CLEAR is a membership service that vets members to provide expedited security lines at airports and event centers. They have had limited growth, but if they followed the lead of lounge membership company, Priority Pass, perhaps they could scale to offer more value for their members.
CLEAR Is Not Valuable To Me, Others
I have used CLEAR in the past and from time-to-time and for a period it held some value to me. However, at $99-179/year without Delta status that includes the service places the cost at $8.25-$14.92/month. While that seems inexpensive on a monthly basis but spending all at once seems pricey if your airport does not offer CLEAR.
Further, CLEAR’s footprint is improving but is far from adequate (much like Hyatt). While some airports offer broad coverage like LAX which has checkpoints at Terminals 1-7, they fail to serve many others entirely not to mention conveniently.
Of the 30 busiest airports in the country CLEAR fails to cover the following airports:
- #3 Chicago (O’Hare)
- #10 Charlotte
- #12 Phoenix (Just opened this week)
- #14 Newark
- #16 Boston
- #19 Philadelphia
- #21 Fort Lauderdale
- #25 Chicago Midway
- #27 San Diego
- #28 Honolulu
- #29 Tampa
- #30 Portland
While that list looks a lot smaller than you might have predicted, keep in mind that at airports like DFW you will need to arrive at Terminal E, use the CLEAR lane then get to the train and transfer to whatever Terminal from which you are departing. The same at Houston (Terminal A one side not the other), Miami (Terminal E/H) and others.
I have flown more than 60 segments so far in 2018. My departure airport is PIT and while I do fly frequently to some of the CLEAR airports, their limited facilities reduce its usefulness to me. Any time I gain by using their service is lost once I transfer terminals. That’s not valuable to me, at least, not at the current price point and as long as I also hold TSA PreCheck (a must-have for any road warrior). It seems that a lot of American travelers agree which is why their rollout has been limited.
It should be noted that some event centers and stadiums have also been added in those cities as well.
CLEAR’s Chicken and Egg
The problem with CLEAR has always been that of the chicken and the egg. Customers will see value when they either trial the service and breeze past long security lines, or when they are stuck in those lines and watch others do so. But it’s difficult and expensive to add a bunch of locations and staff without customers, and likewise, customers won’t sign on and pay for a service that has limited use.
Unlike tech companies that have a culture of selling the future and raising money to cover losses until they achieve mass adoption, that doesn’t seem like a tangible option for CLEAR. The company tried that model and it didn’t work initially but they have made some progress since those struggles.
Priority Pass Improved Their Value Proposition
Priority Pass had a similar problem of securing lounges and customers for awhile and found a way to overcome it. A few years ago the program had just 400 lounges worldwide which may seem like a lot but in practice left major airports without any option for would-be customers. In the last few years, that number has ballooned to 1,200 lounges (as it stands today) which has brought lounges to third-tier cities instead of just major international hubs.
The lounge membership has added alternative venue types. Minute Suites (think hour-by-hour nap rooms inside the airport) and restaurants so they can grow in markets where they may have otherwise been limited. For example, Denver has several airline lounges and AMEX is adding a Centurion lounge, but lounge space is expensive. Where Priority Pass can’t secure a lounge they can add existing restaurants much faster than waiting for third-parties to build-out space. I’d like to see further enhancements in places like train stations, malls with nail/massage locations. If I could use Priority Pass to get a shoulder massage at the mall while my wife shops that would add real value to me. If my wife could get a pedicure while I shop for drones at Best Buy she may treat my daughter to nail painting at the same time adding value to our membership and revenue to the venue.
What Does CLEAR Need To Do?
One of the ways Priority Pass accomplished their growth was through credit card companies and bank partnerships. Years ago when my wife and I lived in England, we held a premium bank account (to avoid the incredibly long lines during their limited hours) and with that came a Priority Pass membership. Most premium credit cards add the offering to their benefits including the two I discussed that should part of any Road Warrior’s must-haves. While Priority Pass undoubtedly offers banks a cheaper price for their bulk business than retail prices offered direct to consumers, there’s no doubt that bank partnerships fueled their growth.
- CLEAR should work with banks and credit card companies to add their membership at a discounted rate to premium credit card offerings.
