American Express Travel Is Right on Point for Certain Millennial Travelers

A majority of American Express’ new customers — 60 percent — in the second quarter belonged to the Generation Z and millennial generations, a metric very much noticed at subsidiary American Express Travel.

“Their mindset around culturally impactful travel is helping to shape what we do,” Audrey Hendley, president of American Express Travel, told Skift last week.

American Express Travel, the leisure travel business that handles cardmembers’ vacations and pleasure trips, became the sixth largest U.S. travel agency in 2021, overtaking Flight Centre and Internova.

That ranking is from Travel Weekly’s 2022 Power List, which pegged American Express Travel at $4.9 billion in 2021 sales. This figure was just 71 percent of the travel agency’s 2019 numbers, but parent company American Express reported that in April cardmembers’ total travel and entertainment spending, including for hotels, flights, car rentals and cruises, as well as restaurants and concerts, rose to 108 percent of the 2019 mark. That was the first time travel and entertainment spending through American Express eclipsed pre-pandemic levels.

“We have seen the demand for travel rebound faster and stronger than what we expected,” Hendley said.

One signal of that rebound is the recovery of the company’s elongated booking windows, which many travel companies saw shrink to a fraction of their pre-pandemic lengths as uncertainty and disruption took their toll.

“We’re seeing advanced bookings being very, very strong,” Hendley said. “So one of the measures that I look at is 120-plus days out from today. Versus the same time in 2019, those 120-day-plus bookings are up 40 percent for U.S. card members.”

The trip mix has reverted 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’ve seen in the past, as travel continues to surge.”

American Express Travel and Amex Global Business Travel

Many people confuse American Express Travel, the leisure travel agency that’s part of public credit card company American Express, with the larger American Express Global Business Travel ($7.1 billion in 2021 sales), which became a public company in its own right in at the end of May.

The two businesses had been part of the same parent company until 2014 when American Express spun out Amex Global Business Travel into a privately held joint venture.

The two companies have a tight relationship, and American Express owns 35 percent of Amex Global Business Travel, now formally known as Global Business Travel Group. That stake is down from 40 percent before the business travel company’s stock market debut.

Among the tie-ins, 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 wrangle sometimes-exclusive deals, including private airfares, as well as significant discounts and perks such as late checkouts or hotel upgrades.

The Value Proposition

Those deals are part of the reason many cardmembers are attracted to American Express Travel, which touts its roughly 100 years in the travel industry, despite some weaknesses (we’ll discuss further below).

American Express Platinum cardmembers, according to American Express Travel, “can enjoy exclusive savings on premium class fares on over 20 participating airlines” when booking international trips at AmexTravel.com.

Business Platinum cardmembers who book first and business class seats partially or wholly with points through American Express Travel receive 35 percent of these points back, the company said.

Luxury lodging benefits from 2,000 hotels around the world include 5x membership rewards points for Platinum cardmembers when they book on AmexTravel.com, and they can pay for these stays with points on that portal, as well.

“I book all my travel with Amex,” said Marcus Baldwin, 27, who’s in the tech industry, in a Twitter direct message. “I think the hotel prices are compelling and I like the added perks I get from the hotels program (including Fine Hotels + Resorts and The Hotel Collection). “I also think the peace of mind of dealing with a travel company that knows me based on my card membership. I like being able to use points to pay with travel also.”

Baldwin’s one cited disappointment is he would like to see American Express Travel add the ability to book Amtrak tickets.

Allen Walton, 34, the founder of FlyGuyTravel and a Richardson, Texas resident, said in a phone call that he booked around half a dozen hotel stays through American Express Travel over the last year, including an upcoming reservation at a Hilton’s Conrad Bangkok in Thailand, and he’s generally found the rates “way better” than booking directly with the hotel or Booking.com, or even compared to group rates in one instance when he was attending an event.

Travel Agents and Mix of Booking Channels

American Express Travel has around 7,000 travel agents, or travel consultants in company parlance, in 23 countries, and the planning and booking experience can be hybrid.

Hendley of American Express Travel said the agency attempts to provide a cross-channel experience so disclosing to this reporter a percentage of online or offline bookings might be misleading, and a “disservice” to each.

“So you could go online, and you could start your booking there and then you have something a little bit more complicated or something you want to talk about,” Hendley said. “And you might then say, forget that. I’m going to call you on the phone. You might start on the phone and you might 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.”

Walton, the Texas entrepreneur, said he booked a stay using the American Express Platinum card’s concierge service, but reserved the wrong dates. In trying to modify the booking, he said the customer service was “not great” because the concierge service agent told him she couldn’t cancel an American Express Travel booking, and redirected Walton back to the travel agency’s non-Platinum cardmember customer service.

On the other hand, Danielle Nuzzo, 38, a communications professional at Trust & Will in San Diego, California, raved in a Twitter direct message 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 on which hotel and even the villa number to book in the Maldives for the best sunset view.”

Nuzzo’s American Express travel consultant even came to the rescue with a visa on short notice.

“Well one thing that was overlooked was a tourist visa, which was needed for Sri Lanka,” Nuzzo said. “So the day before our flight, while in Dubai, we realized we don’t have a visa but once we contacted our agent she was able to get it sorted out 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 trip “mostly by phone and email communication.”

