revenue. I've seen threshold numbers for United's "Global Services" thing from the same consultant who did the program review, something like 1/3-1/2 of "regular" Diamonds would qualify.

CX knows who butters its bread. It's not the Alaska redemption gang.

People only want that (setting the tier at normal DM instead od DM+ or something else) because they are DM

Still, I would argue that opening Pier F and Wing F only for DMs + First is more likely than not a money losing proposition (ie the net profits that these DM contribute will be less than the cost it will take to maintain both lounges open). So why would CX in their right mind do that?
But if they must, by all means open a new smaller dedicated facility (like Concorde Room, TPR for F pax and maybe high value $ status pax - like the SilverKris F lounge...)

To say to open G16 for OWE and keep Wing F and Pier F (for F and maybe DM) lol... thats just insane economics (esp when people complain that there are too mnay OWE, AA/AS redeemers lol).

What will be interesting though is if CX values OW elites who fly their metals (in discount Y)...

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Ha I will shamelessly admit I am arguing my own corner.

But, this doesn't mean it's the "only" reason why CX wouldn't blatantly discriminate against DM. More specifically, it doesn't make the argument wrong. The #s are pretty straightforward, you can even ask other airlines: CX DMs spend far more to reach OWE than the other programs' top tier. The guys at AA I know estimate their EXPs spend about 1/3 the average of a CX DM (they also believe SQ PPS Solitaire has a very high average spend). It's a huge disparity in customer value and discriminate against them at your own risk. The last thing CX needs is to infuriate their hands down highest spending customers. DMs are just a high yielding customer crop. It's 100% due to CX's good fortune being in Hong Kong, I'll add, aka it's not due to any special skill that CX has. It's still heavily financial and legal folks filling DM ranks in a very wealthy, niche, focused city-state. If Hong Kong were to lose its status as the financial hub of Asia, I imagine DM average spend would plummet.

yea, I should probably add I don't think the scenario is likely at all. And your point makes perfect sense...I still don't 100% understand the economics of lounges with partners, but it seems to me that it stands where CX makes money accepting partner entries. And on the logistics to your second to last line (open G16 for OWE only, Wing F+ Pier F for DM only), there are also so many OWE passengers in Hong Kong that to stick them in a tiny lounge would be pure insanity. Agreed.

A more likely (but still unlikely, IMO) scenario is to make G16 a DM + F only lounge. However, I think there are too many DMs to entertain this possibility. The problem is there are just too many damn people in Hong Kong who spend larger-than-other-places sums on airline tickets. So I think what you're left with is a situation where CX will just continue to lump everyone together, OWE+F+DM and not make any differentiation.

I personally think CX should just do more to differentiate DM from OWE, as allowed under OW rules, in other ways. I don't think splitting up the lounges will work because a.) there are too many DMs, but b.) DMs spend too much money to discriminate against. (the last thing CX wants is DM passengers jumping ship and just buying Alaska miles and flying in CX F via partner awards....I know I've bought some last-minute Alaska F tickets on CX. So what went from my most-expensive purchase - last minute F - became one of my cheapest tickets. CX cannot want to encourage this dynamic).

Well QR already does it, and they do it just fine.

QR doesn't let their own top tier elites in either...

I heard another approach they are thinking are to not let people on award tickets in. Personally I think thats great if only to stop grAAbbers and grASbbers but it won't do against EXPs still...

I am fine (and do hope) they don't let partner emeralds in. Hey if you're that in for it you can always do what I did, switch and join MPC ;)

You mean CX are thinking that?

What % of pax in the F lounges are redeemers and will that make a material difference?

lounge earns 50 or so usd per visit. its a golden cashcow. Make no mistake, cx didnt invest in lounges out of philantropy for elites, rather it was case of money talks.

so it is not in cx interest to have lounge that limits cashflow.

one thing i am not sure is if CX charge 50 usd for each lounge visit or per guest / day... if they can build 3 nice lounges and the EXP membera hops on 3 lounge, thats 150 usd free cash. which is why i think CX invested so much in it

That's only if the EXP was flying on AA126/192 - which I don't disagree that it is a lot of revenue as there are quite a few OW flights out of HKG every day with lots of elites - two AA flights (~100 elites?), two BA flights (~100 or more), four QF, two JL, two QR, and the rest (RJ/UL etc). Suppose there are 500 partner elites and each visits 1.25 times on average that's a whopping HK$240,000 every day

I think it will make some difference if award ticket holders were banned - I'm sure there are quite a few people traveling on AM/BA awards regionally, let alone the grAAbbing and grASbbing gang. But not sure if CX will really be that bada** as no other airline seems to do this. Could be a great idea to entice people to ditch using miles and go for revenue tickets instead...

dont forget partner elites who fly cx in Y. for example i am QF plat but regionally sub 2hr for leisure i purposely fly cheapest econ... bkk flight i pay 2k hkd on N class but if i visit both wing/pier dont CX charge 50 usd x 2 to qanas? plus return segment visit BKK lounge... so nearly 150 usd lounge revenue (almost zero costl for ticket costing 275 usd..)

Count me in as one of the DM that will soon be downgraded to GO, but ironically moving down one tier from DM to GO allows me to be 3U Platinum member AND MU Gold member. I would of never dream of this scenario.

Think about it. I was trying my best to remain DM last year, and I've decided the hell with it this year. This year I settled at 600 points earned, and moved my F/C business to 3U and MU, and I made Platinum and Gold respectively fairly easily. Now I have OWS, Skyteam Elite Plus, and 3U Platinum. The "sky has opened" brightly for me. If Cathay didn't castrate their MPO program I would of never guess my flying patterns allows me to do this (too lazy to do the math).

Anyway, as for losing revenue on lounges. I would imagine the "upset" redemption gang would still find Cathay G16 or any of the Cathay C lounges way superior over against their own airline's lounges. I would not imagine a mass exodus of loss lounge revenue if Cathay does have the guts to limit Wing/Pier F.

So Cathay decided to be as nice as possible to non-Cathay members in fear of "upsetting" them, and somehow Cathay has no problem upsetting their long-time loyal F/C/premium-Y flyers and watch the real exodus?