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Who’s in Your Wallet? Credit CardPoints Remain a Challenge for TravelAgentsby Richard D’Ambrosio (/tmrsearchresults?st=1&sr=Richard D’Ambrosio) / July 18, 2019

With more and more credit card holders earning points and redeeming them for travel, how and when an advisor supportsthese clients can be tricky. Photo: Shutterstock

Nearly two out of three Americans plan to use credit card points to pay at least a

portion of their summer vacation this year, according to a new survey. When those

cardholders are travel agent clients, frequently that means the agent forgoes a portion

of their income on that booking, making serving these clients a difficult choice.

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According to a report from CompareCards.com, one out of five credit card holders will

use points to pay for at least half of their summer travel bills, while the average

cardholder expects rewards will cover 11%-25% of their costs.

“If people are trying to use points on hotels, flights, it really is difficult to make it

worthwhile for you as a travel advisor,” said Jacob Marek, who owns IntroverTravels,

an agency in Sioux Falls, South Dakota.

Points are so important to some clients of Hermes Travel, in Astoria, New York, that 25

years ago, the company saw a steep drop in bookings from loyal clients, said agent

Nancy Damianeas.

“Regular clients who came in every year for their summer travel, weren’t calling,” she

remembers. “We called them up and said, ‘We haven’t heard from you in a year, two

years.’ They kept mentioning using their American Express points.”

Hermes decided to work with an American Express rep network agency to help their

clients redeem their rewards points so that Hermes could still purchase their

customers’ tour packages and hotels, and salvage some of their sales. “That decision

saved a whole segment of our business,” Damianeas said.

Indeed, some 75% of cardholders told CompareCards that their rewards affect their

vacation plans, in terms of where they travel, how they will get there, or where they

might stay when they arrive.

About a year ago, Matthew Exline, owner of Matthew Exline Cruise Planners, in

Ormond Beach, Florida, lost a whole potential sale to Japan because the client wanted

to use points to upgrade her airline ticket to business class.

“In the process of qualifying her for the trip, she really got hung up on using points. It

seemed to impact every aspect of our discussions back and forth,” Exline said. “In the

end, she decided to not only use her points to upgrade her airfare, but to book the

whole thing on her own.”

According to CompareCards, which surveyed more than 1,000 Americans, Millennials

(72%) and travelers in the Northeast (73%) are the most likely to use credit card points

to pay for some of their summer vacation. Midwesterners are least likely to use

rewards points, at 46%.

(CompareCards, which is owned by LendingTree, commissioned Qualtrics to conduct

an online survey of 1,036 Americans, fielded Apr. 2-17, 2019. The margin for error for

all respondents is +/- 3%.)

Protecting commissions

Credit card point redemption with American Express has grown so prevalent that

consortia, host agencies and franchises have all formed partnerships with American

Express to help its cardholders redeem points on trips booked by agents, but still

protect agent commissions.

At Travel Leaders Group, the Apex program allows agents to book their clients’ air, rail,

cruise, hotel/resort, and tours purchased on American Express’ Premier Rewards Gold,

Business Gold Rewards, Platinum and Business Platinum cards. (The program does not

include co-branded cards like Delta Skymiles.)

After the trip is charged to the client’s American Express card, points can be used on all

or part of the trip using the Pay with Points tool, with the added ability for clients to

elect a commissionable upgrade to a higher suite category, or a trip extension.

Since Travel Leaders launched its Apex program about a year ago, some 2,500 Travel

Leaders Network advisors have completed training to be certified for the plan, and

have processed more than 2,600 Membership Rewards point redemptions for

UK's leading river cruise line, earn lifetimecommissions(https://www.rivierarivercruises.com/agency)

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The law of numbers – more travelerson one trip means morecommissionable sales – should work toan agent’s advantage. But offeringinsurance to group travelers isn’t sosimple.

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Considered by many to be the pinnacleof networking groups, BNI could be atravel agent’s strongest source forsales referrals – as well as personal andprofessional growth.

