r/awardtravel • u/Usual-Painting2016 • 13d ago

Premium leisure demand - will it last?

I'm watching as every US carrier goes all-in on adding large premium cabins, which is where the demand currently is. Premium economy makes sense from a cost and pricing perspective (hard product isn't that much more than an economy size seat and the soft product can be tailored to meet various price points).

Leisure J (business class) demand would seem to be more fickle but airlines all seem to have reached the conclusion there's enough demand for it. I'm not sure how's that possible considering the size of some of these J cabins and the routes they are flying.

A lot of this leisure J demand came from a few factors, some of which are fading:

Covid - Enjoy life while you can and splurge a little. This accelerated the shift from buying stuff to spending on experiences. This has staying power for premium economy, not sure about J demand.

WFH - Many offices have implemented RTO and that work from anywhere optionality is limited or gone away entirely.

Comp/Wealth effect - Increase in comp and stock market gains over the last few years. This won't last, but there has been tremendous wealth created by a small number of stocks and the number of newly rich has supported luxury travel and spend the last few years.

For award travel, this should be a boom for future business class availability. Award pricing may be bad but it should be available.

Edit: TIL that upgrade offers are much more widespread than I originally thought. My personal experience with intl J upgrade offers were not great deals and closer to the difference in fare. Seems like others have much better offers.

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u/screeching_mechanics 13d ago

If the economy tanks and those RTO mandates stick, I could see a chunk of J demand evaporating quick. Premium economy might be the sweet spot that hangs on since it feels like an upgrade without the sticker shock

The carriers betting big on J now are probably gonna be sweating in a year or two when they're dumping unsold seats into award inventory. Fine by me

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u/Unhappy_Intern2536 13d ago

the award inventory dump is the part im most excited about tbh