Posted by Seth Miller on May 9, 2013 under points | 
If you believe the bloggers, the latest sign-up promo might have been the most significant news this year. It certainly gathered the most posts in a 24 hour period of any story I have tracked this year (and I’ve been tracking a lot of them, thanks to the hack.travel site). In the past 24 hours no fewer than 21 posts were published about the deal, often using terms like "amazing" or "incredible." And, to be fair, it is a good sign-up bonus, though the $5000 spend threshold is also on the higher side. And I don’t really fault the bloggers who are making money from the signups for sharing the information; it is actually news.
But how many times does it need to be shared?
Four different bloggers felt it was so incredible that it deserved to be talked about more than once in the same 24 hour period. One felt it deserved three separate posts. At that level I start to wonder just how much of it is trying to help readers versus themselves.
Here’s the full list I have of headlines (in alphabetical order by the blog) and who wrote them. Did I miss any? And which is your favorite headline??
- Limited Time Offer: 75,000 Points for The Business Gold Rewards Card® from American Express OPEN — Deals We Like
- 75,000 point AMEX Business GOLD card up from 50,000 after $5000 spend! — Delta Points
- 75,000 Bonus Membership Reward Points With the Business Gold Rewards Card from American Express OPEN — Doublewides Fly
- CREDITCARDS: That amazing 75k sign up offer for AMEX Business Gold Card is still active — Frugal Asian Man
- American Express Gold Business Offering 75,000 Points — FrugalTravel Guy (Ariana)
- 75,000 Point American Express Business Gold Rewards Sign-Up Offer — Live and Let’s Fly
- 75000 Membership Rewards Points for Business Gold Rewards Card from American Express OPEN — lovetofly
- Top 5 Questions on the 75,000 Points American Express Business Gold Rewards — Million Mile Secrets
- Won’t Last! 75,000 Points (~$750+ in Travel) With The American Express Business Gold Rewards Card — Million Mile Secrets
- Big Points – 75,000 Points From The Business Gold Rewards Card from American Express OPEN — MJ on Travel
- Amex 75,000 Points ($750+) Offer Still Alive and Kicking! (Now Expired) — Mommy Points
- Great Deal: 75K Membership Rewards for Amex Business Gold Rewards Card w/5K Spend! — Mommy Points
- Answers to a few common questions about the American Express Business Gold Rewards Card 75,000 point sign-up bonus — One Mile at a Time
- Amazing 75,000 Membership Rewards point sign-up bonus on American Express Business Gold Rewards Card! — One Mile at a Time
- How I Got the Incredible 75K AMEX Business Gold Offer to Work & Why You Should Take Advantage — Point me to the Plane
- Amazing Deal Alert: 75K Bonus For the Amex Business Gold Rewards Card — The Points Guy
- Business Gold Rewards Offer: What Do 75K Amex Points Get You? — The Points Guy
- Amex 75,000 Point Business Gold FAQ and My Top 10 List of Other Credit Cards for the Last Minute App-o-ramas — The Points Guy
- Limited Time 75,000 American Express Offer With The Business Gold Rewards Card® from American Express OPEN — The Weekly Flyer
- 75,000 Membership Rewards Points with the Business Gold Rewards AMEX Card after $5,000 spend — Torsten Jacobi
- Big Deal: Limited-time 75,000 Membership Rewards for American Express Business Gold Rewards — View from the Wing
Posted by Seth Miller on May 1, 2013 under frequent flyer, points |
How do you react when the head of a major airline loyalty program so bluntly states their case? More to the point, what do you say to the person wondering why they don’t get retention bonuses comparable to sign-up bonuses on an annual basis. Do you believe the programs when they say something like, "Every time we tweak [the benefits] we try to take off something that not many people are using and add something that we think more people will use."
Both the headline of this post and the above quote were offered up by Jeff Robertson, VP SkyMiles, during a session last week at the Executive Travel Summit outside DC. Robertson also offered insight as to why a less valued customer – one who doesn’t hit the spend requirements for Medallion status, for example – can suddenly become valuable enough to rate the status with $25,000 spend on a credit card. Unsurprisingly, it is because Delta will have made a lot of money based on that spend, pushing the customer past the value tipping point into being considered worth rewarding.
