Priority Pass Isn’t Cutting Ties With Alaska Lounges, But…

As I’ve written about in the past, Priority Pass members are increasingly reporting issues with accessing certain lounges. While it’s not the case at most lounges, some of the most popular ones are restricting access to Priority Pass members due to space constraints.

Priority-Pass-Space-Constraints

This is likely due to the huge increase in the number of people who have Priority Pass memberships, because of the increasing popularity of premium credit cards. For those of you not familiar, here’s how the Priority Pass business model works:

  • The credit card companies pay Priority Pass a fixed amount to grant Priority Pass memberships to their cardmembers. I’m not sure if the credit card companies are paying an average based on the number of people who actually activate the Priority Pass benefit, or if it’s based on the total number of cardmembers. Obviously they’re getting a massive discount on these memberships, given that a majority of people will likely never use them.
  • Priority Pass pays network lounges on a per visit basis. I don’t know the exact cost, but I’d guess it’s around $20 per person per visit. This is a great way for lounges to generate incremental revenue, as that’s above the marginal cost of lounges taking on an additional guest (if it weren’t, they wouldn’t be part of the network).

Priority-Pass

The problem is that lounges only have so much space. This issue has probably been most common at Alaska Lounges, where Priority Pass members report repeatedly being turned away because there’s no more room in the lounges. More often than not, there seems to be a sign outside Alaska Lounges indicating that the lounge isn’t available to Priority Pass members.

This is of course a very frustrating situation, though I don’t think anyone is directly at fault here:

  • The credit card companies are offering Priority Pass memberships to more people than ever before; at a vast majority of lounges the are no capacity issues
  • Priority Pass has been aggressive in adding new lounges, so they’re doing everything they can to get lounge access for as many people as possible
  • Lounges continue to have an incentive to let people in, as they’re getting paid for each visit; when they’re letting people into a lounge that’s already full, they’re doing a disservice to everyone

The only real way to “solve” many of these issues is to have lounges where crowding is commonly an issue removed from the Priority Pass network, so that they better manage expectations. The past couple of days it has been reported that the Alaska Lounge in Portland will be leaving the Priority Pass network as of May 1, 2017, and I’ve received several reader questions about that.

I wasn’t sure if this was true, and hadn’t seen it officially confirmed anywhere, so I decided to follow up with Alaska about this. Here’s what they had to say:

Due to the popularity of some of our lounge locations, we have had to enact temporary limits on certain types of passes, including Priority Pass. We are currently working with Priority Pass on a solution to alleviate space constraints. Once a plan has been agreed upon, Priority Pass will communicate any updates/changes through their communication channels. That said, we do expect that the opening of our new Seattle C Lounge, in June, will help to alleviate the need to restrict access in Seattle.

I specifically asked about the Portland lounge and it supposedly being removed from Priority Pass as of May 1 altogether, and they weren’t aware of such a change happening.

Alaska-Board-Room-LAX-02
Alaska Lounge Los Angeles

Bottom line

It doesn’t look like anything will be done immediately, though it is interesting that Alaska and Priority Pass are working on a solution here, or at a minimum, communicating.

Like I said, I’m not sure there’s really any “solution” here, other than them cutting ties, and I’m not sure that’s in anyone’s best interest. I suppose one idea that might help is to limit the number of guests each Priority Pass member can take. As it stands, Alaska Lounges limit Priority Pass members to bringing two guests, though maybe they could get rid of guesting entirely (though that would understandably frustrate families).

What do you guys think — are Alaska Lounges best off leaving Priority Pass so that expectations can better be managed, or would you rather just inconsistently have access to them?

Comments

  1. “I suppose they could work out some other arrangement, like limiting the number of guests each Priority Pass member can take, etc., but that would be the first time that something like that has been done.”

    That’s not true – CUN lounges limit access to one guest per PP cardholder, the KAL lounge in JFK is 2 per cardholder, and all of the Alaska lounges are limited to 2 guests per cardholder.

  2. There are basically no PP lounges in London Gatwick (the second busiest airport in the UK), because the advertised lounges refuse PP members most of the time, even in very off-peak times like 10am on a Wednesday in winter and I now avoid Gatwick for this purpose (never had any access issues with multiple visits to Heathrow, Stanstead, and Luton lounges). I blame the credit card issuers – there is only so much space at each airport for lounges and when CC companies are handing out free PP memberships like candy it affects the lounges ability to be able to deliver the advertised benefits.

