Kacee

No chance. Frequent travelers are in the airport every week. And these are in many respects AMEX's target audience due to travel spend and use of ancillary AMEX services (e.g., AMEX travel). There would be a massive uproar among exactly the customers AMEX is trying to court.

Super Mario

There's power in branding. If you Google a brand name, what do you expect? In this case, searching "American Express Centurion" you find no mention of travelers cheques, and their card portfolio. You largely see the lounges and the black card. I agree that there is no connection between the lounge and the card, and that is part of the problem. Some may say that it is just a marketing strategy, but I believe it is more.

cbn42

The Centurion lounge network is one of the few distinguishing features of the platinum card that cannot be reproduced cheaper by Chase and US Bank, which are much larger companies with much deeper pockets. I know people who keep the platinum rather than Sapphire Reserve just for this reason. If Amex neglects their own lounges, there will be little reason for people to keep the platinum card. Amex does not want to upset millions of platinum card members in order to make the lounge less crowded for a few thousand centurion card holders.

Do/did you have a Centurion or platinum card? Have you cancelled it?

I don't think there are enough centurion cardholders to justify a lounge network. While they may be very profitable customers, there are not enough of them. It might seem like strange marketing, but the "Centurion" brand has value, and Amex is trying to capitalize on it. It may tarnish the brand to some extent, but I don't think that is significant. As the lounge network grows, the target market changes.

Super Mario

How can the Centurion lounge experience not be reproduced? There is nothing proprietary about it. US Bancorp is just as big of a company as AMEX. JP Morgan Chase has 4x the market cap. Chase can afford to completely overshadow the Centurion lounge, but why should they? I also "know people" who choose the Sapphire Reserve over the Platinum because of its benefits. It's popularity exploded, it pressured American Express, and it didn't need big, expensive, lounges.

American Express had their worst quarterly earnings in a long time in January. These kinds of things usually result in all kinds of finger pointing and excuses. They did clearly mention that their rewards costs are going higher, and that the Platinum card is costing them a lot. I think that at least warrants some kind of questioning into the model and its sustainability.

I do not have one. I wanted to like it, but it wasn't the best fit for me. As you pointed out, the Centurion is huge a benefit some of its card holders. To how many that is a deal-breaker, we don't know. There are people canceling it because the lounge experience is not up to their standards. Again, how many, we don't know. Is it significant? Maybe, maybe it. It is problematic when a credit card must be propped up by a untraditional, expensive, credit card perk. It also can be concerning to where the long-time American Express ideal customer is feeling alienated. But is that customer what they want to target anymore?

Maybe you are right. Who knows for sure. There is lots of change going on right now. They've never had much direct competition with premium credit cards. Perhaps it's no coincidence that the CEO decided it was time to retire. The company is also mentioned lowering its merchant fees. It looks like they really want to reinvent themselves.

mia

Chase or Citi could build a network of airport lounges, but they have not. I do not foresee American Express backing away from this benefit. American Express financial results published in January 2018 were better than expected, and they have announced new Centurion lounge locations at JFK, DEN and soon LAX. The Platinum annual fee increase from $450 to $550 comfortably covers the cost of the lounge network.

cbn42

Getting real estate in major airports is not easy. It has now been 5 years since the Centurion lounge network was launched and Amex has 9 lounges. I doubt Chase or US Bank could do it much faster.

From what I can tell, its popularity exploded because of the 100k and 75k sign-up offers, not because of the benefits. Of course people have different reasons for getting a card, but many of the people who initially signed up did not keep the card for a second year.

Of course it warrants discussion. I think they already responded by raising the fee on the platinum card. This will reduce the number of cardholders and alleviate overcrowding.

In that case, no offense but your opinion is probably not of interest to Amex. They are more concerned with what their actual cardholders think, and whether they are likely to cancel.

Are there? I haven't seen any evidence of this. We all know that people like to complain about every little thing on Flyertalk, but in reality, I think this problem is exaggerated. I would be very surprised if anything more than a minuscule number of people are canceling the card solely because of the lounge experience. Even if the experience is not perfect, it is usually the best option in a given terminal.

Yes, in the end we really don't know. They have more data than we do. But one thing for sure is that they are not going to be able to rest on their laurels and remain complacent like they have in the past, because there is now more competition in the premium market. It will be interesting to see what happens.

BCH

Back to the original topic, I visited the PHL lounge twice last week, and both times it was maybe about 25-30% full in the morning (10am first time, 11am second time). Terrific food, too.

krazykanuck

Seriously. It had a cash equivalent sign up bonus of $1000. That's enough to get anybody in the know to sign up for it. I got it for me and got my mom to get it. I would have signed up my cat but he doesn't have a SSN. One of my former colleagues who got it for both him and his wife, and subsequently downgraded them, lamented that he couldn't get another 2 card in each of his 2 kids names since it was such a good bonus. This colleague is a churner through and through, too. He was the only one I knew IRL blasting through the Citi Exec 100k links back 3-4 years ago.

Their rewards spending has definitely increased, but if you actually looked at their 10K SEC filing like I have, you'd see that most of the drag on their net income is the always nebulous Income Tax line item. Ironically driven by the tax law passed late in 2017. Income from swipe fees is up YoY. Spend over the Amex network was up YoY. Average spend per cardholder was up YoY.

If you don't believe me you're welcome to read for yourself here on the US Securities and Exchange Commission website: https://www.sec.gov/Archives/edgar/d...axp201710k.htm

JHake10

"The lounge is quite packed today" - SFO check in agent

Nothing new here.

United747

SP03

I also like the PHL lounge. It has the friendliest people working at the airport. This lounge is the only reason I'm keeping my AMEX card. I do majority of my spending on Chase.

I may not be the most profitable customer for AMEX in terms of spending, but my membership fee basically pays for lounge access.

JHake10

I got a bite to eat and left to go to the United Club. No issues finding a seat and much quieter. I noticed on the WiFi card there is a link to take a survey now. I filled that out.

SP03

What are they asking on the survey?

transportprof

More than a few empty seats in SFO lounge at the moment. I guess people have cleared out for the weekend.

Kacee

That's what I do now . . . Centurion for food, UC for a decent seat and amazing wifi.

I'm hopeful Polaris lounge will reduce Centurion lounge crowding a bit (but suspect it won't).