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Why free airport lounge access is not so free anymore

Mon Jun 03 2024
airport loungescredit cardslounge accessbanking

Description

Airport lounge access, once exclusive, has become more accessible due to the increase in credit card issuance. Credit card companies offer free access to airport lounges as an attractive feature. However, the growing number of credit card holders and overuse of lounge access has become costly for banks. As a result, banks are taking steps to restrict lounge access for non-premium card holders and move towards spend-based access in the future.

Insights

Airport lounges used to be exclusive, but now they are accessible to more people due to the increase in credit card issuance.

The number of credit cards issued has nearly doubled in the last 5 years.

Banks pay around 800 rupees for domestic lounge access and 1500 rupees for international access.

The popularity of free lounge access has become costly for banks.

Banks are taking steps to restrict lounge access for non-premium credit card holders.

Access Bank removed free lounge access beyond immigration for non-premium card holders.

Top banks plan to move towards spend-based lounge access.

Banks hope to make lounges great again and reduce costs by implementing spend-based access.

Chapters

  1. The Rise of Airport Lounge Access
  2. The Cost of Lounge Access
  3. Restricting Lounge Access
  4. The Future of Lounge Access
Summary
Transcript

The Rise of Airport Lounge Access

00:04 - 01:51

  • Airport lounges used to be exclusive, but now they are accessible to more people due to the increase in credit card issuance.
  • Credit card companies offer free access to airport lounges as an attractive feature to sell more cards.
  • Last year, over 8 million people visited airport lounges.
  • Banks started setting up kiosks outside airport lounges to sell credit cards.
  • Access Bank, the fourth largest credit card issuer, stopped offering free lounge access for non-premium card holders.

The Cost of Lounge Access

02:33 - 04:43

  • Originally, card networks like Visa and MasterCard covered the cost of offering airport lounge access.
  • To provide a uniform experience, banks started bearing the cost themselves.
  • Domestic air traffic has increased, leading to more credit card holders using their lounge access benefits.
  • Banks pay around 800 rupees for domestic lounge access and 1500 rupees for international access.
  • The popularity of free lounge access has become costly for banks.

Restricting Lounge Access

04:43 - 08:18

  • Banks are taking steps to restrict lounge access for non-premium credit card holders.
  • Access Bank removed free lounge access beyond immigration for non-premium card holders.
  • Axis Bank increased and then reduced the number of free lounge accesses for non-premium card holders.
  • Banks want to rationalize lounge spend and eliminate freeloaders from their card base.

The Future of Lounge Access

08:19 - 08:58

  • Top banks plan to move towards spend-based lounge access.
  • Free lounge access will no longer be available, and conditions will be imposed.
  • ICICI Bank is hesitant to remove this feature entirely.
  • Banks hope to make lounges great again and reduce costs by implementing spend-based access.
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