Originally Posted by
Gig103
I definitely disagree with your rule of thumb. Why would you consider annual spending at all (whether $30k a year or otherwise) when looking at a Platinum card unless it's all prepaid hotels and flights? And don't even limit it to the 10x a year lounge visit, not everyone values the lounge the same as you, or they have family members in tow that triple the per-visit value.
I do agree in a sense that the increased perks and credits changed the baseline customer. There are fewer people willing to pay $250 (after airline credit) for lounge access, concierge, and IAP, than there are people willing to spend $50 (after all the credits) for the same benefits. But at the same time, revenue from those new customers did help facilitate the new Centurion Lounges being built!
Edit: Your comment about changing demographics also is key because Amex needed to compete against the CSR.
The family in tow point is a good one. Granted your capped at what 2 guests nowadays right? So if you are a family of 2-3-4 whatever your spending abilities should go up to coincide with that. 30K spend becomes a lot easier to attain on the personal side with more than 1 person.
30K spend calculation is easy. Amex points are valued at 2 cents each. = $600 a year covers the biz or reg AF. at least beats your breakeven before you factor all the other stuff in. that may or may not be used.
Lounges normally cost $50 a visit so unless your visiting the lounge a total of 11-12 times depending on biz or personal it doesn't pay for itself. Then whatever your annual spend is meaningless which is why I said Annual Spend is DQ'd if you use the lounges more than 10X.
Compete against the CSR all you want but the big money is not that demographic. I can get 3% cash back no cap in other places that are not Chase or Amex, keep lowering the benefits or redemptions and you'll start to lose the bigger money.
3% on a Mil a year is 30K a year. 10 mil a year = 300K a year starts adding up real fast. Then all you'll have is people using it for its rewards and not actually spending on it.
The more and more travel blogs keep feeding information the less and less rewards become available, the price of the rewards goes up etc. AF are important but having hundreds of millions of dollar of charges thru their interchange is more important to them. Remember they are taking 3-4%.