  3. The Portland Alaska lounge constantly has a sign out excluding priority pass users, so as far as I’m concerned they already left the program.

  4. Ben, you repeatedly state that no one is to blame here. That is absolutely not the case! Priority Pass, whether directly or not, is selling a service to allow lounge access. When certain lounges in their network are routinely denying access, they are failing to live up to their end of the deal.

    While I agree that the blame should not only be directed at Priority Pass but the credit card companies also, there is plenty to go around.

    I have to admit that I am a bit confused as to why you take this defensive approach of the company. How you can say that it’s nobody’s fault when I have a card in hand, wait in line, and then I’m told that I can’t get into the lounge despite them letting others and at the same time?

    I have lost total faith in their business model and consider it a scam. It’s only a matter of time before somebody else does also and this ends up in the courts.

  5. @ AdamW — I don’t disagree with what you’re saying here to some extent, though let’s be practical. What’s the actual solution here that you propose? Would we all be happier if Alaska Lounges just pulled out of Priority Pass? It would certainly help with managing expectations.

  6. @ Heather — Well because some people are buying an Alaska lounge membership specifically, so it’s only fair that they get access to the lounges ahead of others.

  7. Limiting the number of guests seems like an obvious solution on paper, but how big impact would it have? How many PP holders bring guests with them? Based on my observations, most people enter lounges alone – or with one guest at most (which means limiting the guests to 1 or 2 would have no impact).

    Don’t get me wrong, I do support limiting the number of guests, but I am not sure it’s a solution to the problem.

  8. Auto play video ads? Are you kidding me Lucky? I knownyou have to pay the bills but that is low…

  9. Alaska lounge has been closed to Priority Pass members in Seattle the last four times I flew through Seattle. Last time, I arrived at 6:15 am. The sign seems to be out regardless of capacity. I fly almost exclusively with Alaska, since I live in the NW. I see the Priority Pass as zero value for myself.

  10. Maybe the issue is why Alaska lounges are so crowded. Just my .02, but they provide the best Us-based carrier lounges (sans American Flagship lounges). Craft beer on tap, slightly better then average snacks, and fresh pancakes in the morning.

    If other lounges could compete like that, maybe others wouldn’t go out of their way (like me) to visit those lounges.

  11. @AdamW The problem seems to be that you believe a Priority Pass is guaranteed access into the lounges at any time. That just isn’t the case. The conditions that Ben pointed to tell you that you may be denied access because of space constraints. If you want to always be able to get into a lounge then buy membership in each lounge. PP is a vastly discounted pass and therefore comes with restrictions. You can’t have your cake and eat it too.

    I have three priority passes and a paid membership to Alaska Lounge. It should always be the case that paid members get in before Priority Pass members.

  12. I’ve been in some really crowded Alaska lounges prior to the CSR coming to market. I can’t even imagine how they look now with all the CSR’s out. This is one case where I would like Alaska to remove the Priority Pass access to their lounges. It doesn’t make sense to bloat the lounges with folks not flying Alaska.

  13. When a company offers you goods or services in exchange for payment they have an obligation to deliver those goods and services in accordance with the agreed upon terms. PP agreed to provide access to clubs. At some point they added the proviso that clubs may be unavailable. If that occurs 1% of the time then the company is delivering on its promise. On the other hand if it occurs 99% of the time they are not. Where between those two the line is where they are failing to provide what they said is the issue.

    An exceptional event would be Ok. Every day or weekdays, between certain hours would not.

    The problem isn’t the absolute level of access but the difference between what has been promised and what is being delivered. One of the two has to change because as it stands I think PP is in breach of its obligations.

  14. @Lucky, I think the answer is that the Priority Pass business model is essentially a scam; therefore, they should not be used in existence. I know that I am being a bit dramatic; however, what other businesses do you know of that can sell a stated service then routinely fail to deliver.

    It is not just the Alaskan Airlines lounges but the KLM Lounge in Houston along with many others. I personally have been denied entry more times than not over the last year, yet I am sure that Priority Pass is continuing to get their money. A lot of lounges have produced permanent, professional grade signs stating that they are not allowing Priority Pass members into the lounge. This does not seem like a temporary overflow issue to me.

    I will state this again, how can a company collect money for a service offered and then routinely not offer that service?

