I get the underlying constraint Chase has. There is some pretty hefty margin in luxury hotel program bookings but in aggregate I was actually surprised at announcement that they were going down this route because even accounting for luxury hotel booking take for Chase (likely 20-25%-ish) it still meant Chase was still paying out 1.5-1.6 cents per point. That was always going to be a money loser for them, but I think they wanted the prestige of a successful luxury hotel program like Amex and figured it was worth the tradeoff.

That's pretty high given that even in the previous era Chase was only paying out around 1.3ish cents per point for travel bookings (assuming the usual 10% margin on bookings) - which they were obviously not okay with given that they moved away from the 1.5 cents per point general valuation on the travel portal to 1.25cpp.

But let's not pretend for a second this is a customer friendly move, or in some way trying to "manage inventory" better. This is 100% them realizing they did bad estimates and found out that people are not going to spend their points at a 1.25 valuation on the portal and will find other means to use them - whether that was transfer partners or the Edit. And I think the Edit credit plus the 2X points boost did actually hypercharge demand to the least desirable (for Chase) form of consumption. Even "filthy casuals" that are not credit card maxxers likely rushed to use the Edit credit and do the points boost to pay the residual. The assumptions that underpinned the spreadsheet math "broke" and they want to stem the losses.

At 1.65 cpm, we're back to about 1.3-1.4 cents per point (assuming the 20-25% margin take) which Chase is comfortable with. It's as simple as that. They are likely "penalizing" the most booked properties that are driving the most loss, and keep the less booked properties at 2 cpp to incent booking those to "balance the books" and make sure the hotel portfolio looks successful from the perspective of the hotels - a predictable demand flow. Yes, it might have auxilary room management benefits, but that's a consequence of the strategy, not the end goal.

The right way to handle this would have been to say, oops, we're not going to be as profitable as we thought. But we need to keep this benefit in place - as advertised - for long enough that people don't feel like it's bait and switch, and then announce it as part of some sort of "annual refresh" (e.g., announce in June, take effect in October). Yes, it would have cost them money (and made people rush to use them accelerating losses even more), but I really believe this is going to do some meaningful brand damage to them.

I could be wrong though. Maybe people don't care, or people won't notice when they do the math.

Honestly, beyond the bait and switch anger, my biggest frustration is that this is just ANOTHER way this card is hard to use. On every booking now I need to do the quick mental math to see "is this a 2 cpp valuation, or a 1.65 cpp valuation?". It makes the portal booking process painful.