Should you go for a last-minute upgrade?

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Judith Patrizzi did it. So did Linda Petzler.

They said “yes” when their airline asked whether they were interested in paying extra for a premium seat just before boarding — a kind of offer that’s becoming increasingly common in the travel industry.

But their upgrade tales have different outcomes, and they serve as a guide to those of us who might be tempted by a pitch to move up to first class, upgrade into a suite or rent a snazzier car at the last minute. These upgrades are sometimes worth it, but not always.

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Petzler, flying from London to Dallas on American Airlines recently, was met with an offer to upgrade to business class for $500. As a former gold-level frequent flier, she’d been trying to secure an upgrade weeks before her departure, to no avail. The verdict? Well worth it, she says.

Although the food wasn’t much of an improvement, the extra room and the ability to use American’s Admiral lounge in Heathrow made up for it. “It was a great deal,” says Petzler, a retired computer systems architect from Plano, Tex.

Patrizzi, who was going from Rome to Boston on Alitalia, said she was offered a “business class” seat for 189 euro, which seemed almost too good to be true. And wouldn’t you know it? It was. She and her husband, Eugene, were assigned bulkhead seats in the premium economy-class section.

“The seats did not seem any roomier to us than the seats we have used in economy class on other airlines,” says Patrizzi, a retired manager for a community college who lives in Vernon, Conn. “The food was terrible. It was definitely not worth it.”

Offers like these are happening with greater frequency, and not just with airlines. Car rental companies, cruise lines and hotels are also presenting last-minute upgrade opportunities to select customers. In some industries, such as auto rentals, the offer at check-in is practically a given. But in others, it’s still fairly new. When done correctly, these upgrades can add anywhere from a quarter to a half percent of incremental revenue to a business’s profit margin. The domestic airline industry had a 7.8 percent profit margin last year.

“That can translate into a very large increase in profits,” says Warren Lieberman, a travel industry pricing expert and president at Veritec Solutions.

Put differently, it’s almost always a good deal for the company. But it might not always be a good deal for you.

Alitalia says it represented its premium seats correctly when it sold Patrizzi her upgrade, noting that their seats were in the premium economy cabin, known as Classica Plus. Their price “corresponds to premium economy,” said airline spokeswoman Elizabeth Santella.

Alitalia offered Patrizzi a $50 voucher “in consideration of your disappointment.”

In order to determine whether you should take advantage of the next upgrade opportunity, it helps to understand what’s happening behind the scenes. Travel companies are trying to do two things: First, they want to make these upgrade opportunities as unpredictable as possible. If customers can anticipate them, then they might try to game the system, which would lead to what the bean counters would call “revenue dilution.” That’s “losing money” in English. Second, perhaps more significantly, they want to target the right travelers.

“The basic technology to offer the upgrades has existed for at least 10 years,” Lieberman says. “But we now know much more about you than we did before, so the offers are much more targeted.”

Petzler is a good example. Offering her a taste of the good life on her transatlantic flight, at a fraction of the cost of a full-fare ticket, might persuade her to again go for the gold (as in her former level of frequent-flier status), where upgrades are sometimes available. The airline gets a little extra money from it too, though not as much as if she’d bought a business-class ticket.

The hard part about last-minute upgrades, at least from a customer’s perspective, is that you feel as though you have to make a fast decision, sometimes with little or no knowledge about the product. Is it really better? Patrizzi didn’t think her seat was much of an improvement, and she was unimpressed by $50 in funny money from Alitalia. Ditto for car rental upgrades, which are the most common last-minute offers made. Is that sedan really worth an extra $20 a day? Or will it just consume more fuel and take up more space in the hotel parking lot?

Patricia VanHooser, a general manager for a pest control firm in Kansas City, says she imposes a spending limit on her upgrades. “If I can get an upgrade for less than $50 on a flight that is more than 2½ hours, I’ll take it,” she says. Once, she took a $35 offer to upgrade to first class on a red-eye from San Diego to Atlanta.

“When I landed, I got a shower and went to work feeling great,” she says. “So sleep was the main consideration on that flight.”

