Why do Airlines charge a joining fee for Lounge Memberships?

[Duck]

Hi All,

Why do Airlines charge a joining fee for Lounge Memberships? It also should not matter if its a personal or corporate membership it just discourages passengers from using that airline. You would think especially in these difficult times for airlines they would not charge this high fee to gain some loyalty to their product?

 

[opusman]

I imagine a lot of people who pay to join an airline lounge are quite disappointed by what they get, and don't renew. So a joining fee lets the airlines make more money in the first year.

 

[Hvr]

Basically, because they can.

People feel committed once they've paid it and the renewal looks cheap compared to the first year fee plus joining fee.

 

[jb747]

Does it gain any loyalty at all? Or is it simply another ”service“ to be sold.

Personally, I think lounge access should be tied to the ticket you’re travelling on, with zero access below business class.

Que AFF explosion.

 

[Brissy1]

Does it gain any loyalty at all? Or is it simply another ”service“ to be sold.

Personally, I think lounge access should be tied to the ticket you’re travelling on, with zero access below business class.

Que AFF explosion.

and also exclude retired industry staff etc traveling on any ID50 or greater discount? Fuse lit.

 

[muppet]

Does it gain any loyalty at all? Or is it simply another ”service“ to be sold.

Personally, I think lounge access should be tied to the ticket you’re travelling on, with zero access below business class.

Que AFF explosion.

Except for pilots of course. ....

I suspect the infrequent flying QP members (which they are infrequent or they’d get free access) prop up the whole system with the huge fees they pay.

 

[jb747]

and also exclude retired industry staff etc traveling on any ID50 or greater discount? Fuse lit.

They already are. I have zero rights to the lounge, unless I buy a full fare ticket.

 

[33kft]

They already are. I have zero rights to the lounge, unless I buy a full fare ticket.

Not sure having no skin in the game makes for the best of perspectives? Also, the lounges are way less exclusive/valuable that they are made out to be, they're simply a convenience for passengers who pay more (*). If you were to exclude all those who get starry eyed about lounge access and only give it to the premium ticket holders, I can't imagine satisfaction would go up significantly, so what's the overall point?

* Not that those who gain lounge access via other means (QC members, status, etc aren't paying more, they're probably generating more margin than a single premium ticket is, which raises the question of why this is a better strategy than the current strategy).

 

[craven morehead]

Does it gain any loyalty at all? Or is it simply another ”service“ to be sold.

Personally, I think lounge access should be tied to the ticket you’re travelling on, with zero access below business class.

Que AFF explosion.

I'm not sure why I should be excluded from using the lounge when I fly 20 times a year from regional Qld on a Dash 8 where there is no business class offered. In saying that domestic lounges are not the holy grail and the food is very average, it's merely a place to work whilst in transit. International is a different story.

 

[Flying Fox]

I think its more about renewals.

The joining fee is an incentive to renew the following year as if you don't renew for a few months (ie. I'm not flying straight after the expiry date of my membership so I will not renew until I will be flying again) and then you decide to join up again, you are hit with the joining fee once more.

Therefore its 'cheaper' to pay the renewal fee vs joining fee & 1 year of membership.

 

[Duck]

Thank you all for your posts as it does seem more like a revenue grab than aything else. In my case I dont travel enought with one carrier to reach SG or even PS even though I travel every month and purchase seats by time and price. But if I had a lounge membership I feel I would be more likely to purchase a ticket with the airline I had the lounge membership with.

 

[moa999]

Pretty common with various club.
Notionally it goes to pay for the facilities, then the annual fee is more about the running costs.

It's just the model

 

[drron]

As a senior I only have to pay $6.60 for an annual membership to the Cowboys club in Townsville.Better than a QP too.

 

[Duck]

Time to travel to Townsville I think...

 

[Hvr]

I'm sure @trippin_the_rift can explain the rationale behind these charges.

 

[trippin_the_rift]

I'm sure @trippin_the_rift can explain the rationale behind these charges.

Why thank you for volunteering me to reply

Definitely it's to do with locking folks into the brand for the coming years.

Like - if Qantas shared the average membership length of paid Qantas Club, my guess is that's well over 3 years, and the average tenure of those who cancel within 5 years would be higher than 2 years. By having a joining fee (on any product - not just airline memberships), it has a few benefits:

• Member is 'buying-in' to the status, and thus, has a greater affinity toward the brand, and toward their newly purchased membership. They've passed the initiation and therefore feel like the membership has been 'earned'.
• Allows Qantas to use the joining fee as a carrot to attract in new business "oh we will waive the joining fee JUST FOR YOU........." Similar to a car salesman saying they'll give you $1000 off for buying today.
• Once you've paid for the membership, why would you ever consider flying with Virgin? After all, don't want to 'waste your membership'. So it creates a lock-in effect whereby you'll fly more with the airline. Also more likely to get the credit card......transfer points into the program......shop at woolies... you get the idea...
• When the renewal comes around, the idea of paying $xx_ as a joining fee in the future isn't desirable. Some folks will justify paying the renewal like this -- "well renewal is $400 (example) but the joining fee is $500 ... so I'm better off renewing than not paying it, then re-joining next year when I think I might fly more..." See the logic?
• Ego and social pressures "Oh, you're not in the Qantas Club? I bet you're too poor to fly Qantas as well." > Renew renew renew.

Contextually, now is a great time for AFF to insert an ad for corporate Qantas Club membership! Insert Ad here

 

[Duck]

Why thank you for volunteering me to reply

Definitely it's to do with locking folks into the brand for the coming years.

Like - if Qantas shared the average membership length of paid Qantas Club, my guess is that's well over 3 years, and the average tenure of those who cancel within 5 years would be higher than 2 years. By having a joining fee (on any product - not just airline memberships), it has a few benefits:

• Member is 'buying-in' to the status, and thus, has a greater affinity toward the brand, and toward their newly purchased membership. They've passed the initiation and therefore feel like the membership has been 'earned'.
• Allows Qantas to use the joining fee as a carrot to attract in new business "oh we will waive the joining fee JUST FOR YOU........." Similar to a car salesman saying they'll give you $1000 off for buying today.
• Once you've paid for the membership, why would you ever consider flying with Virgin? After all, don't want to 'waste your membership'. So it creates a lock-in effect whereby you'll fly more with the airline. Also more likely to get the credit card......transfer points into the program......shop at woolies... you get the idea...
• When the renewal comes around, the idea of paying $xx_ as a joining fee in the future isn't desirable. Some folks will justify paying the renewal like this -- "well renewal is $400 (example) but the joining fee is $500 ... so I'm better off renewing than not paying it, then re-joining next year when I think I might fly more..." See the logic?
• Ego and social pressures "Oh, you're not in the Qantas Club? I bet you're too poor to fly Qantas as well." > Renew renew renew.

Contextually, now is a great time for AFF to insert an ad for corporate Qantas Club membership! Insert Ad here

Great explanation trippin_the_rift, I agree with your comments. It will be interesting to see if this downturn in travel will see both Qantas and VA implement the "oh we will waive the joining fee JUST FOR YOU........." to stimulate future bookings for the airline