Throughout the five days I was at the sessions it was interesting to hear the different views of the parties involved. Sure, consumers want more and airlines want to give less. Airlines say the costs to provide the benefits are going up (as are airfares and load factors, so not too hard to believe). Customers say they want long-term loyalty to be rewarded, among other things. What was particularly interesting to me was hearing the view the credit card companies have on the topic.
Sure, the CC folks are incredibly biased. But that doesn’t mean the ideas they have cannot be solid. David Rabkin, SVP Consumer co-brands for American Express offered up a few views which seem pretty similar to the two-way street discussion, but which also have me wondering about which types of loyalty are the ones really worth rewarding. Using two different examples Rabkin quite clearly indicated that share of wallet is more valuable from a loyalty perspective than total revenue. In one instance it was a simple comment about credit card spending, "Someone who gives a high percentage of spend is loyal, even if it isn’t as much money as someone who spends a lot of money but across different cards…. The guy who only has a small wallet and gives you all of it is golden; give him all the rewards you can."
The second example offered up three hypothetical customers:
- Very frequent domestic lowest-fare customer
- Multiple long-haul F customer, but who also flies on competitors
- Credit card user who pulls your co-branded card out thrice daily
Of these, Rabkin made the argument that #3 was the best customer for the airline in terms of loyalty. Or, as he stated in the session (slightly paraphrased):
We love that guy who is flying in the back of the plane but he’s not making us any money. We love the $10k fare but he’s not loyal. We have to focus on the guy who is bringing us the best revenue.
I certainly agree with rewarding the best revenue more than the other options, but I’m not nearly as convinced that share of spend matters so much as total volume. That’s not to say either is 100% important or not, but earning the majority of revenue from a customer based on 3rd-party transactions is a strange way to believe they’re loyal to me. At another session over the weekend there was some discussion of lesser-known loyalty programs and how some of them (BMI was the big name in this space previously) were shells which seemed to be associated with an airline but where the bulk of the points activity seemed to be wholly third party. There are a couple still out there today. What happens when the operations of the loyalty program become so completely disconnected from the operations of the airline? Is that a sustainable way to run the business? Sure, the airlines get to manufacture the award inventory on their own planes, but when partners get involved there are a lot of variables they don’t control, and that can be a challenge.
Ultimately, considering that 60% of points earning these days happens outside of flying (I thought the number would be higher) it isn’t all that hard to believe that Rabkin is correct in who the most valuable customer is. But does that make them the most loyal? And is that the loyalty to be rewarded?
And then there is the final theme which was pervasive throughout the sessions, "Miles are a relic of history. In the next 5 years, maybe 3, programs will be revenue based." That’s a direct quote from an industry insider and I think that the timeline is probably about right.
The industry is entering into a period of significant change in the coming years. There is significant pressure to reward the right types of loyalty, not just time on a plane and not just absolute spend. There will be moves to shore up programs, ensuring that they remain revenue positive for the airlines while also not losing too much in the competitive landscape. Then again, with less competition, that is much easier to do. It isn’t like there are any programs out there which are ridiculously generous across the board.
Posted by Seth Miller on March 1, 2013 under Lounges, News, PaxEx |
A couple more airport lounges opened up this week and, from the looks of things, they are two which will quickly become quite popular with passengers. American Express has opened a Centurion Lounge in Las Vegas and Avianca has a new facility in Bogota, Colombia.
The American Express Centurion Lounge in Las Vegas is one of only two the company operates in the United States; the other is in Dallas, though I ‘m not sure if it is open yet or not. The lounge is in the D gates, not far from where Delta operates. And it is full-featured, including a hot food menu curated by Scott Conant and a bar menu overseen by Jim Meehan and Anthony Giglio. The lounge also includes a business center, a kids play room and shower facilities. I have also seen some photos from friends who have passed through in the first few days it is open and I’m quite impressed. And, while I don’t recognize the big names AmEx recruited to build the menus they seem to have pretty impressive resumes.