Other travelers are willing to spend more, especially for longer flights. Gina Dyson, a student affairs director in Baltimore, recently paid $900 for an economy-class seat to fly from Philadelphia to Athens on US Airways, an 11½-hour haul. When the airline said she could jump to business class for $500, she didn’t hesitate.

“The seats were not overly big, but it did allow me to almost lie flat,” she says. “I thought $500 was a good deal for the length of the flight.”

These 11th-hour offers almost always sound attractive, but they merit careful research. Make a snap decision only if you know the product well, as Petzler or VanHooser did.

These sharp class differences wouldn’t exist in a perfect world. Ideally, everyone would travel and stay in relative comfort, instead of having a cabin filled with many “have-nots” and only a few “haves.” But the class system is alive and well, and it’s delivering handsome profits to the travel industry. It will take more than one crusading consumer advocate to change that.

Who benefits more from last-minute upgrades?

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68 thoughts on “Should you go for a last-minute upgrade?

  1. I’m not sure I get the point of the story. The company offers an upgrade. Whether the upgrade is worth it is purely an individual matter. Whether its a business class seat, or a bigger car, that’s a matter of desire and budget. One buddy is 5’4″ 120 lbs, another is 5’10, 595lbs. I suspect each values additional space differently.

    It seems to me the only real issue is making sure that you know what you are getting. I am skeptical that Patrizia was offered a business class seat. I suspect that she was offered an “upgrade” which she took to mean business class. That is of course purely speculative on my part. Of course, if the agent lied to her, that’s a different matter

    It appears that the real issue is that it is incumbent on the customer to know what is being offered and if not, ask questions to become informed. That is of course true for any purchase. Ignorance is not bliss.

    The part about the benefit to the airline is fairly superfluous. One should assume that any offer by a for profit business benefits the business. It would be foolish to do otherwise. But consider, in ordinary day to day shopping, do we consider how much the item costs the store or how much profit the store is making? Generally not. We only care about whether the item is worth it to the buyer.

    My $0.02

    1. Well said, CCF. I missed the point, too, and had similar thoughts to yours, which you expressed so well.

  2. Why are you complaining about it? It is more in line with your socialist agenda. The non elite can buy a seat in the higher cabin for cheap and deprive an elite from getting it for free just because of their status. Maybe you prefer a lotto system so those who cannot afford have a chance to enjoy lay flat seats and first class food. I can’t wait.

    1. Tony, I would not put it in that way.

      For years, I’ve enjoyed Chris holding travel companies accountable in his National Geographic Traveler column. That’s his calling. He’s our Mike Wallace.

      The problem arises, I believe, when the outcomes Chris favors do not just cost travel suppliers. These make travel less affordable for all Americans.

      That resort may look terrible when it refuses to refund the payment of a traveler who now has become ill. However, who’s going to really pay for that refund? I buy travel insurance. I don’t expect others to assume my risk.

      Rightly or wrongly, I believe that Chris comes from a privileged background. Compared to many Americans, his present economic situation seems secure. Gigs like his National Geographic Traveler post are not going away anytime soon.

      Chris seems not to realize that many travelers are willing to sacrifice aspects of service in order to be able to afford to travel.

      Ryanair may not be our first choice for airline travel (to put it mildly), but my Godson’s brother, with little money, used it to travel Europe. To avoid fees, he printed his boarding passes ahead of time and didn’t bring along luggage to check.

      Options like Hotwire, which Chris dislikes, can never provide the level of certainty of booking directly with a hotel or through a travel counsellor.

      These can and do provide the savings necessary for many to travel to expensive places like New York City, without staying in a hostel.

      I say judge these on how well they are doing what they say they do, not on how they compare to more expensive options.

      1. Don, thank you for the kind words. I’m glad you enjoy my column.

        I would correct you on one item, which relates to my background and the economics of consumer advocacy.

        I grew up in a family with very little money. We survived paycheck to paycheck. My father dedicated his life to his ministry. Today he is retired with no meaningful savings and almost completely dependent on Social Security.

        My parents scraped together enough money to send me to college for a semester. After that, I was basically on my own — dependent on loans and any grants for which I could qualify. I held down two jobs in order to pay the bills and I worked during the summer. I graduated from a state school.

