A majority of American Express’s new customers — 60 percent — in the second quarter were Generation Z and Millennials, a stat that stood out at its subsidiary American Express Travel.
“Their mindset around travel with a cultural impact helps us shape what we do,” Audrey Hendley, president of American Express Travel, told Skift last week.
American Express Travel, the leisure travel company that handles cardholders’ vacations and pleasure trips, became the seventh largest travel agency in the US in 2021, surpassing Flight Center and Internova.
That ranking comes from Travel Weekly’s 2022 Power List, which put American Express Travel at $4.9 billion in 2021. This figure was just 71 percent of the travel agency’s 2019 numbers, but parent company American Express reported that in April, cardholders’ total spending on travel and entertainment, including hotels, flights, car rentals and cruises, as well as restaurants and concerts, rose to 108 percent from the 2019 figure, which marked the first time travel and entertainment spending via American Express surpassed pre-pandemic levels.
“We’ve seen demand for travel pick up faster and stronger than we expected,” Hendley said.
One sign of that rebound is the recovery from the company’s stretched booking periods, which have seen many travel companies shrink to a fraction of their pre-pandemic lengths as uncertainty and disruption took their toll.
“We see that advanced bookings are very, very strong,” Hendley said. “So one of the measures I’m looking at is 120-plus days from today. Compared to the same time in 2019, those bookings over 120 days are up 40 percent for U.S. card members.
The travel mix has returned to pre-pandemic levels of 70 percent domestic and 30 percent international, she said, adding: “And that’s kind of back to what we would have seen in the past as travel continues to increase. “
American Express Travel and Amex Global Business Travel
Many people confuse American Express Travel, the leisure travel agency that is part of the public credit card company American Express, with the larger American Express Global Business Travel ($7. Read also : Guide to Business Entities: Which is Right for You?.1 billion in 2021 sales), which eventually became a standalone public company. from May.
The two companies were part of the same parent company until 2014, when American Express transformed Amex Global Business Travel into a privately held joint venture.
The two companies have a close relationship and American Express owns 35 percent of Amex Global Business Travel, now formally known as Global Business Travel Group. That stake has fallen from 40 percent before the corporate travel company’s stock market debut.
Among the links, American Express licenses its brand to the business travel group, and American Express and the Global Business Travel Group conduct joint negotiations with airlines, hotels and car rental companies to negotiate some exclusive deals, including private flights. such as significant discounts and benefits, such as late checkouts or hotel upgrades.
The Value Proposition
Those deals are part of the reason many cardholders are drawn to American Express Travel, which praises its roughly 100 years in the travel industry, despite some weaknesses (we’ll discuss it further below). To see also : Book Review: Ackerman, Chomsky and Prashad on Afghanistan, America and the Taliban.
American Express Platinum cardholders can “exclusively save on premium class fares on more than 20 participating airlines” when booking international travel on AmexTravel.com, according to American Express Travel.
Business Platinum cardholders who partially or fully book first and business class seats with points through American Express Travel will receive a refund of 35 percent of those points, the company said.
Luxury accommodation benefits from 2000 hotels around the world include 5x membership points for Platinum cardholders when they book on AmexTravel.com, and they can also pay for these stays with points on that portal.
“I book all my trips with Amex,” Marcus Baldwin, 27, who works in the tech industry, said in a direct message on Twitter. “I think the hotel prices are attractive and I like the extra benefits I get from the hotel program (including Fine Hotels + Resorts and The Hotel Collection). “I also think the peace of mind of dealing with a tour company that knows me based on my card membership. I like being able to use points to pay with travel as well.”
Baldwin’s only disappointment is that he would like to see American Express Travel add the ability to book Amtrak tickets.
Allen Walton, 34, the founder of FlyGuyTravel and a resident of Richardson, Texas, said in a phone call that he has booked about six hotel nights through American Express Travel in the past year, including an upcoming reservation at a Hilton’s Conrad Bangkok in Thailand, and he generally found the rates “much better” than booking directly with the hotel or Booking.com, or even compared to group rates in one case when attending an event.
