I don’t believe that Chase will ever make money on its Sapphire Reserve product. They’re effectively spending all of the interchange on rewards and benefits, and any margin must be coming from customers paying an APR — but with the high income, high credit, and high assets Chase reports about Sapphire Reserve cardmembers you’d expect even that to be a smaller group of customers than usual.
So it’s not surprising that we see the bank looking for cost savings. And a logical place to look is limiting lounge access. They’re still offering Priority Pass Select. They’re still offering unlimited lounge visits. But as reported by Bhatdj on reddit they’re going to limit cardmembers to two guests on each visit. (HT: @IadisGr8)
That means no more 35 guests entering a lounge on a single Priority Pass card and no more bringing in 19 school kids.
At the same time the specific limit of two guests surprises me.
- It’s going to be tough inconvenient for families, who can still get an authorized user card with Priority Pass for a fee. Still I’d have expected a 3 or 4 guest limit.
- Because Chase has seen unlimited guests as a differentiator from American Express Platinum which expanded to offer 2 free guests last year in response to Chase’s own generous benefit.
Last week the Wall Street Journal ran an error-ridden story about airport lounge overcrowding. And there’s no question that use of Priority Pass-eligible lounges shot up as a result of Sapphire Reserve popularity. Here are the guest numbers – mostly via Priority Pass – by month for The Club at PHX:
This isn’t going to make much difference, most people don’t bring in many guests, but it will save Chase some money at the margin.
Similarly, there are two other changes being made both marginal — the money they give back via $300 travel credit each year has been earning 3 points per dollar on travel. It won’t going forward. Those 900 points aren’t huge, but multiplied across all cardmembers is a savings along the lines of the old story about American Airlines removing an olive from salads in first class.
Finally as with other cards they’re eliminating Price Protection from Sapphire Reserve.
These changes go into effect August 26.