        Like most Americans, the recession hit my family hard. My income has dropped every year since 2008. When I travel, I drive to my destination and stay with friends to save money, as I just did when I was up in Washington. If I am privileged to fly, I sit in the back of the plane. I buy my food at grocery stores instead of eating at restaurants.

        I think if I had a privileged background and made tons of money, I would be writing one of those mileage blogs and telling people how to “hack” travel. But I don’t feel as if luxury is an entitlement that should go to the cleverest passengers.

        Instead, I want to make the travel experience better for everyone, even the people in the back who don’t have the time and the wherewithal to hack. So go ahead, call me a Socialist. I don’t mind at all.

        1. Chris, thank you so much for your reply. I am sorry. I should never have speculated on your background or current economic situation. That was totally unnecessary and inappropriate to make my points.

          By the way, I did not call you a Socialist. At the risk of being labelled a snitch, TonyA did.

          1. The appellations “socialist,” or “liberal,” are often used as
            epithets with derogatory connotations. I suspect many who do so paradoxically are in favor of social security, consumer advocacy, Supplemental
            Nutrition Assistance Program and Special Supplemental Nutrition Program for Women, Infants and Children, Public Housing, Pre-School Education, aid to colleges, State schools, Medicare, Medicaid, government loans for mortgages, disaster relief, Unemployment Compensation, and welfare.

        2. Thanks for sharing your history.

          I grew up in a similar situation. Both parents worked and did well enough to put a roof over our heads, food on the table and clothes on our backs. There wasn’t much left after that. I also paid my way through college while sometimes working 2 jobs simultaneously. But I feel I have a better understanding of life in general than someone who did not experience these hardships and hope I have become a better person.

          1. I appreciate everyone’s narrative. Its nice to get a fuller understanding of each person.

            I grew up on small island in the Caribbean, 13 miles long. One of the hallmarks was the lack of choice and competition. The result was high prices, exceptionally poor service, and limited choices. I remember it took 3 months to get basic cable installed. 2 grocery stores on the entire island, and only one electronics store that wasn’t basically mail order.

            I remember traveling to the mainland and being amazed by the cheaper prices, the service with a smile, and the numerous choices. That experience defined my pro-market perspective.

  3. What is the point of the poll? Using the examples in the story, more people were happy with their purchase than weren’t. Customers win.

  4. So what was the Alitalia passenger actually offered?

    Patrizzi, who was going from Rome to Boston on Alitalia, said she was offered a “business class” seat for 189 euro

    Their price “corresponds to premium economy,” said airline spokeswoman Elizabeth Santella.

    Did it SAY business class or did it SAY Premium Economy or just plain ‘upgrade’?

    If the former, then I think she has some case. But 189 for PE isn’t bad if she was looking for legroom.

    1. But did her bulkhead seats allow extra legroom? Each plane is different, but the one time I had bulkhead seats, I had even less legroom than usual. I read that some bulkhead seats have the tray table in the armrest, which can reduce the seat space. I’d be pretty miserable in that kind of seat.

      1. I can’t imagine a PE seat having less than an economy seat, but who knows. She didn’t complain about legroom per se, just about how the roominess “seemed,” and that it was in PE vs. business. I’m a little confused about several details.

      2. According to seatguru (dot) com. Alitalia’s A330 has 6-7 inches more legroom, over 2 more inches of width and 10 degrees more recline in Classica Plus vs. Classica.

        1. Good point. Just looked at the seat map. One fewer seat per row in the premium economy cabin. Absolutely a benefit there.

      3. I’ve learned to be pretty cautious about paying extra for premium economy. Once I saw absolutely no difference in the upgraded seat, and once when I sat in bulkhead it was one of the seats with the tray table in the armrest. I’m a little fluffy, and that was probably the most miserable flight ever. When it’s economically feasible and the segment is over two hours, I see if I can swing FC. PE tends to not be worth it.

    2. I can’t imagine the airline will say what the LW quotes.
      The standard offer is one cabin class upgrade.
      For Alitalia in this route is it their Premium Economy Class called Classica Plus.

      1. Thanks for the seat map. The case description seems confuse to me. I really didn’t understand if they were upgraded for row 11 (or other bulkhead seat at Classica cabin), or for row 8 at Classica Plus.

