Dreamfolks Lounge Crisis: Why Banks and Airports Are Moving Away
Air travel has become a premium experience in India, with airport lounge facilities providing great convenience. But now there are signs of a major shift, with Dreamfolks lounge services, once in high demand, facing serious business challenges. Until a year ago, 90% of India’s lounge access business was conducted through Dreamfolks. But now banks and airports are forming direct partnerships, forcing Dreamfolks to discontinue its airport lounge services in India.
Dreamfolks Lounge: The Sudden Exit
Until last year, Dreamfolks Services was India’s largest airport lounge aggregator. However, the company has now announced that it is closing its Dreamfolks lounge access business in India. This news immediately triggered a significant stock market reaction. The Dreamfolks share price fell 5% to ₹131.07 on the NSE, causing significant concern for investors.
The company took this step because major banks and airports are now preferring to manage their own lounge businesses. This development has a direct impact on travelers who access Dreamfolks airport lounges using their bank cards.
Why Did Dreamfolks Shut Its Lounge Services?
The biggest reason was that Dreamfolks’ top clients—mainly large banks—ended their partnerships. Major players like Axis Bank and ICICI Bank had already begun moving away from Dreamfolks. Now, airports have become lounge aggregators themselves, dealing directly with banks.
Encalm, which operates Delhi airport lounges, and Adani Group’s Semolina Kitchens, which operates lounges in Mumbai and Lucknow, have also removed their lounges from Dreamfolks. This has reduced Dreamfolks’ options and increased competition.
Impact on Customers Using Dreamfolks Airport Lounge
The situation has changed for frequent travelers who used their bank cards to access the Dreamfolks lounge. If their bank has established a direct tie-up with the lounge operator, they may still be able to gain entry. However, customers whose banks have not yet integrated with the new partners will temporarily lose the benefits of airport lounges.
This is a major inconvenience for travelers who use premium credit cards or travel cards specifically for lounge access. The frustration of travelers like Benu Singhal reflects this. During the peak travel season in July, her Tata New card was rejected at a swipe machine, forcing her to vent her anger on social media.
Dreamfolks Lounge Business Dependence
Sandeep Sonawane, Chief Business Officer of Dreamfolks, stated in a call with analysts that approximately 93% of the company’s total revenue comes from the lounge business alone. This means that if the Dreamfolks lounge service is shut down, it will have a direct and significant impact on the company’s overall revenue. This dependency has now become a major challenge for Dreamfolks, as they will have to find new sources to sustain their earnings. Only 7% of revenue comes from services outside the lounges, which is currently insufficient for the company.
The company’s biggest challenge now is to diversify its revenue model and introduce new service offerings. Dreamfolks has already announced that it will introduce pick-up and drop-off services, visa application assistance, and premium travel-related facilities.
What’s Next for Dreamfolks?
Company Chairperson Liberatha Kallat stated in the June quarter analyst call that Dreamfolks is now planning to expand into Southeast Asia and Middle East markets. It will offer new services such as golf access, railway lounges, wellness packages, coffee outlets, and social clubs. This expansion plan will create a unique value addition for travelers that is not limited to airports.
Dreamfolks also stated that it is exploring strategic partnerships and acquisitions. However, specific details have not yet been made public.
The company’s FY25 revenue was ₹1,291.88 crore and a profit after tax of ₹65.05 crore was reported. But analysts believe that replacing more than 90% of lost revenue and reviving the business will be a tough challenge.
Dreamfolks Share Price and Investor Concerns
Investors’ biggest concern is how stable Dreamfolks‘ future revenue growth will be. The stock’s performance has been under pressure since the Dreamfolks lounge services were discontinued. Market experts believe that until the company successfully launches its new services and stabilizes revenue, volatility in the Dreamfolks share price will remain high.
Conclusion: The Uncertain Future of Dreamfolks Lounge
There was a time when Dreamfolks Lounge was associated with airport luxury. But now, new direct partnerships with banks and airports have completely shaken up Dreamfolks’ business model. Customers who used to enjoy Dreamfolks Airport Lounge through their credit cards are now facing a period of uncertainty.
The company’s next focus is on non-lounge services and international expansion. If it can scale its new service verticals, a new growth chapter could open up. But for now, the challenge for Dreamfolks is to reinvent its brand and win back its customers’ trust.
Disclaimer:
This article is for informational purposes only. Details provided are based on market reports and news updates. Readers are advised to conduct their own research and seek expert advice before making any investment or financial decisions.
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