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Hilton Can Engender True Customer Loyalty From Amex Partnership

Effective Jan. 1, 2018, American Express will be the exclusive issuer of Hilton Honors credit cards in the United States−something that is viewed as a major win for American Express and a possible customer loyalty enhancer for Hilton.

The Amex-Hilton partnership ends a longstanding partnership whereby AmEx and Citigroup had each issued the hotel’s credit cards. More than a year ago, Hilton opened a bidding process for exclusive rights to its cards, searching for a single issuer.

AmEx had lost several card partnerships since 2015, including Costco Wholesale Corp., JetBlue Airways Corp., and Fidelity Investments.

Stellar Loyalty CEO Kevin Nix believes this is a huge win for Amex and one that can boost customer loyalty.

“In this saturated credit card market, Amex’s exclusive partnership with Hilton is a much-needed win, especially after losing the Costco business to Citigroup last year,” Nix explained to Loyalty360. “In the travel and hospitality industry, consumers are looking for satisfying and rewarding experiences over points and discounts. A co-branded relationship like this one could give both parties a fantastic opportunity to offer customers new and unique kinds of experiences that will engender true loyalty. Together, the brands are in a stronger position to win more affluent and loyal customers.”

It remains unclear as to the disposition of Citi’s Hilton card balances, however, Hilton posted a FAQ section on its site.

Citi’s co-brand credit card relationship with Hilton continues through Dec. 31, 2017. Between now and the end of the year, customers can continue to use their Citi Hilton Honors Visa card(s) normally to earn Hilton Honors Points on purchases. Customers can continue to spend on their Citi Hilton Honors Visa Cards. All of their purchases will earn points until Dec. 31, 2017, and points earned on the program will be credited to their Hilton Honors account.

Evan Magliocca, brand marketing manager for Baesman Insights & Marketing, agreed with Nix that this is a huge victory for Amex.

“This announcement is a much bigger win for Amex than it is for Hilton on the surface,” Magliocca said. “My only concern for Hilton is that it might be further restricting its consumer-base to business travelers. Business travelers are most likely the majority of its market, so it probably won’t impact them too much.”

The Hilton Honors loyalty program has been incredibly strong and vibrant for quite some time. Earlier this year, the iconic brand overhauled the loyalty program, dropping the extra H, while adding new rewards and benefits, and increasing the flexibility of points.

Aaron Glick, vice president of Hilton Honors, talked to Loyalty360 in February about the factors that prompted the changes to the loyalty program.

“It’s our deepest ambition to become the most customer-centric loyalty program in the industry,” Glick explained. “Customers are already noticing and signing up for the program in increasing numbers. In 2016, we increased enrollments by 55 percent! For over two years, we’ve made every effort to anticipate the needs of our members and listen to their feedback about the types of perks they want and how we can improve the program. Based on what we heard, we’ve made changes big and small, all the while keeping the Hilton Honors benefits our members know and love.” 

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