        1. “She and her husband, Eugene, were assigned bulkhead seats in the premium economy-class section.”

          Taking that as a correct statement, they would have been in row 8.

          1. Thanks. I just had scrolled down some posts and saw Tony’s seat price evaluation. It’s clarified to me now 😉

          2. She and her husband, Eugene, were assigned bulkhead seats in the premium economy-class section.
            “The seats did not seem any roomier to us than the seats we have used in economy class on other airlines.

            The 2 middle rows of PE have more legroom than the bulkhead row.
            Unless she was cramped (legroom not her real complaint) in PE then all she is having is upgrader’s remorse. I guess she fits the partial bitch category.

          3. Her complaint is with the roominess of the seat and the seats themselves are definitely roomier than Alitalia standard economy. But her complaint is the seat isn’t roomier than other airlines economy classes.

            What other airlines use a seat with a width greater than 19.2 inches in standard economy?

  5. It need not be a win-lose situation. A win-win seems the more likely outcome, with the traveler usually getting a better product and the airline more revenue.

    1. One could argue that if the airline still had premium seats available at departure, the revenue management team should have done a better job of pricing them to sell out in advance. An available premium seat at time of departure is like a piece of fish about to be thrown out in the evening clean up at a seafood store. I’m sure American had hoped for more than a $500 premium from London to Dallas when the flight was put out for sale.

      Yes, they got $500, but American certainly values it higher.

        1. As much as you can get for it, if it is a commodity item. 🙂

          I’d bet $500 per seat is not a sustainable model though so that’s why I say the customer benefited more than the airline in the first example.

          1. What’s not sustainable is a big mismatch between supply and demand. If the airline has too many unsold BC seats for a route, it means they did not match supply and demand well. Prices have to come down or reduce the number of BC seats.

            Getting marginal revenue (by asking bids for unsold BC seats or by other methods) is sustainable if you have covered the fixed costs already or the flight is already profitable.

            But I agree with you, unless the airline is selling BC at least 3-4x coach, something is quite wrong in the long run.

          2. Yes, getting marginal may be better than nothing, but not optimal.That’s why I think the customer benefits more. I guarantee AA’s business model calls for more than a $500 premium on the average business class fare vs. economy.

          3. Actually I do not understand why the question – who benefits more needs to be asked.
            Every person votes with their pocketbook. What they are willing to pay depends on their own perceived value. It’s a personal thing.
            The airline, on the other hand, is simply trying not to waste an “expensive” seat. They would have received *zero* if they didn’t sell an upgrade.
            So they both make a deal. They both gained. Who cares who got out more on top. That’s irrelevant.

          4. Yes….but that is the poll question we are presented with. Maybe asking “Who benefited?” (without the word “more”) would be a better question. Offer three choices, customer, airline or both. (But then we would not be having this discussion!)

          5. A strong economic argument is that the willing, and well-informed, buyer always benefits more from a transaction. The seller (airline) offers a good or service. The buyer has to value that good or service at a price greater than the purchase price otherwise the buyer would not consummate the transaction.

            If the airline offers an upgrade for $500. No rational buyer would make the purchase if he or she only valued the upgrade at $400. They would sustain a loss of $100 in value.

            So my 5’4, 120lb buddy would generally pass on the upgrade to business class. My 5’10, 595 lb buddy would jump at the chance.

          6. And your 595 lb buddy would probably be forced to buy 2 seats in standard economy by most airlines because he would visibly appear to be larger than a single seat. The upgrade would be less costly than the second seat in most cases for international travel.

          7. It makes for a great story and resonates with those think that large corporations are inherently evil, especially when they make a profit.

          8. In this (FCO-BOS return) particular case, it was very fair to the LW.
            Compare the difference of the cheapest economy and premium economy fares:

            AZ: BOS – ROM

            Cheapest Economy (L) /SEG 294.00
            Cheapest Prem Econ (A) /SEG 524.00

            Difference (L) USD 230.00
            Charged EUR 189 USD 257.00

            She paid $257 (spur of the moment) for something that is worth at least $230 if bought ahead of time (assuming you can combine a coach and premium econ cabins in one ticket).

            To complain about this later on is simply ridiculous.

