The Israel Airports Authority (IAA) has issued a public tender for up to two licenses granting the right to manage and operate the five hospitality lounges in Terminal 3 at Ben Gurion International Airport.
Ben Gurion Airport’s VIP lounges
The tender was issued in preparation for the conclusion of the existing agreement with the company currently operating the VIP lounge system at the terminal – known as the Dan Lounge – which has been managed by Dan Hotels and QAS.
The VIP lounges are designated for the following passengers: first-class and business-class passengers traveling with participating airlines; members of select loyalty programs that grant access to the lounges; access for other passengers via a paid entry option (for those interested).
Tender conditions
The tender provides for an initial term of six years, with an option to extend the agreement for an additional 36 months. It also includes a planning and construction phase for the redesign and establishment of the lounges’ interior facilities, with the reopening scheduled for May 2025. Eligibility to participate in the tender is extended to local and international hotel chains, airlines and other entities with proven experience in the field.
The IAA stated that, in an effort to enhance passenger services, promote competition and increase operational flexibility, it has decided to permit up to two winners in this tender, as opposed to a single winner in previous tenders. This approach is intended to encourage participation from bidders across various sectors (including international lounge operators, international airlines and hospitality companies), facilitate a broader range of services and improve the overall experience for passengers.
The tender competition will encompass two areas: the lounges in Concourses E and B in the Departures Hall and the lounge in the eastern gallery of the Arrivals Hall (currently referred to as the Arbel Lounge), and the lounges in Concourse C and the smaller rotunda in the Departures Hall (currently referred to as the “Dan+ Lounge”). The tender will name two winners. The first winner, determined by submitting the highest financial bid, will be granted the first right to choose the area they wish to operate, provided their bid covers both areas.
The winning bidders will be required, within the scope of their license, to operate lounges for hosting airline passengers. The obligations include serving fresh and varied refreshments, providing office and communication services, and operating meeting rooms within the lounges to facilitate business meetings, as well as offering additional services tailored to such meetings. Additionally, the license includes an option to provide exclusive services in up to 50% of the lounge area. This exclusivity may be continuous or intermittent and will be available to passengers of specific airlines, at the discretion of the winning bidder.
The tender is open to local or international hotel chains that, at the time of bid submission, manage and operate at least five hospitality lounges in Israel or worldwide. It is also open to entities that independently manage and operate at least five hospitality lounges in airports in Israel and/or worldwide. Furthermore, airlines or airline alliances that, in addition to their core aviation operations, manage and operate at least five hospitality lounges in airports worldwide, are eligible to participate.
Notably, if an airline or airline alliance wins the tender, they will be required to allow paid access to the lounge for passengers who are not flying with the airline or alliance on their current flight. This access must also be extended to passengers of the relevant airline alliance, in accordance with international standards and practices.
Lounge market
According to the airport operator, the global airport lounge market has demonstrated robust growth and significant recovery since the Covid-19 pandemic. Moreover, substantial growth is forecast between 2024 and 2029, with projected revenues increasing from US$4.21bn in 2024 to US$9.44bn by 2029. This growth is attributed to the expanding middle class, the rise in international travel and the strengthening of partnerships between credit card companies and lounge operators, which currently account for approximately 45% of the market’s activity.
In related news, Schiphol recently opened its redeveloped lounge, which caters to intra-Europe travelers and now offers 20,000m2 of passenger area. Click here to read the full story.