Luxury Lounge Wars Heat Up as Airlines Vie for High-End Passengers
Posted July 16, 2018 1:16 p.m. EDT
So you think your only choice during a long layover or a flight delay is to suffer in the airport terminal?
But be prepared to pay handsomely one way or another for the alternative.
The airline lounge competition is heating up around the globe, and two new entrants, American and United, have, somewhat belatedly, become serious contenders.
Like the difference between first-class and economy seats, the luxury lounges offered by many major airlines are yet another way in which air travel is separating the haves from the have-nots.
Entry usually requires the purchase of a business- or first-class ticket, and some VIP lounges charge thousands of dollars per visit by individuals or small groups of travelers. There are some exceptions for holders of certain credit cards, and occasionally a traveler can make a one-time visit for a relatively low fee.
But regardless of the cost, lounge access has become paramount for business travelers, especially those on overnight flights from the Northeastern United States to Europe, experts say. They want to shower and eat fresh food in the lounge, and then sleep on their flight, so when they arrive in Europe they can head directly to their meeting.
For other travelers, lounges can provide “a reprieve from the chaos of the airport, an oasis from the storm,” said Jack Ezon, president of New York-based Ovation Vacations, an upscale leisure travel agency.
To Michael Holtz, owner of SmartFlyer, another upscale travel agency, a lounge can extend a luxury hotel experience. Guests staying in certain high-end suites at the Rosewood London, for example, qualify for free access to the VIP private terminal at London’s Heathrow Airport. Qatar Airways’ Al Safwa first-class lounge at Hamad International Airport in Doha, Qatar, offers 12 private bedrooms.
American Airlines offers Flagship Lounge access to first- and business-class passengers on transcontinental and international flights and has opened new ones at John F. Kennedy International Airport in New York, Miami International Airport, Los Angeles International Airport and O’Hare International Airport outside of Chicago since last year. The lounges have hot and cold buffets, wine, Champagne and create-your-own cocktails, showers and quiet rooms. All lounges except O’Hare’s also have restaurant-style dining for first-class passengers.
United opened its first Polaris Lounge — available only to passengers flying in its Polaris, or business class, and to first-class passengers on Star Alliance airlines’ flights — at O’Hare in December 2016. Since spring, it has opened other lounges at San Francisco International Airport, Newark Liberty International Airport in New Jersey and George Bush Intercontinental Airport in Houston.
Other Polaris lounges are also planned in Los Angeles and at Washington Dulles International Airport. These will feature a restaurant offering local cuisine; relaxation areas, including daybeds with Saks Fifth Avenue bedding; and shower suites with valet service.
But American’s and United’s lounges are in many ways overshadowed by older and newer top-tier airport lounges operated by carriers based outside the United States.
Take for example Lufthansa’s First Class Terminal, which opened at Frankfurt Airport in 2004 and was refurbished in 2014, and Cathay Pacific Airways’ Pier first-class lounge at Hong Kong International Airport, which opened in 2001 and was refurbished in 2014.
And then there is Qantas’ Perth Transit Lounge, which opened in March for business-class flyers on the airline’s new 787-9 flights that originate in Melbourne, Australia, stop in Perth and continue nonstop for 17 hours to London; the lounge is also available on return flights from London.
The Perth lounge offers seasonal menus from Rockpool Bar & Grill, a Sydney restaurant; an outdoor barbecue and hydration station; bathrooms that provide light therapy and help travelers adjust to the time zone to which they are flying; and a well-being studio that has stretching and breathing classes conducted by a yoga teacher, also custom designed to combat jet lag.
Luxury lounges are also operated by the airline alliances. They are often at highly competitive hub airports and their costs are jointly shared by alliance members. The Star Alliance has seven lounges worldwide, with an eighth scheduled to open in Amsterdam early next year. The SkyTeam Airline Alliance has six worldwide, with new ones scheduled to open in Istanbul and Santiago, Chile, next year.
Since 2013, American Express has opened a Centurion Lounge at eight airports in the United States and in Hong Kong. New lounges are scheduled to open next year at New York’s JFK, Denver and Los Angeles airports. The lounges are only for holders of its Platinum and Centurion credit cards. These lounges offer menus designed by well-known chefs, shower suites, noise-buffering work spaces, family rooms and staff members who provide credit-card and concierge services. And for travelers in London who want privacy, there are suites available through the Heathrow VIP service. Originally used by members of the British royal family, heads of state and diplomats, 17 suites are available for business- and first-class passengers. Up to six travelers can buy a two-hour visit in a suite for 2,750 pounds, or about $3,600, which includes concierge and baggage handling services, food prepared by a Michelin-starred chef, private security clearance and transportation in a BMW 7 Series to the airplane. The car can also transfer travelers from London to the airport.
Los Angeles International Airport began offering its Private Suite service last year, modeled on Heathrow’s, priced at $3,500 per visit for up to three travelers flying domestically and $4,000 per visit for up to three travelers flying overseas. Fees are less for those buying a $4,500 annual membership.
Tyler Dikman, co-founder of LoungeBuddy, an app that rates airport lounges worldwide and sells travelers access to many of them, said elaborate lounges introduced by many carriers based outside the United States “raised the bar and have required U.S.-based airlines to compete if they want to maintain or grow their market share.”
Many carriers use their top-tier lounges as “an extension of their premium onboard experience,” promoting them on their websites, said Henry Harteveldt, a travel industry analyst and president of Atmosphere Research Group.
Indeed, Paul Priestman, director of PriestmanGoode, a London industrial design company that was hired by United to help develop Polaris, including its website and lounges, said his company’s concepts for the Polaris experience were designed to create consistency, which he called “everything in the travel experience. It’s what people remember. We try and make sure all touch points are similar, so the overall effect is calmer, and travelers enjoy the experience more, so they repeat, become regular.” American Express’ motives for entering the airport lounge business differ somewhat from the carriers’, experts say.
The credit-card issuer “knows it has high-value travelers and wants to be able to control its own destiny with a high-quality lounge experience,” Dikman said.
Equally significant, according to Harteveldt, is the reshuffling in recent years of airlines’ relationships with credit-card companies.
As a result of revisions in their credit-card partnerships, neither American nor United provides American Express cardholders access to their airport lounges. He called the establishment of Centurion Clubs a “defensive move” by American Express that he believed had paid off. These lounges have raised the bar, he said, “for all lounges, with an experience that’s closer to international business-class lounges.”
One challenge facing any airline, alliance or company aiming to expand existing lounges or open new ones could be space constraints, Harteveldt said, noting, “There is a limited amount of real estate, especially in older terminals, when the lounge concept was different.”
Priestman said he thought lounges might play an even greater role if airports became a destination for people who were not actually flying.
Visitors could shop in an airport’s duty-free store, go to the IMAX theater or nine-hole golf course at the Hong Kong airport or the Butterfly Garden at Singapore Changi Airport. “Lounges could become more like a reception area,” he said, “and if you spend more money, you could go into the VIP lounge and prolong your stay.”