      1. It could have been a last-minute cancellation – they do prepare for those, and usually offer them when it happens – that way they make more money, and the client gets a great deal! Also frees up more seats in economy, so they can board standbys.

  6. On Alitalia, just getting off the ground is almost too good to be true.

    In any case, the most common problem with upgrades is those confusingly named cabins other than Business and First. How do we know what “World Class” or “Premium Economy” means in the lingo of one particular airline?

    1. lol. That’s the benefit of being a regular traveler with the same airline. You might actually be familiar enough with the airline to know what those terms mean. And of course, if you’re going to be a regular traveler with the same traverl provider, you may as well join the loyalty program.;-)

      1. An educated consumer and the “L” word? CE will give you 40 lashings.

        Who benefits from upgrades? If it’s a profitable business…the business. As you said earlier, the customer will also benefit if he or she is well informed about the value of the upgrade.

    2. On Alitalia, just getting off the ground is almost too good to be true.

      That’s a really ignorant thing to say about this flight AZ614.
      Check with flighaware link below:
      flightaware dot com/live/flight/AZA614/history
      This flight hasn’t had a cancellation since March 13 – the earliest report date you can get for free.
      Most delays are within 30 minutes of scheduled arrival. For FCO and BOS that is pretty normal, IMO.

      For Italian Americans in Boston (and there are plenty of them) this is a godsend since it is the only nonstop between BOS and Rome.

      1. I really believe Alan was making a joke.

        Since I have never flown AZ, I have absolutely no idea about their reliability. But I have read several news articles and even articles on this very web site about issues with them that did make me laugh at the comment.

  7. Buying the last-minute upgrade for a rental car is usually a joke. How many times have I reserved the cheapest car, been offered an upgrade for just $5 per day, declined, and then assigned an upgraded class because they didn’t have any of the cheapies available anyway!
    It is a game and we can all play it.

  8. Has any reader here tried negotiating the cost of an offer for a last minute upgrade? For example, if an airline rep offered to sell me an upgrade to business class for $500, maybe I would counteroffer $250. I really do wonder if that can work. From the perspective of an airline, getting any amount more for an empty premium seat on a fully provisioned plane ready to depart is a win.

    1. Most of these offers are made to the passengers while checking in online. If not accepted as offered, it is not there the next time you look or the price has gone up considerably (at least in my experience). These offers are not made at the airport while checking in in person. You are free to ask abut paying for an upgrade, but the price is usually the full upgrade price and not the highly discounted price offered to online check in passengers. The unpurchased upgrades turn into “free” upgrades for the high level frequent flyers or the seats go empty.

          1. I did a Delta one at spring break time to Orlando. Lots of rowdy kids on a Friday night. I was tired and wanted to rest. The gate agent made an announcement that First Class was available for $100. I got to the podium first and got the upgrade. I ended up drinking with my seatmate talking about basketball. (So much for resting!)

          2. I remember when Alaska Airlines used to offer 1st class upgrades for $25. But they were only available at the airport the day of flight at the gate. I was usually able to get one unless the flight was completely sold out. They still make the offer, but the price has gone up a lot.

            Hawaiian also offers 1st upgrades between HNL and the mainland for around $250. I got these several times even when flying on reward tickets. Funny thing was after the upgrade, I got mileage credit for a full fare 1st seat. So I got mileage credit when flying on a mileage reward ticket! (They fixed that recently, no more extra credit.)

    2. I can’t imagine that working too often, especially on a long flight. I’m sure there are many passengers willing to take the offer

  9. This is a little off-topic, but since Chris did mention rental cars, I’ll throw it in.

    When the person at the rental counter offers you an upgrade, it almost always means they don’t have the car you reserved. and they’re trying to get you to pay extra for the larger car they’re going to have to give you anyway.

    ALWAYS reject a rental counter offer of an upgrade “for a few dollars more”. You’ll probably get that upgrade for free.

    1. “For a few dollars more” was a good movie. I remember a lot of people staring into other people’s eyes in the movie. Seems a lot like the rental counter experience – who blinks first?

    2. I’ve heard that. I’ve also heard that they are just trying to upsell regardless of whether they have your car or not. Upsell = commission.