  15. i had the same experience at the Alaska lounge in Seattle. i fly out of Seattle very frequently say like 4-5 times a month, i have never been allowed in Alaska lounge even once with Priority Pass. this has been my experience for the last almost 1 year.

    i agree with AdamW this is a scam, they promise a service which they are not delivering & taking money for it.

  16. @ AdamW — I agree there are certain lounges where this is an issue, but I think we can probably agree that it’s maybe a dozen lounges where this is consistently an issue. These are also probably the lounges that are among the most frequently used by Priority Pass members. So if Priority Pass eliminated those dozen lounges from their network, and still had 1,000 plus lounges without capacity issues, would you consider this to not be a scam?

  17. I think Priority Pass should let the contract lounges know they need to have clearly visible signs if they’re limiting access to certain hours or are at capacity for card members. Just last week a couple in front of me argued with a front desk person complaining loudly about being ripped off and false advertising.

  18. As a Europe and Asia based traveller, I’ve never once had any issue remotely similar to this with a Priority Pass lounge. Seems the issue here really is about the specific lounges where these complaints have come from; an issue those lounges and Priority Pass need to sort out quickly.

  19. I suspect that the solution will involve a co-pay for PP members at some lounges. Which would be annoying, but would probably instantly cure the problem

  20. We could be seeing the solution from PP with the launch of the us bank reserve. From what I’ve heard only the first 4 visits will be free. After that a copay. Won’t necessarily help with those of us with 3 and 4 memberships but could help.

  21. Why don’t these airports with clubs limiting access just increase capacity? PDX for example – one tiny Alaska lounge and a lame UA lounge. If the demand is there…? How about some independent non airline lounges like all over the rest of the world Build it – and they will come.

  22. Priority Pass used to have some value domestically, but its total garbage in the US. If I am flying internationally I usually get lounge access anyways, so PP doesnt have much value. If every premium credit card is offering PP how can it be a perk anymore????

    I wonder if any of the CC companies are going to catch on and make a change.

    The Altitude card is limiting PP visits to 4 times a year. I wonder if something similar will happen across the board.

  23. @Lucky how about Priority Pass giving you a $10 gift card/voucher/credit to use for food & beverage purchase in the airport if you send them proof of denial from an in-network lounge (e.g. timestamped picture of the sign in Portland AS BR)? Seems to me to be a reasonable solution: if it’s a lounge where it’s really “so rare” that people get turned away, this won’t impact their bottom line (i.e. they’re getting $20 a pop most of the time, and in the rare case that someone gets denied, they’ll comp them $10). If it’s happening so much that they’re losing significant chunks of money from it (i.e. comping more than they’re generating from lounge admission), then simply remove it from the network to avoid getting people’s hopes up so much.

  24. If you manage expectations properly, people aren’t disappointed.

    I say cut ties if you cannot accommodate the leap in numbers for the Priority Pass membership.

  25. Lucky, also a data point:
    I was at the LAX boardroom on Sunday, was told that their policy is max 2 guests. But the agent was extremely nice in letting my whole group in. She turned away everyone else who came after us

  26. I think if PP wants to remain viable it either has to cut ties with airlines like Alaska that don’t have enough space (their lounges are crowded esp at Sea-Tac) or seriously restrict the number of passes either by quota or raising the price. Lounges used to be reserved for a few high end business travelers, and honestly there isn’t enough space to go around for a mass market, that’s just s a fact of life. We can’t all get a business class seat on a plane either.

  27. One of the main reasons we’ve got the Citi Prestige cards(2of them), was the access to lounges while traveling, but starting around Christmas time 2016 we’ve been turned away from lounges a fair amount of times, including new (sudden ) hour restrictions at lounges in LAX ,SFO, PDX, places we travel often to and from. When we signed up for the card, the perk was pretty well defined and made attractive for new users like us, there was no hint of trouble getting access to lounges- and for a while it held true. And it was a great point on why to spend $450 ( $900 for two of us) a year for the cards. I guess with this perk becoming SO IFFY at best, i’d rather avoid the embarrassment of being turned away at the counter and say Bye to otherwise a good card. I’m not saying the card is not valuable, it is, but nowhere close to $450/yr even with the $250 credit for flying related expenses

  28. While not entirely Priority Pass’ fault, I think it’s fair to assign the majority of the blame to them. They are, after all, serving as (and making money as) the middleman between airlines/lounges and credit card issuers. In a way, PP is like Groupon (which packages and sells bulk/discounted access to restaurants, etc.) If one restaurant won’t honor a Groupon, it’s probably the restaurant’s fault. But if it happens at a lot of restaurants I’d say it’s Groupon’s problem. Same thing holds for Priority Pass, they bear a large responsibility to see that customers get what is advertised. If/when an airline lounge (e.g. Alaska) denies a majority of PP card holders, it should be removed from the list of PP lounges.