“I’m wondering if they have an app now that you could direct-message your agent for quicker responses?,” asked Nuzzo, who counts herself solidly as a millennial.

If there are some gripes at times about American Express Travel’s customer service, it should be pointed out that American Express took top honors for customer satisfaction in the J.D. Power 2022 U.S. Credit Card Satisfaction Study for the third year in a row.

There Are Millennials and Then There Are Other Millennials

Nuzzo’s reference to whether American Express Travel has a mobile app raises the issue of how American Express Travel relates to younger travelers.

American Express Travel doesn’t have a dedicated mobile app, and when cardmembers seek to book travel in the American Express app they get pushed to an American Express Travel mobile website.

American Express Travel’s Hendley said the company’s customers — and not just the ones who skew younger — seek experiential travel — and during the second quarter 60 percent of American Express’ new customers in the U.S. were Generation Z or millennials.

Hendley said American Express Travel found that 81 percent of its customers expressed the sentiment that it was “very important” that they feel like they are contributing to local economies when they travel.

“And this is very meaningful to people, and it’s not just what you would 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 the one size fits all.”

American Express Travel doesn’t have a great mobile experience, and it doesn’t offer short-term rentals during an era where many people are looking to travel, work, and live in new places beyond hotels. Hendley pointed out that its Fine Hotels + Resorts program offers “a lot of properties that have onsite villas, and properties that have multiple bedrooms and kitchens in different destinations.”

If American Express Travel indeed wants to appeal to customers in the current era, after the pandemic reshaped the travel environment, doesn’t it need to offer more vacation rentals at a minimum?

Calling it “an interesting trend,” Hendley said the company knows a lot of customers are interested in short-term rentals.

“We’re watching the ways people are traveling, and I just want to make sure that if we ever did that, that we made sure that we were innovating and being very differentiated in the marketplace,” Hendley said.

It would be easy to envision an American Express Travel partnership with Homes & Villas by Marriott International, which deals in higher-end vacation rentals, or Amex could find another collaborator. American Express currently offers co-branded credit cards with Marriott, Hilton, and Delta Air Lines.

Jordan Stolper, 44, an entrepreneur who lives in Denver, Colorado, uses his Amex Platinum Card for travel and American Express Travel solely for the cardmember benefits, including 5x points and perks like free breakfasts.

In terms of appealing to younger travelers, Stolper said in a phone interview that American Express Travel has “no decent mobile experience,” which would be a short-coming for travelers who live with their phones at the ready 24/7. 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 booking business class seats on Delta through American Express or using their Amex Platinum cards to earn 5x rewards are not necessarily the same ones scrolling for deals or watering plants to earn rewards in the Hopper app, or scouring comparison shopping websites like Google Travel or Skyscanner to find hotel bargains.

Who Powers What

Stolper, who co-founded a travel startup more than a decade ago, disparaged the look and feel of American Express Travel, and characterized it as “an overlay on Expedia.”

Indeed, Expedia provides the backend foundation for American Express Travel’s air, hotel, car and tour verticals while Arrivia does cruise.

American Express Travel, in tandem with Amex Global Business Travel, negotiates the deals in its airline and hotel programs. And American Express tweaks the front end user experience beyond what its booking engine partners provide.

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 newly operating, revamping or launching travel businesses.

Is this a challenge to American Express Travel?

Hendley characterized banks getting into travel as a positive trend. “It kind of buoys us and gives us confidence in what we are doing,” she said, and referenced more than 2,000 properties in Fine Hotels + Resorts, its global network of airlines and cruise partners, tours and land-based vacations, as well as 1,400 lounges in some 140 countries.

“For us, we feel like we’ve got a very strong value proposition, and we’ve got a strong infrastructure,” Hendley said. “We continue to invest and we continue to get to know our customers with every trip, and iterate and develop from there.”

Several Additional Points

When it comes to points redemption, an article in The Points Guy last year argued that there can be more value in transferring Amex rewards points to airline and hotel loyalty programs than redeeming them on AmexTravel.com.

“While you can use your points to book hotels and flights in the Amex Travel Portal, you’ll typically get more value from your American Express Membership Rewards points by transferring them to airline and hotel partners instead,” the article said. “There are exceptions to this, such as the case of last-minute travel when there is no award availability available.”

Hendley said she wasn’t familiar with the article, adding “it’s very hard to say yes or no to that.”

The American Express Travel president didn’t directly answer the points redemption question, and focused instead on what her travel agency offers in service.

When you find out from your airline that it changed your flight, and your American Express Travel team took care of everything, “so I don’t know, is that more points or less points than what you would have received if you went to the airline directly,” Hendley said.

“In this case, I would probably venture you’re getting better value in American Express because their [the airline’s] value proposition is around the fares,” and American Express Travel is providing so much more, she said. “So that’s why it’s hard to do a straight line comparison.”

There’s another part of American Express Travel’s infrastructure that Hendley frequently mentions — the company’s 7,000 travel consultants.

With plenty of holiday travel looming, Hendley said the travel industry has made huge commitments to decreasing the disruption that made summer travel so difficult for many.

“We say this to customers all the time: You always have to have plan B,” Hendley said. “What happens if … and that’s of course where your traveling comes in. Your travel consultant is there to help you with the plan B because things don’t go to plan. So let’s have a plan when it doesn’t go to plan.”