Decline In Airport Lounge Visits Evident In India

EE News Desk Jun 13, 2024

During the first three quarters of the financial year 2024 (April to December 2023), the number of lounge visits showed an upward trend. However, from January to March 2024, there was a reduction of 0.2 million passengers (2 lakh).

Delving into the economics of lounge access in India and the trend of Indian banks scaling back on lounge privileges offered through their credit and debit cards, reports indicate a shift in the opposite direction.

Dreamfolks presents data on the decline in Lounge Visits

In the realm of lounge visits within India, one company that built its entire business around facilitating these visits was Dreamfolks. They positioned themselves as a platform capable of replacing Collinson, capitalising on the significant demand for airport lounge access in India in recent years. This access served as a key selling point for many banks, enticing customers to sign up for their credit cards.

However, since December 2023, numerous banks have transitioned to a spend-based model, tying lounge access to card usage rather than mere card activation. Banks have recognised the importance of customers actively using the card rather than simply acquiring it as a lifetime free card and letting it gather dust. This strategic shift is now beginning to yield results.

According to Dreamfolks Management in an investor call, the full impact of this reduction will only be apparent by the end of September 2024, when they anticipate the numbers to stabilize. The company, heavily reliant on Indian credit-based lounge access as its primary revenue generator, is now focusing on diversification to mitigate the impact of this change.

In summary, airport lounges may experience slightly less congestion over the next three months, as indicated by Dreamfolks, the manager of lounge access products for Indian banks. The first quarter of decline has already been reflected in their FY24 results.