Deal with Amex deemed big win for Travel Leaders

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Travel Leaders Group CEO Ninan Chacko said the redemption of Membership Rewards points is a new revenue stream.
Travel Leaders Group CEO Ninan Chacko said the redemption of Membership Rewards points is a new revenue stream. Photo Credit: Jamie Biesiada

LAS VEGAS -- Analysts called Travel Leaders Group's (TLG) partnership with American Express that enables its agents to service Gold and Platinum card members with exclusive travel discounts and amenities a big win for TLG, albeit a surprising one.

The program, dubbed Apex, was revealed at the Travel Leaders Network 2018 EDGE conference at Caesars Palace.

"It certainly is a big win for [TLG] in terms of the potential audience that this could provide for members of their agency network, and it's a big value-add to be associated with [TLG]," said Henry Harteveldt, founder of Atmosphere Research Group.

Under the program, personal and business Gold and Platinum card members will be paired with agents who can book a number of exclusive offers through the Travel Collection by Travel Leaders Group, including flight discounts, hotel amenities and more.

Harteveldt did find it "notable" that American Express outsourced services to TLG when it operates American Express Travel and a network of retail agencies.

According to American Express vice president of corporate communications Charlotte Fuller, American Express Travel will continue offering travel services to cardholders, including Centurion card members, who are not included in the TLG program.

"TLG will provide us with additional channels to bring out unique travel benefits and services to more card members," she said.

Amex will help TLG agents compete in a crowded marketplace, said Roger Block, president of Travel Leaders Network.

"When I was an agency owner, I would have killed for the opportunity to offer lower prices or offer more shipboard credits than my competitors without having to lower or rebate my commissions," he told agents. "I don't believe there's anyone in this room that doesn't want that advantage, and with our new partnership with American Express, that's what you get."

Stephen McGillivray, TLG's chief marketing and communications officer, agreed, calling Apex "as big of a game-changer for my business as I can think of."

Any TLG agent can participate for free after completing online training that takes about eight hours. They will also be trained in helping clients apply for American Express Gold or Platinum cards and will earn commission when clients redeem their Membership Rewards points, something also covered in the training.

Industry consultant Jack Mannix said the program will likely be a win for TLG, assuming it is promoted heavily enough to card members.

"I'd take it," Mannix said. "If I was one of the Travel Leaders franchisees or [agents], I'd be happy adding one more thing to my arsenal of marketing tools."

TLG CEO Ninan Chacko cited several opportunities the program offered agents, including being able to better serve their Gold and Platinum card customers, new revenue streams from Membership Rewards redemptions and from signing up card members and the potential to gain clients that might not have worked with an agent before.

"All of a sudden, it opens up a vista of new opportunities that I think are purely incremental to what they do today and actually coexist with what they do today," Chacko said.

More than 200 agents have signed up to beta-test the program. Chacko said testing is in its earliest stages, but the program will roll out to more agents over time. 

Lindsay Boyd, managing member and founder of Tamandare Travel in Wood Dale, Ill., is part of the beta test. He said the ability to do things like redeem Membership Rewards elevates the services he already offers.

"This gives me the ability to continue to offer my client the high-quality services that they have been accustomed to with me and put them into another league moving forward," Boyd said.

Kamen Blackwell, president and CEO of Jacksonville, Fla.-based TripVax, is also involved in the test. He said the prestige that comes with the American Express brand is attractive to agents.

"That says a lot about who you are and just the level of service [clients] can expect from you," he said.

Chacko declined to disclose the financial details of the partnership between TLG and American Express, only saying it is a multiyear partnership with details still left to sort out.

"There's a long row to hoe ahead, lots of new ground to cover," he said, "but I'm really delighted."

Case in points 

On Thursday morning, Block, Chacko and Catherine Keane, vice president of membership rewards, held a fireside chat in front of agents. One of the topics they focused on was agents' ability to use their clients' Membership Rewards points to book travel.

Chacko pointed to the benefits of using Membership Rewards, including that it could spur clients to purchase even more travel.

Travel Leaders Network president Roger Block said the Amex card program gives agents an edge in a competitive marketplace.
Travel Leaders Network president Roger Block said the Amex card program gives agents an edge in a competitive marketplace. Photo Credit: Jamie Biesiada

According to Keane, American Express' loyalty program is the largest in the world and the oldest, launched 26 years ago. Of cardholder benefits, she said the Membership Rewards program is the most important to customers.

"The psychology behind points is very fascinating," Keane said. "People don't spend points the way they spend cash. Personally, I'm not going to use my cash for a first-class ticket. I can't justify that [while] trying to save for other things. But if I have enough points to buy a first-class ticket, that's a whole different story."

According to Keane, people on average spend around 30% more in points transactions than cash transactions, and they don't regret the extra spending.

TLG agents can help clients use their points for things like upgrading flights, adding another family member to a trip, or upgrading their cabin class on a ship, she said. She encouraged agents to incentivize their clients to spend more and take more trips using their Membership Rewards points.

Keane also addressed the demographics of American Express' card member base. Gold Card members in particular tend to be millennials, and they want convenience, she said. Using points for travel is also popular among that demographic.

During the talk, Block said the program's introduction had been delayed somewhat after it was announced to agents last October.

In response, Chacko said it was an "extraordinarily complicated undertaking" involving TLG, American Express, suppliers, agents and card members. Once TLG realized it needed to take some extra steps to implement the program before announcing it, Chacko said, the company slowed down the process, something he called an "appropriate" delay.
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Correction: Kamen Blackwell is the president and CEO of TripVax.

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