Travel Agents and Mix of Booking Channels
American Express Travel has approximately 7,000 travel agents, or travel consultants in business jargon, in 23 countries, and the planning and booking experience can be hybrid. This may interest you : The most unbroken sports records still being chased: Jerry Rice, Wilt Chamberlain, Wayne Gretzky stand out.
Hendley of American Express Travel said the agency is trying to provide a cross-channel experience, so revealing a percentage of online or offline bookings to this reporter could be misleading and a “disservice” to anyone.
“So you could go online and start your booking there and then you have something more complicated or something you want to talk about,” Hendley said. ‘And then you might say, forget that. I’m going to call you on the phone. You could start on the phone and you could say, you know what? I need to look around and see what other hotels are in the location, and you go back to the online one.”
Walton, the Texas entrepreneur, said he booked a stay with the American Express Platinum card concierge service, but booked the wrong dates. When he tried to change the booking, he said the customer service was “not great” because the concierge service told him they couldn’t cancel an American Express Travel booking, and returned Walton to the agency’s non-platinum customer service team.
On the other hand, Danielle Nuzzo, 38, a communications professional at Trust & Will in San Diego, California, was elated in a Twitter direct post about her experience booking her honeymoon, including using Amex points for the flights, through American Express Travel six years ago.
“They had a lot of knowledge of specific hotels and villas to book in Sri Lanka and the Maldives,” Nuzzo said. “They were super helpful about which hotel and even villa number to book in the Maldives for the best sunset view.”
Nuzzo’s American Express travel advisor even came to the rescue at short notice with a visa.
“Well, one thing that was overlooked was a tourist visa, which was required for Sri Lanka,” Nuzzo said. “So the day before our flight, while we were in Dubai, we realized we didn’t have a visa, but once we got in touch with our agent, she was able to arrange it very quickly and we were on the flight the next day. “
Nuzzo said the couple communicated with the American Express Travel agent for the honeymoon “usually via phone and email communication.”
“I wonder if they now have an app that lets you message your agent for faster responses?” asked Nuzzo, who considers herself a millennial.
If there are occasional complaints about American Express Travel’s customer service, it should be noted that for the third year in a row, American Express took top honors for customer satisfaction in the J.D. Power 2022 US Credit Card Satisfaction Study.
There Are Millennials and Then There Are Other Millennials
Nuzzo’s reference to whether American Express Travel has a mobile app raises the question of how American Express Travel compares to younger travelers.
American Express Travel does not have a dedicated mobile app, and when cardholders want to book a trip in the American Express app, they are redirected to an American Express Travel mobile website.
American Express Travel’s Hendley said the company’s customers — not just those who are younger — are seeking experiential travel — and that in the second quarter, 60 percent of American Express’s new customers in the U.S. were Generation Z or millennials. .
Hendley said American Express Travel found that 81 percent of its customers felt it was “very important” that they feel they are contributing to the local economy when they travel.
“And this makes a lot of sense for people, and it’s not just what you might think in terms of millennials,” she said. “It’s across the board in terms of what customers want. They want to be in local places, they don’t want one size fits all.”
American Express Travel does not have a great mobile experience and does not offer short-term rentals in an era when many people are looking to travel, work and live in new places outside of hotels. Hendley pointed out that the Fine Hotels + Resorts program “offers many properties with on-site villas and properties with multiple bedrooms and kitchens in various destinations.”
If American Express Travel does indeed want to appeal to customers in the current era, should it have reshaped the travel environment after the pandemic, then not at least offer more vacation rentals?
Hendley called it “an interesting trend” and said the company knows many customers are interested in short-term rentals.
“We look at the way people travel, and I want to make sure that if we ever did, we made sure we were innovating and very differentiated in the market,” Hendley said.
