XHGZ

I have a friend, a successful small business owner who is recently talking this idea and ask my two cents. Well, I am not a frequent flyer, but I am writing this idea here for some ideas or two cents.

He is considering open one or two non-airline airport lounge on airport terminal in a middle size airport with 3-5 million annual traffic with no major (or less) airline lounge present on airport premise (like PVD, MDW or BDL). The lounge will be cost $25 per access. The major amenities will be normal as airline lounge: huge comfort chairs, nice view, light music, free WiFi, and business room for rent. He wants to add few more:

1. Fee shower facility (may be additional $5?)
2. $5 food credit included in general access (however, he want to set up his food with average price like $7, you need to pay additional $2 for food)
3. Special family room (for family with kids, avoid kids walking around lounge and disturbing other guests)
4. Relative long hours (maybe 6 to 10 or longer depend on latest flight that day)
5. Have an agreement with AMEX and Priority Pass for free ( or discount access for Priority Pass) access to their member (only) and discount price to their family or companion?

Would you pay $25 staying at these kind of lounges killing your waiting time?

Often1

Nothing new here. Airspace Lounges at BWI, CLE and JFK (T5) already exist

http://www.airspacelounge.com/about/

However, I don't think that your friend has done much in the way of a business plan if he thinks he can offer what he says he wants to offer at the costs he is proposing.

The ASL's are nice enough, but bare bones, hardly spacious and certainly don't provide showers and the like (think of the labor costs associated with that !).

Anyway, maybe there's a market for a competitor, but it's not a new product.

jdrtravel

They also cannot provide the high level of customer service from airline staff...one of the huge benefits of lounges. . .

bpe

Lounges have much more value at a hub or where there are lots of connecting flights with no alternative to waiting around in the terminal - most people wouldn't pay to visit a lounge at their home airport if the alternative is staying at home for free, with all the amenities a lounge would offer. Same is true even if one is staying at a hotel (perhaps without discounted food).

If it were at a larger hub airport, then maybe a lounge would be worth $25... but at hubs or otherwise busy airports there already are airline lounges.

XHGZ

I agree with you this is not a new market.

I mean with recent price raise and cut-off free credit card associated entry, is there any possible niche market for this?

bpnd

I recently flew WN to ABQ (DL has a really limited schedule to ABQ currently), and in both directions had long delays (~2-3 hours) at WN's "hub" in DAL. I might have paid $25 to enter a club there, had there been one. However, I don't know if WN's demographic would be consistent with the market for an airline lounge.

DaddyRabbit

These exist.

MSPeconomist

Do your homework. BDL has a US lounge. Also, it could cost more to collect the $2 for a food item than you gain. Would the lounge charge for beverages?

Also, PP has a standard guest policy, with any payments going through them. You can't collect $25 or whatever discounted price you set at the door for guests of PP members.

For a family room to work, you need to require that it actually be used by families with children.

NoStressHere

The chances of getting a bank loan would be low.
The cost could easily eat up $500k to open the door. Probably pushing a million. Rents from the airport would be rough.

Cold day in hell I would try to get into that business.

MSPeconomist

Some airports don't have lounges because there is no space for them. MDW is a major example.

pbarnette

Could? Sure, as anything is possible. In reality, though, it wouldn't. You are talking pennies per transaction.

As to the question... The idea won't work. The price is too low and your buddy is focusing on airports that are too small. The notion of showers at a small airport, especially, is silly.

MSPeconomist

It depends on how many people pay compared to the cost of hiring an employee for every shift to collect the money.

GUWonder

Sure, but that's when a passenger can buy a day/lounge pass and use that to get things fixed for herself/himself and the "whole party". And that will slow things down on the busier days since more manual payment processing takes more time.

pbarnette

No offense, but you have zero idea what you are talking about. There is absolutely no way that it costs $2 per transaction to collect cash. That is just crazy talk.

GUWonder

There is no need to require that. Even in lounges where there are designated children/family areas, the children/families have to go through the lounge and use the lounge even when using the family/children area. More often, those children/family areas are an oasis of calm compared to the rest of the lounge seating and eating area(s). If anything, it's the yapping adults on business trips who are most responsible for most of the noise in crowded lounges when I'm in them.

If anything, the designated children/family areas in lounges lead to overcrowding in the rest of the lounge.

The money collection costs are not the issue. Even inclusive of cash-handling costs -- and not all charges are made with physical cash in hands -- there are other, more substantial costs to consider.

Showers in airline lounges at small airports? Sounds more like a waste of space and an increase in lounge operating costs/problems. I don't see DL putting in showers at most of its lounges ever.