    Luckily for Priority Pass, their customer isn’t really the card holder, but the credit card issuer (so there is no real fear of losing revenue when PP “members” can’t access an airline lounge).

  29. To add to the above, it might be better for all credit cards/issuers (Amex Platinum, Chase Sapphire Reserve, etc.) to drop Priority Pass as a benefit. Instead, they could offer partial (50%, 75% or even 90%) reimbursement to their card holders for purchasing individual memberships. Like the Global Entry fee credit, those folks who fly/travel a lot will be inclined to use the benefit, while the rest of folks won’t. If card holders have to purchase individual memberships, they will hold Priority Pass accountable for whatever lounges are listed in the network, but for which they are denied access to.

  30. Another thing with Alaska is they’re one of the few (or maybe only?) US airlines that provides complimentary lounge access to domestic first class travelers, regardless of status or membership. One of them is also the only centrally-located PP lounge at SeaTac. There are 3 other lounges available to Priority Pass at SEA, but they’re located at the very end of the A terminal, and in the two satellites. The Delta and Amex lounges are pretty central as well, but have more access restrictions, so I suspect that’s why the main Alaska lounge gets so crowded. That being said, I was at the Amex lounge for the first time on Friday afternoon and found it be more crowded than I’ve ever seen the Alaska lounges..

  31. I was at PDX last week and I noticed the same sign outside the Alaska lounge. With no intention of using the lounge began with since my flight was boarding soon, I did took a quick look and the lounge barely had anyone in there. This was around 08:30 PM. I guess the lounge just doesn’t like Priority Pass members lolz.

  32. The last time I flew through Seattle, the sign was out but the lounge looked empty, so I went inside and asked if that was still in effect. The woman said she had just forgotten to bring it back in and that I could come in. This was around 9pm. I think a lot of flights had just taken off. Also, the lounge at PDX is TEENY, so I’m not surprised at that one. I think I’ve just always gotten really lucky to be flying at off times, because I haven’t been turned away yet.

  33. I received confirmation from an Alaska rep on Twitter that the PDX lounge is indeed closing to Priority Pass Select effective May 1st.

  34. If I had a full paid membership to Priority Pass instead of it being a credit card perk, I’d be pissed. BUT, I don’t as I get mine through my CSR. I view it as Priority Pass probably intends — this is the lounge version of a standby airline ticket.

    Domestically, the lounge situation is abysmal, and not just for Priority Pass holders. We’ve all seen many stories about Centurion lounge overcrowding, and even see it with DL, AA, UA clubs. Even without access/overcrowding issues, domestic US lounges are a far cry from their overseas counterparts. In some cases, the public terminal is nicer than the lounge.

    As far as fixing the situation, I wish everyone involved luck. Airports are designed to move aircraft. Terminal design from a passenger perspective has been sorely neglected for the past 30 or so years. Building more lounges is the obvious solution, but due to all of the red tape and corruption involved with many airports, this won’t happen.

    FWIW, Gatwick’s Priority Pass lounges are all run by the No. 1 group. They have a co-pay reservation system set up for Priority Pass members which guarantees you a spot, £5 per head, which includes expedited security. While I don’t like the idea of ‘paying’ for something which I’ve already ‘paid’ for, £5 is reasonable to me, and that’s what the cost of premium security at LGW is by itself, so I’m still getting into the lounge “free”.

  35. I couldn’t get in last time I was at the Alaska Lounge in PDX. I asked if it mattered that I was Alaska Gold, and flying that day on Alaska… Nope. It didn’t. But they offered to sell me an Alaska lounge annual membership.

  36. I was at LAX on 4/21/17 and checked the Priority Pass site to find my lounge options. I saw that both the Air Canada and Virgin lounges are closing in mid-May, per a notice on the website. And of course the Alaska lounge had their mostly permanent “lounge full” sign out. So basically just 1 lounge at LAX now?

