Delta is putting some real investment into its lounges, which is great to see. I still think the American Express Centurion lounges are far better (especially the food) but so does everyone else and they can be crowded at times.
American Express Centurion Lounge Miami
Still, Delta is doing more than American and United currently in the space. For instance, their new San Francisco lounge has a celebrity chef (many of the dishes are charged, rather than complimentary) and looks gorgeous.
Delta Skyclub San Francisco
As Delta has invested in lounges, they’ve also raised price. They raised the full membership fee to $695 a year and started charging a $29 fee to those with more basic membership and who obtain their lounge access via a credit card (American Express Platinum or Centurion, Delta Reserve). Put another way, they’re reducing overcrowding by keeping out your spouse.
Lounge Day Passes are an Anomaly
On the one hand if you want to reduce overcrowding, you shouldn’t sell day passes at all. American Express does not sell passes for the small Centurion Studio in Seattle to its members that do not have a Platinum or Centurion card.
On the other hand, they’re a source of revenue. But if they’re a source of revenue, airlines would likely charge less rather than more for them.
Many airlines sell lounge access at a discount through programs like Priority Pass (or Lounge Club).
Airlines have learned that if they price domestic premium cabins at a modest increment over economy, people buy the seats and they make more money (and upgrades become harder to come by). Charging 4 or 6 times the price of coach for a first class seat wasn’t revenue maximizing back when only about 10% of domestic first class seats were paid for. By reducing the price they do a better job monetizing the product.
An average day or single visit pass from a US airline will cost $50. At that price, very few people buy them. Most lounges are a (somewhat) quieter place to sit and work with free wifi separate from what’s offered in the terminal and usually cleaner bathrooms as well — plus frequently assistance with reservations in the event of irregular operations.
Complimentary booze is usually of the rail variety, with decent food and drink charged at a premium if available at all.
I’ve always thought airlines would make more at $25 than $50, but that would mean more people in the lounges.
Delta is Increasing the Price of their Lounge Passes
Lucky reports the price has gone from $50 to $59. If they were trying to reduce crowding by making it seem more expensive, they’d likely have gone to $60. You choose a final digit of ‘9’ when you want something to seem less (the price feels more like $50 than $60). The idea of the 9 is presumably not to scare customers away from buying the pass and entering the lounge.
Delta has tried the inexpensive route and since they’re trying to make it seem like they haven’t raised pricing much they must be trying to maximize revenue — they must believe enough people buy will buy at $59 that they’ll make more money than they would pricing passes at $25.
Where Delta really imposes a cut though is in how useful the passes are. They have made passes all single visit. There are no more ‘day passes’ which would allow you to use more than one club in a single day. No more visiting a club in your departure city and in the hub where you connect with a single pass.
And when you compare pricing of single visit passes the change is far more dramatic. Laptop Travel explains,
Delta has begun the policy of selling and issuing single visit passes, meaning they’re only valid at one lounge for one entry. So, a purchaser may not visit another SkyClub in another airport, or even the same airport for that matter in the same day. One pass, One lounge. The Day Pass, as most knew it, has been eliminated and replaced by the SkyClub Single Visit Pass. The single pass most recently cost $29, increased late last year from $25. Now access will cost $59.
US Airlines Didn’t Used to Charge for Lounge Access at All
It’s an historical anomaly that US lounges charge for access at all. In general airlines around the world (outside Australia/New Zealand) do not charge for access. It’s provided free to premium cabin and elite customers.
In the US, airlines charge even elite frequent flyers traveling domestically for access. From the time American opened the first airport lounge up through 1974 they didn’t. However the federal government ordered – on anti-discrimination grounds – that airlines either make clubs available to everyone, make clubs available to everyone flying a particular class of service, or make clubs available to everyone who pays.
Paid memberships were a way of ensuring compliance with non-discrimination rules coming out of the civil rights era. Anyone who could pay – regardless of race – could access the lounges.
Once the airlines had a revenue stream associated with the lounges it became difficult to walk away from that. The lounge network starts looking like a separate business unit, with its own profit and loss calculation.
International Airlines Offer So Much More
The private cabanas of Cathay Pacific’s The Wing lounge in Hong Kong are gorgeous.
The architecture of the Qantas first class lounge in Sydney is impressive.
The dining, by celebrity chef Neil Perry, is fantastic as well.
And though complimentary spa treatments are only 20 minutes there, they’re out of this world good.
I can access both of these lounges as an American Airlines Executive Platinum. The top tier elites of these airlines can use their first class lounges as well, regardless of class of service flown.
Yet somehow it seems strange to pay hundreds of dollars for this compared to what is bundled with status elsewhere in the world.
American Airlines Admirals Club Austin