In Bogota the new Avianca lounge is huge; it can accommodate 670 passengers in over 6,500 square feet of space. And, like most proper international lounges, it also includes a business center, hot and cold food offerings and other amenities. The Avianca lounge also includes a separate area inside for their Diamond Elite members, a step above the Gold lounge facilities available to most guests. As for the design aesthetic, I have only seen one photo and the carpet is, well, exciting.
Always nice to see more lounges opening up. And these are two which should leave their guests quite happy, indeed.
Both lounges have also been added to the collection at the Wandering Aramean Travel Tools Airport Lounge Guide.
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Posted by Seth Miller on January 18, 2013 under frequent flyer, News, points |
The shift towards revenue as the defining characteristic for loyalty value is picking up speed. Several smaller carriers have made the shift over the past couple years and now a major US airline is joining the efforts. Delta has announced that stating with their 2015 Medallion program year the carrier will require a minimum spend in addition to flight thresholds for passengers to acquire elite status.
The good news is that the details of the requirement – essentially 10 cents per mile – are being published well in advance of the requirements kicking in. The spend will be a factor for earning status in 2014 towards the 2015 program year. Members of the SkyMiles program have plenty of time to figure out if it still works for them and, if not, to figure out their next move. And I’m guessing not so many will be making a move.
For most passengers, the spend requirements probably aren’t all that bad. The price point is actually below the overall average fare price for tickets across Delta’s system. In other worlds, passengers who have Medallion status for less spend than that are below average in revenue to the company. It isn’t hard to understand why Delta would not want to reward those customers as much as the above average spenders. And the whole point of the loyalty programs is to reward your best customers, right?
The 10 cents per mile requirement will have many up in arms, particularly in the points & miles community. The discussions online have been rather exciting since the rumors of this change started swirling and they haven’t calmed down since the official announcement today. For customers focused on getting as much value as possible for the minimum amount invested this move is pretty much the end of the road.
It is also worth noting that customers spending at least $25k on a co-branded American Express credit card will have the spend requirement waived. Not necessarily because Delta realizes the same revenue from the CC spend but the cost of servicing that is rather lower, meaning the margins are in favor of the CC customers.
There are plenty of problems with the accounting scheme. Most of them come from not counting spend on partner travel (I don’t see only counting base fare as a problem) and setting themselves up for some very strange rollover miles situations. But the big picture of the new plan is reasonably well structured. That doesn’t mean it is great for all customers, but it is great for the ones the company wants to reward.
In reading around the webs on the change I was quite surprised to see Gary over at View From the Wing say, “I like marrying a minimum spend level with miles flown.” That’s a big change in stance and one I hadn’t expected. Personally I’ve always wondered why the airlines didn’t go this route. I know it isn’t good for me personally as a customer given my spend patterns, but I also know that I’m not the right customer for the airlines. Yet somehow they keep rewarding me.
It is simply a matter of time now before the other major carriers make their moves in response to Delta’s. It will certainly be interesting to watch this play out.
Posted by Seth Miller on January 14, 2013 under frequent flyer, News, points |
Lots of folks will gladly tell you how awesome the American Express Membership Rewards program is (and often include a link for you to enroll, earning them a few bucks for the effort). The points are reasonably easily transferred to a variety of loyalty programs and the overall value is decent. Plus their enrollment bonus numbers are often pretty solid, including some incredibly generous offers every now and then. But all those points have to be paid for eventually. For American Express that point is apparently now. And the numbers are not pretty.
The company announced a number of financial charges and restructuring efforts late last week, many related to their credit card products focused on lower income markets. But there was one rather surprising number which also cropped up in the list of charges the company would be recognizing:
It also said it would record $342 million in expenses related to its cardholder rewards program after determining the rate at which its customers redeem points earned on purchases is higher than previously calculated.
It would seem that the folks running the actuarial tables to bet on how much servicing the points will cost missed. Badly. More than a third of a trillion billion dollars in redemption costs AmEx pays to partners was missed as part of their recent performance efforts. Is this because customers are becoming smarter about how they redeem their points? Or because they really just screwed up in the accounting department? Hard to know for certain but neither is necessarily a comforting thought.