      I just bypast all the BS and joined the loyalty program. It was free and my car is waiting for me in the stall. No insurance pitch, no upsell pitch. Get the car and go.

      1. I’m not a huge fan of loyalty programs, but I DO like the car rental programs. I still shop around based a price a bit, but since I belong to all the majors I skip the lines and don’t have to deal with the upselling.

    3. Maybe my experience is different, but I’ve never been upsold due to lack of inventory. I’ve gotten a minivan at a standard price, and the offer was automatic. I’ve also taken one of the last few cars in the class because they were running low (but putting returns back as quickly as they could prep them). About the one thing I recall was being offered a convertible, and that wasn’t due to lack of inventory.

      My wife has always wanted me to slip a hotel clerk a $20 to get an upgrade, but it feels slimey and I’ll refuse. I’ve still gotten upgrades offered for free.

  10. Perhaps a little different perspective. On a 2-2.5 hour flight, I might pay $10 for more leg room (only). On a flight from the mainland to Hawaii, I’d pay maybe $50 for more leg room (only). No interest in a lie flat seat unless I’d be on an international flight of 8 hours or more.

    However, given an experience I had 25 years ago, I would offer to pay (if I could) a modest amount for a struggling passenger(s) so he/she/they might be less stressed. Back then, A UAL employee saw me running through ORD with my little girl who had leukemia and picked up my bags, took me to the gate, and saw to it that we sat in first class. There were many empty seats in first class, so it cost UAL nothing, but meant everything to me. I’ve not forgotten what a simple gesture of kindness can mean to someone in difficult circumstances …

  11. This story is interesting, but I don’t get the point either. Before you go to the airport, figure out the max you’ll pay for an upgrade. LISTEN to the agent describing it and fly happy if you buy it. I’m 5’10” with the legs of a basketball player and the shoulders of a linebacker, I can barely fit into a coach seat for more than 90 minutes. I did laugh at the mention of Alitalia “first class” … we got a comp upgade several years ago Amsterdam-Roma and the seats were no different than economy when it comes to size/comfort, nor was the service. Kinda fit my opinion of Alitalia at the time.

  12. Good column. I really like the day-of paid upgrades. Its one of the few new “fees” airlines have added that I actually see merit to. I can rarely actually afford a First or Business class ticket, but often I can afford the extra couple hundred dollars on top of the Economy fare that I’m offered when I check in. It’s made a huge difference on multiple flights and have made certain trips much more enjoyable. I find myself nowadays crossing my fingers when I check in for flights hoping for this offer.

    Another thing, even if you’re not offered an upgrade when you check in, you can always ask at the ticket counter. I did this recently on a British Airways flight. There was nothing during check in or on the web site that said anything about paying for an upgrade on the day of flight, but when I asked the ticket agent, an upgrade to business was definitely available for a few hundred dollars.

  13. A few years ago, coming back from Hawaii, my husband and I were offered an upgrade to FC for $250 each, and an upgrade to an exit row for our 19 year old son for $75. We had already paid an additional $49 for premium economy but decided to accept since this had been a special trip for us.
    Well, maybe my ideas of FC come from old movies, because while the seats were nicer, the “basket of goodies” that the FA handed around with peanut butter crackers etc… weren’t the “filet mignon” I’d been envisioning! Nor was the granola cereal the next morning. BUT, having recently suffered a DVT, the extra room was a blessing and we both did sleep so for $250 it was marginally worth it.
    Poor son though! That “exit row” seat? Well, on USAIR’s older planes, the exit door bulges INWARD so he had no room and a bruise on his leg from being pressed up against it for hours. The FA brought him a pillow to buffer it and said, “I don’t know why they keep selling that seat as a premium seat!” For a small person it may have been okay but not a 6’1″ male. Since the woman next to him was very large (and he really hates contact with strangers) he was in misery the entire 9+ hour flight. USAIR didn’t even bother to respond to my request for a refund of either our original $49 upgrades, or his $75 upgrade, even though I sent pics of the bulging door to show that he got LESS space than he would have in a regular seat. But, I let it go because in the end, we all had an amazing vacation with my daughter who was on leave from Afghanistan, and we all made it home in one (slightly bruised in his case) piece.

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