Priority Pass allows their members to bring guests in limited numbers and add-on additional guests for a fee. Some lounge memberships allow guests to join their members. While plenty of road warriors travel alone, when traveling with co-workers, family or friends, they want to be able to bring those travelers with them into the lounge. It adds value to the member and value to the program. Offering additional guests for a fee (under $30/person/visit) adds incremental revenue to Priority Pass and incremental value to members as it does not exclude members from deriving value when traveling with more travelers than normal. Few Priority Pass members would part with their traveling companions to enter a lounge by themselves while their friends and family head to the airport Chili’s.
- CLEAR should allow a free number of guests visits per year (perhaps five annually) and sell additional passes either individually or packs of 3, 6, 12.
Priority Pass began innovating last year by partnering with airport restaurants to offer a fixed-dollar credit to members. I personally tried Denver’s Timberline steakhouse with my wife and daughter, Matthew tried the benefit at an LAX restaurant. We wouldn’t have tried the Timberline without the credit, but once we did we spent above and beyond the credit. That’s good for the restaurant and for Priority Pass as it will encourage restaurants to stay in the program keeping members like me engaged in the brand. CLEAR has done some innovation in some sports arenas in cities where they already have an airport placement. If you don’t have season tickets to the event center offered, there is little to no value to you as a member. In Denver, for example, if you have season tickets to the Rockies you can enjoy CLEAR at Coors Field. But if you have season tickets to the Broncos or Nuggets you are out of luck.
Perhaps CLEAR could expand further. Take Orlando for example, if I could use CLEAR to move to the front of the line (not just in security but also park entrance) at Disney, Universal or other theme parks that would add real value to me. The same could work by partnering with Six Flags which have locations across the US.
- CLEAR should expand to other venues including theme parks where long security and entry lines degrade the customer experience.
CLEAR could sell limited packages for lesser amounts retaining higher per visit revenue. If you fly out of Denver six times per year, $179/year or $20/visit is probably not worth it to jump to the front of the TSA PreCheck line. Road warriors that fly every week wouldn’t think twice about adding it to their travel toolbox. If CLEAR sold a package of six passes for $39, they may be able to grow their market or convert those customers to full members. There is also an option to sell event-only or airport-only packages. The annual pass holder for theme parks in cities that host them may not fly enough to justify the expense, but they may pay for an expedited CLEAR experience to further streamline their park experience. Similarly, I rarely visit theme parks and don’t hold season sports tickets so I won’t gain any value from their expedited lines, sell me a cheaper package that only offers airport access and maybe I will buy it.
- CLEAR should offer varied packages other than unlimited for all services. Some may be sold in limited visits (marketed to those outside of airports they serve). Other packages could be sold along with season tickets as an add-on to current event centers but would not work in airports.
What Can’t CLEAR Do?
There are a few things CLEAR can do and then there are a few things that they can’t. Delta’s ownership stake will likely block any future direct airline partnership development. I have no direct knowledge of their business model but their financial issues have not been a secret and I gather that Delta’s direct investment came at a critical moment. Delta is a fickle, perhaps even vindictive, partner at times (Alaska Airlines, Korean, SkyMiles changes) and unless the carrier wishes to reduce their investment size or can turn a tidy profit, I do not believe they will allow other airline partnerships. It’s unCLEAR (you see what I did there?) whether other carriers would even hold an interest in supporting the effort in their terminals let alone financially partnering.
The firm is also likely limited to the US for a few reasons. For one, the size of the available market (the US is the busiest in the world) and lack of competition would suggest that one should own this market first before expanding. That may preclude them from discovering markets which may be easier and cheaper to grow, for example, in Australia or Europe. CLEAR also maintains existing US-specific security infrastructure; a large investment would be required to work with other markets. Lastly, the US is home to some of the most onerous security experiences for average travelers – their value proposition may be more limited elsewhere.
But Will They?
CLEAR is making strides toward improving their offering. Their growth has picked up as of late due to the partnership with Delta, but it’s still not at the fever pitch that Priority Pass has advanced over the last few years. Their partnership with Delta has helped but it also limits their abilities to partner with other carriers and that leads me to believe it will remain a boutique offering for the foreseeable future.
What do you think? Will CLEAR follow Priority Pass’ lead? Have I missed something here? Do you have it and love it and think I am crazy? Comment below.