It would be easy to envision an American Express Travel partnership with Homes & Villas by Marriott International, which deals with more expensive vacation rentals, or Amex could find another employee. American Express currently offers co-branded credit cards with Marriott, Hilton and Delta Air Lines.
Jordan Stolper, 44, an entrepreneur living in Denver, Colorado, uses his Amex Platinum Card for travel and American Express Travel exclusively for cardholder benefits, including 5x points and perks like free breakfast.
In terms of attractiveness to younger travelers, Stolper said in a phone interview that American Express Travel “doesn’t have a decent mobile experience,” which would be a shortcoming for travelers who live 24/7 with their phones at the ready. But he cautioned that short-term rentals aren’t necessarily a make-or-break feature.
Millennials and Generation Z are “not a market segment — it’s an age range,” Stolper said. “Not all millennials shop and think alike. Not all millennials want to stay in Airbnbs.”
So Gen Z and millennial travelers who book business class seats with Delta through American Express or use their Amex Platinum cards to earn 5x rewards aren’t necessarily the same ones who scroll for deals or water plants to earn rewards in the Hopper- app, or searching comparison websites. like Google Travel or Skyscanner to find hotel deals.
Who Powers What
Stolper, who co-founded a travel startup more than a decade ago, disdained the look and feel of American Express Travel, characterizing it as “an overlay on Expedia.”
Indeed, Expedia provides the backend base for American Express Travel’s air, hotel, car and tour verticals, while Arrivia does cruises.
American Express Travel is negotiating deals in its airline and hotel programs with Amex Global Business Travel. And American Express tailors the front-end user experience beyond what its booking engine partners offer.
More Banks Launching Travel Portals
A flurry of financial institutions including Capital One with Hopper; Chase, with the acquisition of Frosch, and Citi with Booking.com, are new businesses operating, innovating or launching travel companies.
Is this a challenge for American Express Travel?
Hendley characterized bank travel as a positive trend. “It kind of gives us support and gives us confidence in what we’re doing,” she said, referring to more than 2,000 properties in Fine Hotels + Resorts, the global network of airlines and cruise partners, tours and land-based vacations. as 1,400 lounges in some 140 countries.
“For us, we feel like we have a very strong value proposition and we have a strong infrastructure,” Hendley said. “We continue to invest and we continue to get to know our customers on every journey, repeating and developing from there.”
Several Additional Points
When it comes to redeeming points, an article in The Points Guy last year claimed that transferring Amex Rewards Points to airline and hotel loyalty programs may have more value than redeeming them on AmexTravel.com.
“While you can use your points to book hotels and flights on the Amex Travel Portal, you typically get more value from your American Express Membership Rewards points by transferring them to airlines and hotel partners instead,” the article reads. “There are exceptions to this, such as the case of last minute travel when no award is available.”
Hendley said she was not aware of the article, adding, “It’s very hard to say yes or no to that.”
The president of American Express Travel didn’t answer the question about redeeming points directly, instead focusing on what her travel agency offers.
When you hear from your airline that your flight has changed and your American Express Travel team has taken care of everything, “so I don’t know, is that more points or less points than what you would have received if you went directly to the airline? said Hendley.
“In this case, I’d probably bet you’re getting more value in American Express because their [airline’s] value proposition is around fares,” and American Express Travel offers so much more, she said. “So that’s why it’s hard to compare a straight line.”
There’s another piece of American Express Travel’s infrastructure that Hendley often mentions: the company’s 7,000 travel consultants.
With plenty of leisure travel looming, Hendley said the travel industry has made huge commitments to reduce the disruption that made summer travel so difficult for many.
“We say this to clients all the time: You should always have a plan B,” Hendley said. “What happens if… and that’s where your travel comes into play, of course. Your travel advisor is there to help you with plan B because things don’t go according to plan. So let’s have a plan if things don’t go according to plan.”