The company was still profitable in the quarter despite the write-downs so this isn’t likely to lead to massive restructuring of the awards side of their business. Still, it has to raise some concerns in the world of cardholders churning for points. As the cost to service the points rises the acquisition costs of customers grows. Trying to keep that number down is one of the primary keys to building a strong customer portfolio. If the enrollment bonuses cost the banks more over time then either the points have to decrease in value or the number issued has to decline. Neither of those is a particularly enticing option.
Definitely something to pay attention to in the coming weeks and months; maybe there was a very real business reason so many affiliate link providers got cut recently.
Posted by Seth Miller on November 24, 2012 under Deals |
I wasn’t out too early this morning for Shop Small Saturday but I have successfully completed my shopping efforts, getting my freebies courtesy of American Express. A couple of the stops I made were just general errands – I’m not the type to buy extra junk just because it is free – but there was one stop I made specifically to restock on some travel gear. I figured I’d share what I got since I think they are goodies which make my travel experience significantly better every time I head to the airport.
My shop of choice was Flight 001 in Manhattan. They aren’t always the cheapest price-wise but they have some awesome travel gear and the staff is generally quite nice. Plus, today’s purchases are free anyways so why not.
I picked up a few extra GoToob bottles for my liquids. These are refillable silicone containers which I use for sunscreen or body wash. They seal well and pack even better. Plus, they are 3 ounces or smaller, making them TSA-safe. Amazon sells them as well and I cannot recommend them highly enough. My only problem is that the 2oz version comes with a suction cup on the back which I have a habit of sticking to the wall of the shower in my hotel and then leaving there when I depart. Whoopsie. Good thing I could pick up a few more for free this afternoon.
In addition to needing to replace my liquids tubes it turns out that I have a habit of leaving my eye masks on the plane. I know that the airlines give you one in business or first class on the long-hauls but those are generally crappy and not so comfortable; I think that spending a few bucks is well worth it for a more comfortable sleep. I just really need to stop leaving them on the plane. In this case I needed not one but two of them as I’ve also managed to borrow – and lose – my wife’s eye mask on a recent trip having previously lost mine. Ouch.
Historically I’ve purchased the Lewis N. Clark Comfort Eye Mask
and I’ve very much enjoyed it. The one caveat is that the velour cloth is a bit heavy, feeling like a blanket on my face. If the plane is too warm that gets very uncomfortable to me. There was another option next to them on the shelf today that I’ve decided to try, the Bucky 40 Blinks Mask. It is even lighter than the Lewis N Clark one and the nose cutout seems to block out the light even better based on my limited in-store testing.
I spent WAY more time than necessary in the shop, checking out the other travel gizmos, bags and books they had in stock. I managed to avoid buying anything more than what I initially planned, though I did have to buy one extra piece to get over the $25 mark because the store was also having a 20% off sale all weekend. Still, I’m quite happy with my purchases and look forward to using them on future trips. The prior versions were always nice on my past trips.
FYI: The links to Amazon for these products are affiliate links. If you shop through them I get a few cents back. I use the Amazon links because they’re available to pretty much everyone and the prices are cheap if not the cheapest. If you’ve got a better place to buy ‘em have at it.
Posted by Seth Miller on September 6, 2012 under Lounges, News |
A new lounge is coming to the Dallas-Fort Worth airport. American Express has signed a lease to open a lounge in Terminal D near the gates of foreign carriers such as Emirates. The move apparently caught American Airlines by surprise and the carrier appealed to the airport to deny the lease application. That request fell on deaf ears, however, with the airport approving the move.
AA’s VP of Real Estate, Kevin Cox, spoke at the hearing on behalf of the carrier. He objected to AmEx getting a lower rent rate than AA pays. He also claimed that competition wasn’t needed for lounges because the AA lounge is never full. At one point he also said, "Never in our wildest dream did we anticipate that there would be a third party building a club in Terminal D." Apparently the "we didn’t think about it" defense was deemed rather pathetic, too.
This is good news for folks flying out of the terminal, with the lounge expected to open soon. Certain AmEx cardholders will receive free access while others will pay a daily rate which is reasonably consistent with other lounges: $40-75.
