American Express confirmed that Priority Pass cards they provide to customers will no longer provide a dining credit at airport restaurants effective August 1.
That naturally leads to a great deal of speculation about whether other card issuers will do the same thing. Priority Pass cards for airport lounge access (and increasingly, lounge alternatives) have become much more common as a premium credit card benefit over the past three years.
Among the many cards that come with Priority Pass, there’s Citibank’s Prestige card; Chase’s Sapphire Reserve, Ritz-Carlton, and JP Morgan Reserve; US Bank Altitude Reserve; and City National Crystal Visa Infinite.
Timeline Steaks, Denver Airport
City National’s customer base is primarily high net worth investment clients. It doesn’t seem like there’d be a reason to skimp on them. US Bank limits annual Priority Pass lounge visits already. Questions have largely centered on plans from Citibank and Chase.
On the one hand, American Express has laid out an attactive way to cut costs. On the other hand, continue to offer full Priority Pass access could be a competitive differentiator (although possibly only for customers who would ‘use the benefit too much’ and be unprofitable).
Talking to multiple sources at Citibank it does not appear that they’re currently planning to eliminate Priority Pass restaurant visits from the Prestige card.
Chase offered me a statement,
Sapphire and The Ritz-Carlton Cardmembers can continue to use their Priority Pass benefit as they have been. No updates to share at this time.
Chase’s language concerns me, because the exact same statement “can continue to use their Priority Pass benefit as they have been” could be made by American Express, since their change does not go into effect until August 1. In fact American Express could have made the full exact same statement last week.
It’s understandable that they’d offer something fairly milquetoast,
- If Chase is making the change, they don’t want to announce it yet.
- If Chase isn’t making the change, they don’t want to lock themselves out of deciding to do so (especially now that American Express has announced it)
Tuna burger, Bobby Van’s New York JFK Terminal 8
Chase’s statement doesn’t provide much comfort. However I do think that if Chase had decided to make this change and wasn’t ready to share it they might say “no updates to share at this time” but wouldn’t offer that customers can continue to use the benefit as-is. I could be over-reading but I don’t think that I am. We’ll have to wait and see, I suppose, whether they make a decision one way or another in the future.
Did you contact PP to see what they say? I assume they’d know.
If they eliminate the benefit, say, halfway through your membership year, can you get a pro-rated refund of your annual fee?
Give it away as a promotion, demonstrate the value, then charge-for. Solid model by Priority Pass.
Less and less reason to keep the Amex Platinum all the time . . . yet they keep raising the price.
My final year of being an Amex sucker.
There is surely a happy median between “cut off benefits” and “allow unlimited abuse,” right?
Thank you so much for this reporting, Gary. And, contrary to the censorship that Tiffany (and by extention, Ben) is promoting at OMAAT against any criticism of their close $$$ sources/relationships, I really appreciate you allowing this free dialogue against stupid and unethical choices from these banks. I really think that there is a potential win-win for both customer and bank.
**extension :))
PP makes the “vig” one pays for there card worth it. In spite of Expedia taking over Ultimate Awards it’s still out does Amex.
Having said that if they too eliminate the restaurant benefit one has to revisit renewal. yes ?
Personally, over the last two years I have used PP restaurant benefit only once while flying through LA. Ttypically, I do not have time or would have a meal somewhere else. Not much a loss in my book.
Amex card holders have been itchy to leave Amex. This is a golden opportunity for the other banks to poach those customers.
dh
Sure hope Chase keeps the PP restaurant benefit. Only used this (restaurant benefit) once at DCA, but it sure beat the heck out of a plain old airport lounge.
@Jay, you know Gary, Ben and Tiffany are one in the same…
My wife and I have used the restaurant benefit on occasion—the PF Changs at LAX is a great deal and we make sure to leave a heavy tip so the restaurant staff know how much we appreciate the arrangement. But I sense the restaurant benefit is being abused by a minority of customers—every time we’ve eaten at a PP restaurant there has been always some group of customers arguing over how much they’re ‘entitled’ or openly attempting to game the system. (“this is why we can’t have nice things” is what my wife usually mutters as we notice these clowns). So I’m not sure how we ‘keep’ the PP benefit while some customers work over card issuers to the detriment of the average user. It seems almost inevitable these sorts of benefits will fade given this sort of behavior.
That said, I’m also sensing a near-constant erosion of credit card benefits over the last few years…whether these benefits are providing ‘outsized value’ to customers or not. A card issuer debuts a premium card with a lofty benefits package….then slowly pulls back over time while attempting to retain customers.
Gary: Is this an intentional business model or just an adjustment over time as the reality of providing these benefits begins to unfold on the balance sheet? Or do customers only have themselves to blame for using/abusing the benefits in a manner that was not originally intended? I see both sides…..
Did anyone believe this was a sustainable business model, seriously? Maybe the freeloading gluttons and the boozers brought it to a premature end, but this was never going to work in the long term.
@Nate
“every time we’ve eaten at a PP restaurant there has been always some group of customers arguing over how much they’re ‘entitled’ or openly attempting to game the system.”
I was at PDX over the weekend and I actually witness quite the opposite. I was at Capers Cafe Le Bar and the waitress over there was actually encouraging people to abuse the system. There was a table with two young people and one was presenting the card and the waitress looked at the other person and asked if she has the card too and explained that they can claim each other as a guest and have $56 worth of food per person and went on about how she was serving a table with 3 guys and she was able to get each guy to claim 2 others on the table as guests so each can claim $84 worth of food per person. I bet those guys didn’t really had $84×3 worth of foods/drinks but restaurant probably charged the PP as much. The whole thing wasn’t designed to be sustainable. Too easy to game.