    Thanks for looking into these issues. Hopefully changes are in the works soon.

  37. @MarkB – LAX is doing some terminal swapping with several airlines are being shuffled around (including Delta, Virgin America and others). This is happening in the May timeframe, so several lounges will probably swap owners and relocate to new terminals. It could be that the lounges may take the opportunity to opt out of PP at that time.

  38. @DavidS
    I thought about that as the timing does seem to correspond with the terminal swaps. But then why wouldn’t the Priority Pass people (with all the known issues right now) not say the lounges are relocating or “new lounges will be announced soon”, rather then just say these two are closing and leave it at that. Seems just saying they are closing creates undue frustration and unnecessary negative emotion toward Priority Pass. Purhaps I expect too much from whoever updates their website or makes the announcements at Priority Pass.
    Or maybe they are closing as clearly stated on the site.

  39. Adam W I don’t believe PP started out as a scam. Since the cost of running a lounge is essentially all fixed cost the airlines saw it as a way of picking up essentially pure profit for what was at that point an underutilized asset. So they agreed to see access at what was likely a steep discount.

    PP on the other hand had a model for how many people would use the lounges and how often. They probably assumed not many and not very much so their profit in the spread between what they paid out per visit and what they charged for a per head/per year fee.

    Selling unused capacity at a discount is a common undertaking. If this sounds familiar think frequent flyer programs a la 1978. You convert something that is essentially worthless (an airline seat the moment after the plane door closes or an unused seat into a lounge) into cash.

    Unfortunately just like frequent flyer programs their model was wrong. People are using the lounges way more than they expected (with airline miles there was a point where three round trips at $198 round trip earned enough miles for a first class round trip anywhere in the world and an upgrade from the cheapest coach to first class with no capacity controls). Not surprising. Any economist will tell you if something is free people tend to increase the amount of it they consume.

    Assuming that the model is profitable, no sure thing, the solution is to either increase capacity (more lounges), decrease demand (more restrictive access of some sort) or both. Since increasing capacity takes time and only works if cash in to PP is > cash out the only short term fix is to decrease demand. Currently that’s happening by slamming the door shut. The problem with that is it almost certainly puts PP in the position of having to explain why they aren’t a scam i.e. selling a product they know they have no intention of delivering.

    We’ll see how this all works out but keep in mind that it isn’t just PP who is in the hot seat. The lounges are complicit. So long as they remain part of the program but hang signs out saying you can’t come in they also have liability and their pockets are almost certainly far deeper than PP.

    While I’m sure they can afford whatever possible legal action comes of this, if any, the hit to their reputation could be far greater.

    Alaska are you listening?

  40. This last week my priority pass was rejected at the Alaska lounge at LAX and at the Air France/KLM lounge at Dulles. We were not able to use a lounge in la but the sky team lounge acccepted Priority Pass 9n Dulles. Also I was flying business first and found out that you can no longer use the lounges on domestic flights. That was distressing.

  41. ### IF YOU HAVE BEEN REJECTED FROM A PRIORITY PASS LOUNGE ###

    Call or e-mail Priority Pass to let them know. And if you cancel an Amex Platinum or CSR card, mention Priority Pass as one of the reasons you are cancelling. Commenting on these blogs may give you an opportunity to vent, but it won’t matter unless PP and your credit card issuer know these incidents are making customers unhappy.

  42. I’ve been disappointed with the overly-crowded Priority Pass lounges and in the major airports in Asia (Hong Kong, Seoul, Singapore, and Tokyo). It’s almost more attractive to just hang out in the terminal where it is less crowded. I haven’t experienced this problem domestically in the States though.

  43. @AdamW, it’s not a “scam”. You are imagining it to be a reserved ticket to the lounges, when in fact it’s a space-available pass, by its terms. Like any space-available pass, its value declines as the space is less available.

    Should the credit cards that tout it as a benefit make that clearer? Perhaps. But the terms are clear. Explaining those terms and their effects on travelers is a role played by this blog, among others. Now that you better understand the terms, will you choose not to renew your Reserve card?

  44. I just tried to use my PP from CSR to access the Alaska lounge at PDX…as I have always done…and my guest was denied entry. Usually, when the lounge is at/near capacity, the staff at this lounge would just put the sign out saying they aren’t accepting PP at this time. Now they are just flat out denying guests…even though there is plenty of room in the lounge right now.

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