More news once the lounge actually opens…
Posted by Seth Miller on August 29, 2012 under frequent flyer, points, Wandering Aramean Travel Tools |
The American Express / British Airways Avios transfer bonus is back. A promo like this runs once or twice a year, it seems. Last time it was a 50% bonus on tansfers; this time around the pair are offering a 40% bonus for US customers transferring Membership Rewards points to Avios. The promo is set to run through September 27, 2012.
This promotion doesn’t suddenly make Avios an awesome redemption value across the board. That said, they do have their purpose in the points ecosystem (Check out a discussion of them in episode 6 of the PointsHoarder podcast) and getting 40% more of them for free is not such a bad deal.
Another advantage of this promotion is that the bonus points are built in to the transfer ratio rather than credited at some point after the fact. Combine that with the instant transfer timing from AmEx to Avios and it means actually booking an award with the bonus points is pretty easy to do.
Oh, and if you’re curious just how many Avios an itinerary will cost, something that their site does a horrible job of displaying when there are connections involved, check out the Avios Redemption Calculator. It will show prices across various single connection itineraries for most valid city pairs.
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Tags: American Express, Avios, British Airways, credit card, frequent flier, frequent flyer, Membership Rewards, points, promotions, tools, Wandering Aramean Travel Tools
Posted by Seth Miller on June 16, 2012 under Lounges, Review, Trip Reports, Wandering Aramean Travel Tools |
The lounge options in Honolulu are, for the most part, pretty sad. Sure, it is a US airport and most lounges in those are comparably bad, but with most passengers taking reasonably long flights to get home from Honolulu I feel like things should be better there. Alas, it seems I don’t get to make that decision.
Recently I’ve spent most of my time in the United Club in Honolulu and, quite frankly, it isn’t all that impressive. I love the big picture window views but the rest of the lounge is just a regular United Club, and that’s not a particularly great vote of confidence. On this most recent trip, however, I ended up in the JAL Sakura Lounge. It isn’t incredible by any stretch, but I definitely like it better than the United Club.
The JAL lounge is quite spacious and split up into a few different rooms. There are a variety of seating options available, making it easy to find the appropriate arrangement for different sized groups. I chose a a work carrel by the windows but there are chairs and couches available, too.
On the food & drink front, everything is self-service, including the booze, at the two stations they have set up. They could stand to improve the beer selection a bit, but overall quite reasonable. There is also soup & bread available for snacking. It isn’t enough for a full meal, really but way better than the snack mix options which seem to otherwise be the norm.
There is also a massage chair to relax and a kids play area to keep the little ones occupied.
I got in using the Priority Pass membership which came with my American Express Platinum card. One of the few benefits of that card I still enjoy.
This is hardly the best lounge ever. Overall it is probably just a mid-level option. But compared to the other choices in Honolulu, this just might be my new hangout of choice. Read more about the JAL Sakura Lounge at HNL and other lounges over at the Airport Lounge Guide.
Posted by Seth Miller on May 29, 2012 under frequent flyer, points |
Avios, the latest incarnation of points from British Airways and Iberia, certainly have received their fair share of negative reviews since the product launched. For customers who have connections or who have historically enjoyed long-haul, premium cabin awards the pricing can be a bit steep. Oh, and fuel surcharges, too, on most itineraries.
Still, if you’ve got American Express Membership Rewards points and you’re looking to convert to Avios, doing it when there is a transfer bonus in place is the smart move. The current promotion – 50% extra – runs for two more days, so it is time to get on that if you’re going to do it. Promos like this have historically happened every few months, so hopefully it’ll be back again, but there’s no guarantees there. Then again, probably not worth transferring unless there is a specific Avios award you’ve got in mind and the inventory is available. Or if you’re willing to take some risks on that front.
Perhaps the best thing about this bonus is that the bonus Avios post when the transaction goes through, not several weeks later. And the transfer from AmEx to Avios is near real-time. If the points are useful to you then this is definitely a good time to make the transfer.
Oh, and if you’re curious just how many Avios an itinerary will cost, something that their site does a horrible job of displaying when there are connections involved, check out the Avios Redemption Calculator. It will show prices across various single connection itineraries for most valid city pairs.
Tags: American Express, Avios, bonus, British Airways, credit card, Deals, frequent flier, frequent flyer, Iberia, Membership Rewards, points, promotions