To one of the earlier posts, it is legit fascinating from a business strategy perspective. When they started offering restaurants, it was literally out of left field. I’m sure someone will point to a thought piece if I’m wrong, but I don’t recall seeing anyone pontificate about restaurant credit being in the future. But, they did it and suddenly people became much more interested in PP than they were when they represented third tier lounges in second tier cities. Now, they’ve shown something of value. Imagine what they can command if consumers prove that they actually care and would select one card over another because of PP benefits. Hat tip, PP. I didn’t think you had it in ya.
How will this be enforced? How will the restaurants know which card our PP comes from? Or will we able to swipe the PP, but AMEX then bills us for it?
@DaveC that’s very likely what will happen. You’ll swipe your card and get a bill from Amex.
@Paolo Absolutely. This was Priority Pass’ way to enter airports where they did not currently have a lounge. Rather than give the $28pp to that lounge, they just give it to a restaurant partner instead.
the annual fee has increased from 450 to 550.
restrict access to amex lounge.
cut PP restaurant benefits.
i only use it once this year… (i have status at 7 airlines). you just have to travel to/from the right airports to utilize these benefits..
example, if I fly B6 at JFK. nothing!
One problem is, when the bill is less than $28, some PP users are not tipping the wait staff.
I used the benefit 14 times last year and 7 thus far in 2019.
Any time there is an unlimited benefit, companies accept that there will be power users who cost a lot. This is all part of the budget. In this situation, a smart company will fine-tune the benefit so that the average user still ascribes value while curtailing “abusers.” An example is the way Citi made it easier for casual users to book the 4th night free benefit (online reservations) while strictly limiting it to twice a year and reducing the value for power users and points-collectors. A stupid company will cut the benefit out entirely so they look stingy on a card that has a $550 annual fee. And then complain to wall street about “unsustainable competition.”
At a personal level, I’ve never used the restaurant benefit. However, it makes Amex look cheap, and they have spent an awful lot of money trying to be the premium card issuer.
Gary, have you eaten at Bobby Van’s? I was going to give it s try but I know Corona beach house inIA has crappy food and I don’t eat at PF Chang’s . So not sure I care.
@Beachfan – well, it’s airport food but they make a good tuna burger and the chili is quite nice in my opinion
Let me get this straight. I am supposed to get the premium card because of the benefits. But if I use the benefits, then I am an “abuser”. In psychological terms, isn’t this a classic “double bind”. Moreover, I am expected to not use the benefits for the common good.
Maybe I should just get rid of my premium cards for the following reasons:
(1) Using the benefits make me feel guilty.
(2) They are a temptation for the sins of “greed” and “gluttony”.
(3) In Marxist terms, I do not want to be an “evil capitalist” abuser of the benefits.
(4) Finally, I am concerned about the “sustainability” of the credit card benefits. Currently, sustainability is per se good.
PDX is the culprit. The waitress at Capers was trying to get the wife and I to take a bottle of wine with us that I declined. We each have a card but we only used 1. My 6 month old baby boy was used as a guest though : ) Total $84. The other lounge/market Capers Market (now closed) gave us $84 credit each. I know we are guilty, or are we? Total $168. We then went to House Spirits Distillery and did the flight of whisky and Vodka which was nice. Total $56. In all we used $308 in credit with our PP card. Not sustainable. Now for all you haters out there, we only did what was allowed. The cards should definitely be limited to 1 use per day. I have PP cards from Chase Ritz Carlton, Amex Aspire, Amex Ascend and Amex Marriott Bonvoy Business. The only PP card I carry with me is the Ritz.
@beachfan
The Harris salad at Bobby Van’s is very good – big pawns, avocado and eggs on a bed of greens if IIRC. Huge size as well.
At MIA try the land side Viena at the 7th floor of the airport hotel – much better than crappy Corona Beach House. In fact both landside restaurants at Concourse E is convenient because D and E are next to each other. If MIA is your departure pt then use the landside ones.
@tjp1974: I really do not like what you did here. You threw a lot of people under the bus:
(1) You threw Capers under the bus. Maybe the credit card companies/Priority Pass will investigate Capers now.
(2) Capers in PDX is not a big place. It should not be hard to find the waitress/service people that was/were trying to help customers use Priority Pass benefits. Maybe she/they will get fired or reprimanded. Waitresses usually live hand to mouth. Does she really deserve punishment for helping her customers.
(3) Maybe Priority Pass will investigate all guest charges at Capers and try some charge-backs to credit cards. If they do, you threw these people under the bus also.
“Lose lips sink ships” so they say. The specificity of your comment is mean spirited in my opinion.
@OtherJustSaying: Your echo probably doesn’t help, if you’re really concerned about it.
*loose* lips
@YoYoPedro. Yea, I thought about that. For that I apologize. I still think that tjp1974’s comment needed to be called out to prevent more such comments later on. Spock said: “The needs of the many outweigh the needs of the few.”
Sorry about the typo.
@Other Just Saying
How so? tip1974 just tells what he has observed – and that obviously is not the first time nor the last time some restaurants also participate in the “maximize benefits” game, and that has reflected to the bottom line of AMEX Plat card, whether someone said anything has no bearing – the number does not lie, when it gets noticed it gets noticed, regardless how you wish it is wrapped or not.
I’ve been dumped 19 times