littlemookie

I just saw the notice of AGR redemption rates going up and was wondering if someone can help me understand the reasoning behind the increase. I may be misunderstanding a fact or 2 but here are the basic premises about the program from my understanding.

1) AGR is a closed ended system - Recently AGR added a shopping mall and other special offers to earn points but redemption's are limited to gift cards at about .01 a point and Amtrak travel. I can only speak for the NEC trains, but I don't think the AGR NEC redemption's are selling out trains and causing Amtrak to lose out on selling full fare tickets on that same train. I understand that people redeeming AGR points may have bought full fare tickets had they not used points, but I'll discuss that soon.

2) Earning points - Aside from the 36k credit card offer that AGR had, there are not many ways to rack up the points. Amtrak travel, which is the purpose of the program only earns 2-3 points per dollar plus whatever promotion AGR is currently running. There is a FT thread where FT'ers tell their year end balances, and they are not crazy high. Having 100k in AGR points is rare. I would be curious how many points are redeemed each year, and the cost to Amtrak.

3) The fly vs. ride debate - Again, this is typically only a NEC specific debate, but the D.C - NYC - Boston route is Amtrak's highest traveled route and competes against the airline shuttles. The 3 main reasons why people take the train is the ability to do work, the downtown to downtown trip (no airport shuttles, cabs, etc.) and the AGR points. I'm curious if people switch now that AGR redemption's have gone up.

3a) Amtrak System - The people who sign up for AGR already take the train. Many of these same people would pay full fare for their next trip, but they have the AGR points, so why not use the points. I know that some people save their points for the LD trips in sleepers but I don't know how large a group that is. So in this scenario I can see how AGR would create lost revenue for Amtrak.

I am not arguing against the increase, but I was a bit surprised at the steepness of the increase. I was expecting the special routes to go up from 1,000, but the NEC Coach increase from 3,000 to 4,000 was a shock, I was looking for 3,500 - 3,750.

My thoughts are that this increase partially stems from the 36k credit card offer and the introduction of the shopping mall. AGR is now selling their points and seeing more redemptions and a larger liability on its balance sheet. With more seats going to AGR redemptions, there is increased scrutiny on the point value vs. fare paying passengers.

Many of the Amtrak redemption's were and still are a good value, but with the loopholes closing, the requirement to pay each segment in points separately, and the numerous blackout dates, all decrease the value of a AGR point and make what used to be a simple but excellent program, a more complex but still good program.