Nick predicts: 2020 vision

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Each year around the dawn of the new year, Greg makes predictions for the coming year’s news in points, miles, and loyalty. His track record is pretty darn good over the years: many of his predictions have come true. At least, many of them have. I’ll let him address his 2019 predictions whenever he makes his 2020 predictions, but I wanted to beat him to the punch with a few predictions of my own as we look to the new year in just a few days. Here are the changes/adjustments/additions we will see in points and miles in 2020. I think. Maybe. Call it my 2020 vision…..which might be overly ambitious, but time will tell.

At least one chain eliminates resort fees

Now that Expedia is punishing those properties that charge resort fees in search results, I see this game taking one of two directions: either those properties begin paying OTAs like Expedia more to bump themselves up in search results or they just start including the cost of doing business in their room rates again and they secure their spot high in results by being competitive. I don’t expect it to be Marriott, but some chain is going to realize that playing the resort fee game costs them happy customers and finally change the way they play. Maybe this is just wishful thinking, but I predict it’ll happen in 2020. It’s not going to come from Marriott, but there must be a smaller chain out there thinking about this already.

American Airlines becomes a transfer partner

American Airlines Planes

I feel less strongly about this prediction than others, but I think it’s high time that American Airlines becomes a transfer partner. Citi has slaughtered the benefits of its premium credit cards while working to enhance the value of the ThankYou program by making the Double Cash rewards transferable to ThankYou points. I initially assumed that they were going to come back with a new suite of benefits that would be announced shortly after dropping all travel protections from the premium cards. Since they haven’t done that, I have to believe it was like a sports team clearing cap space by cutting ties with an aging superstar: they must have made this move in order to have the money for something big, right? It had to have been more than 5x dining and airfare. Was it just the Double Cash? I  think they had something bigger in mind and I’d like to see it be adding AA as a transfer partner.

Loyalty programs will become more aggressive in targeting “gamers”

Chase Shutdown

The recent wave of American Airlines shutdowns has been notable from a number of standpoints: first, it is notable for the fact that it is a loyalty program closing accounts based on bank activity; second, shut downs were swift and severe – closing accounts and canceling tickets for trips in progress during the December holiday season. That second part seems to me particularly poignant: AA was sending a message that they’re not playing. We’ve recently seen IHG place limits on the points you can buy with their cash & points trick and I recently read that National is showing language in some cases that they will contact the travel administrator for your company to verify eligibility for certain coupon codes. Marriott has cut out the meeting trick for 10 elite night credits. There seems to be some tightening of the belt on the loyalty end and I have to imagine that some other folks in the industry took note of AA’s approach to getting rid of its perceived “bad apples”. I think we’ll see a similarly aggressive move from someone else in terms of a loyalty program shut down. I’m not sure what it will be, but I imagine something is coming on this front.

We’ll see another credit card offer an “entertainment” bonus category

Millennials enjoy collecting experiences; that point is evident when you look at the push from many loyalty programs to sell members on redeeming points (to poorer value) by redeeming for experiences. I’m frankly surprised that we haven’t seen much activity from issuers in terms of finding a way to entice folks to put entertainment-related spend on a specific card. My first thought is that the category feels awfully broad, but if Citi was able to pull it off with the Prestige card and Capital One can do it with the Capital One® Savor® Cash Rewards Credit Card, it can obviously be done. Further, since I was often surprised by what counted as “entertainment” (for example, it was discovered that spend at some wineries was bonused as “entertainment”), I found myself using the Prestige card during my travels more than I otherwise would have in the hopes that perhaps a borderline purchase would code as entertainment (and I certainly didn’t always check after the fact). I feel like there is a marketing opportunity here that brings a card to the top of the wallet for many consumers.

Amex will offer an awesome new benefit on the Platinum cards

Is this prediction too general? I’m not trying for an easy layup with this one, but I think we’re going to see Amex introduce some awesome new benefit on the Platinum cards in 2020. With annual fees that are reaching sky-high numbers, these cards just have to maintain some perceived value. After cutting the WeWork benefit and taking away GoGo passes, I have to imagine that Amex intends to replace those things with something exciting (I hope it is as exciting to me as it will be to their marketing team). I think the likelihood of a semi-annual Away Travel credit seems decent: the plastering of ads in a number of New York City subway stations for Away Travel tells me that they aren’t afraid to spend some money on marketing and their brand seems as though it would align with Platinum card clientele. Further, something like a $50 semi-annual credit isn’t going to cost them a ton since that won’t amount to a big enough discount on a bag to kill their bottom line and there will be a fair amount of breakage since most people aren’t going to buy from them twice a year. I’m definitely not convinced that Away Travel credit will be the new benefit, but I think it is a contender. At any rate, something good will come as a replacement for benefits lost and I imagine that Amex is going to make it something eye-catching.

Capital One will shake things up with its rumored Ultra-premium card

It’s time: Capital One has firmly taken a seat at the transferable currency table this year and made their miles cards relevant again (at least for those who can get them). It’s been rumored for a while that they would launch an ultra-premium credit card and Greg analyzed the rumored structure earlier this year. I think that the end of his post was probably right in that details on the card likely leaked with plenty of time for Capital One to make changes, so I don’t think it will exactly match what’s been rumored. I could see them going halfway and launching a card with a $300 fee that gives the expected 10x hotels and 5x airfare when booking travel through their portal and perhaps 4x on dining and entertainment. But my prediction here is that I think they will include a side benefit that we aren’t expecting that will make this card competitive with the others on the market. Capital One surprised us all when they made their points transferable and then surprised us again with transfer bonuses; I imagine they have something up their sleeve with this ultra-premium card that will generate buzz. Maybe it will be a dining or entertainment credit instead of a travel credit? I’m not sure how they’ll surprise us, but I think they’ll make a splash.

Chase or Citi will have a $150-250 card

Frankly, I’m surprised this hasn’t yet happened: as their ultra-premium card annual fees creep toward and over $500, there seems to be a massive spread between a more traditional $95 “premium” credit card and the ultra-premium monsters. Amex finally took a slice of that market with a card that features a $250 annual fee. Chase now has the Southwest Priority card at $150. I think there is room for both Chase and Citi to install a mid-range premium card and it is a slice of the market that is being under-served. Amex proves that there are certainly customers among us willing to pay $250 per year for the right suite of benefits. I think that Ultimate Rewards is rapidly losing ground to Membership Rewards and Citi is gaining ground to close the gap with both programs: I think 2020 will see some new mid-range card from at least one of these two issuers.

 

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