Pricing the Airport Lounge
The Prompt
Your client operates a 200-seat premium lounge in a major Indian airport's domestic terminal. Today 80% of guests enter free via credit-card programmes that reimburse the lounge ₹650 per visit. The operator wants to launch walk-in paid access and asks: what should the price be?
Structure & Hypothesis
Analysis & Data
Give me a number, and deal with the 95% peak problem.
Headline price ₹1,399 — top of the competitor band, justified by showers and à-la-carte dining, comfortably above the ₹650 contract reference. But at peak banks the lounge is nearly full of card guests, so walk-ins would degrade the experience that justifies ₹650. So: walk-in sales are off-peak only by default, via a slot-based app purchase. At peak, either close walk-ins or price at ₹1,999 with a guaranteed-seat promise, capped at, say, 15 passes per bank.
Time-based segmentation falls straight out of the occupancy data — price isn't one number, it's a policy.
Estimate the annual walk-in revenue at your prices. Assume 25 off-peak walk-ins/day and 20 peak passes/day sell.
25 × ₹1,399 ≈ ₹35,000/day off-peak; 20 × ₹1,999 ≈ ₹40,000/day peak — ~₹75,000/day, ~₹2.7 crore/year. Variable cost ≈ 45 guests × ₹280 ≈ ₹12,600/day, so ~₹2.3 crore incremental contribution. Modest but nearly pure margin on existing fixed costs — and zero risk to the ₹650 book since both prices sit far above it.
Recommendation
Recommend
- Launch walk-in at ₹1,399 off-peak (app-based, slot-limited) and ₹1,999 guaranteed-seat at peak, capped per bank.
- Never discount below ~₹1,100 publicly — the visible walk-in price is the card networks' next negotiating anchor; protect it.
- Bundle experiments upward, not downward: +₹400 shower add-on, +₹600 meal upgrade — lifts realized value without touching the headline.
- Review after one quarter against two metrics: pass sell-through and card-guest satisfaction scores at peak.
Key Takeaway
What this case teaches
Build the band — floor, reference, ceiling — but always ask who else sees this price. When an existing B2B contract references your public price, that contract becomes the real floor, and segmentation by time becomes how you serve new demand without breaking the old book.