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American Express Gold and Platinum cardholders, according to Travel Leaders

(https://www.travelmarketreport.com/articles/Headquarter-Happenings-Travel-

Leaders-Wants-Its-Members-to-Get-On-Board-With-American-Express-Program).

Michael Batt, chairman of Travel Leaders Group, recently told attendees at this year’s

annual EDGE conference that he believes the Apex program could be “a phenomenal

source of new revenue and profits” for agents.

Host agency Avoya Travel and travel agency franchise network Cruise Planners are

part of the American Express Rep network, and offer similar benefits for their agency

owners and their clients.

“If you find you are losing a lot of business from Amex cardholders, consider joining a

group that’s part of the Amex ecosystem,” Exline said. “If you are losing a lot of

business to Visa and Mastercard [cardholders], do your best to save the sale by

offering the best price and service. But at the end of the day, if someone is determined

to do it themselves with points, they’re probably too much of a control freak to be a

long-term client anyway.”

Visa and Mastercard point programs grow more popular

While American Express is making it easy for some agencies to profitably book

vacations with reward points, American Express cardholders only represented about

26% of global purchase transactions in 2016, according to industry experts, The Nilson

Report. Issuers of Visa and Mastercard cards dominate the landscape.

Some of the most popular travel rewards cards with consumers include the Chase

Sapphire Preferred Card, Capital One Venture Rewards Credit Card and the

Barclaycard Arrival Plus World Elite Mastercard. CompareCards lists these cards

among the best general-purpose rewards credit cards because they aren’t exclusive to

one hotel chain or airline, and they free up the cardholder to shop for the best deal

from any supplier.

Because redemption programs vary, Damianeas finds it crucial to identify what specific

card a client is using. If it’s a co-branded airline card, “we send them to the airline

directly. We can only handle their hotels.”

She finds the Capitol One Venture card one of the easiest to work with, because like

the American Express Pay with Points program, the client can purchase their travel

elements and afterwards choose which to redeem their points on. “You can erase it, no

matter where you bought the travel service,” Damianeas said.

Andrea da Rosa, account manager, Balboa Travel, in San Diego, uses a Capitol One

Ventures card to earn and redeem points for herself. “It’s the easiest in the industry.

With a click, you can select your vacation through whomever you want to purchase it

through. If you want to maintain that relationship with an advisor, you can.

“And if a flight is canceled, or there is some other kind of issue, the tickets are treated

the same way as if I purchased them from my travel advisor. My advisor can support

me.”

Find the right clients to make it work

Agents who aren’t part of a network offering a program like Travel Leaders does can

still make servicing clients profitable and worth their time, said Marek at

IntroverTravels, part of Virtuoso. Clients who have large quantities of credit card miles

and points frequently are high net worth individuals who still need and want a travel

advisor to take care of their vacation planning.

For example, Marek has a client who owns a popular District of Columbia bakery, and

frequently travels internationally, often including his family and friends. “He loves fine

hotels, traveling, and dining well, so he racks up hundreds of thousands of points by

putting most of his business expenses on his business card,” Marek said.

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The controversial law could reclassifyindependent travel advisors as full-time employees, which could force41% of them to end their agent careersor leave the state.

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Since Marek met the client in 2018, the customer has traveled to India and Costa Rica,

just got back from Jordan, and is going to Vietnam and Cambodia this fall.

“He visits Virtuoso’s Best of the Best catalogue all the time,” Marek said, bookmarking

his dream hotels and things he wants to do. “Then, he will use credit card points to

book his flights, send me an Excel spreadsheet with all of the details, and ask me to fill

in the gaps with hotels, tours, activities,” Marek said.

“He’s so organized, he makes it easy, why wouldn’t I take him on. Yes, there’s no

commission in the air for me, but a 10% commission on his hotels, suites, villas, is worth

it,” Marek said. “And he needs me because everything I do takes up time he needs to

run his business and live his life.”

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