If you’re super rich and famous, you may have heard of the Private Suite at LAX. If you haven’t, well, then you clearly aren’t rich and/or famous enough. United has just entered into a partnership that will allow the airline to offer its passengers access to this private terminal. The implementation is actually being done in a rather unique way. I might even call it clever. Even though I imagine demand will be very low, United could approach other partners that have a broader appeal in a similar way.
The Private Suite at LAX is a ridiculous splurge. You go to a separate terminal on the southern end of the airport, away from the passenger terminals. There, you get a private room there where you can relax, eat, sleep, etc. Here’s a photo from the Private Suite website:
When it comes time to fly, you go through security there, and then you’re whisked away in a BMW directly to your airplane. It sounds perfectly delightful, but it’s not cheap.
To be able to use the Private Suite, the website says you have to pay a $4,500 annual membership fee. (United says it’s $7,500 so either that’s a United typo or the rate has gone up.) Then each time you use the service, it’ll cost $2,700 for a domestic flight or $3,000 for an international one. That’s per direction. If you’re a guest of a member, you can use it for a mere $3,500 per domestic flight or $4,000 for an international flight. That’s a whole lot of money just to avoid a crowd.
If you’re a big star with a boatload of money, then I can see the value here since you can avoid all the paparazzi and have some peace and quiet. For everyone else, it’s hard to see how you can generate enough value to justify using the service. It’s really just for people with money to burn. Fortunately for the Private Suite, there are a lot of those people living in Los Angeles.
Some airlines already take good care of big Hollywood stars. Delta launched a service to escort them to a secret place off-airport upon arrival, for example. But United has instead decided it would be best to just partner with the Private Suite. That’s not necessarily a bad plan.
Travelers who are flying on paid premium cabin fares will be able to purchase access to the Private Suite without a membership if they’re traveling on all long-haul routes (London, Melbourne, Shanghai, Singapore, Sydney, and Tokyo) as well as flights to Newark and celebrity-friendly spots Aspen, Cabo, and all Hawaiian airports. The price of admission? It’s cheap at $1,250 plus tax for domestic travel or $1,495 for international.
Ok, so it’s not cheap. But if you’re a solo traveler, it’s far more reasonably-priced than the regular cost. (Since these prices are per person and the Private Suite’s are not, the comparison shifts quickly as you add people.)
Normally, this kind of partnership isn’t something I’d write about. After all, how many times have we seen an airline team up with some ancillary service provider? It’s not all that exciting. What I do find far more interesting is how United is going to sell this.
United is building the price of the Private Suite entrance into the ticket. For those who want to really get into the weeds, it’s a Q surcharge using a special passenger type (STE). That means that it’s effectively built into the fare, but it’s a fare that won’t automatically price unless you’re specifically looking for it. So there is no impact on your regular traveler at all. This kind of arrangement creates a lot of incentives.
- Filing it as part of the fare makes it very easy for a travel agent to sell. And many of the rich and famous folks who would be interested do use a travel agent.
- Travelers on corporate accounts who have generous travel policies that allow for premium cabin travel on longer haul flights may be able to get away with booking the fare that includes the Private Suite if it isn’t too outrageous. If it fits in the policy, then this is easy to clear since it just looks like airfare.
- Travel agents that have a commission agreement with United will be able to also earn commission on the sale of the Private Suite, so there’s incentive for agents to offer it up.
There are a couple of downsides here as well. Most notably, since it’s part of the fare, the fare rules determine whether you can cancel or change at all. The other downside is that having it included in the fare means it’ll be subject to the 7.5 percent tax on domestic flights. If it were a true ancillary service, it would be tax-free. I assume United has decided that the ease of booking makes it worth having it be taxable.
The idea of including services in the fare seems to go against what airlines have been trying to do over the last several years. But at least in this case, this is a wise way to make a product as easy to sell as possible.
