Help me understand the AGR redemption increase
 

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.

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Some things just can't be explained. Seems like AGR would want to stay competitive. I wish they would stop having double points promotions and leave the rates as they are.

Or you could get one each of the Chase Sapphire, Ink Bold and Freedom cards and transfer those sign-up bonuses to AGR and get 130k points right there.

I suspect not many are using their Ultimate Rewards points for that, but I thought I'd mention anyway as it is possible to get a large number of Amtrak points easily and cheaply, albeit as a one-off exercise.

I totally agree. I'm seeing AGR redemptions being treated as "revenue-like" tix now that sales to UR and other parties are adding a large number of AGR points outstanding. The CC bonuses also added a ton of points to the program. Since AGR is only restricting tix on blackout days, with no capacity control, they needed to formalize the program with point value becoming a focus.

This may be why the loopholes were closed, AGR redemptions became segment based, and the call centers brought in-house. I never thought of transferring from UR to AGR before but its a good option if I ever am a 1k or 2k short in my AGR account.

I 'topped up' my AGR balance from UR by over 30k points(!) so that I could book a roomette from Boston to Seattle this coming summer.. The cash price quoted was around $1300, so got a value of about 3.6c per UR point which I considered quite good.

I'm now assuming that by doing so I am part of the problem...

Loopholes weren't closed for that reason, or even so much that too many people were abusing the system. They were closed for another reason.

And the AGR shopping mall isn't a recent addition; the mall has been around for at least 5 to 6 years, I don't recall the exact date it was first introduced. The AGR program has only been around for just over 12 years, so the mall has been around for at least half the time that AGR has existed.

Finally, the main reason for the increases in redemption rates is because Amtrak wants more value for those seats. Prices have been going up on the NEC for years, but the revenue that gets credited from the AGR program to the NEC for that seat hasn't been going up. I see this as a move to bring things more in line with the true costs of that seat.

As for the sleepers, I guess the idea is simply that there are fewer Bedrooms on the trains than Roomettes, so they're just trying to get a bit more value for that. If it were truly about the costs, then I would have expected Roomettes to see an increase too.

You're not part of the problem; you're doing exactly what is expected/intended. Nothing wrong with what you've done at all. UR paid AGR for those points and AGR will pay Amtrak for that room when you take your trip.

Thanks, AlanB. I stand corrected on the AGR shopping mall being a recent addition. I have never used the mall for AGR points.

Do you know if this is going to be a one time adjustment and redemption prices are expected to remain stagnant for a few years, or is this the start of annual reviews/increases. The points are still nowhere near the .01 valuation that we see on airline miles and some hotel points (when redeeming for coach/regular rooms).

I would expect that it will be a few years before you see another increase, or at least an increase on the very same items. It wouldn't surprise me to see a Roomette increase in the near future for example, since that didn't go up this time.

But honestly I have no idea what the long term strategy/plan is.

This really shouldn't push anyone over.

Earning miles on short hops (even with 500 mile minimums and/or elite bonuses) takes quite a while to rack up enough for a free ticket. Further, prices on the NEC are almost always better than flying (at least out of NYC), so you'd be paying a premium with the airlines just for the loyalty program.

Right now from BOS - NYC or BOS/PVD to PHL, flying can often be much less expensive than taking the train, specifically the acela. I have been posting about this on another board, but there was a particular weekend in May that I am going PVD - PHL. Acela, for one person, roundtrip was $400 for business class. Direct flights on Us airways was $220. Taking the regional would have been $252.

If anything it appears that there is now a price premium for taking the train. PVD - PHL is also just long enough of a train ride that I would consider flying. I think even with arriving at the airport early enough for security and then getting back into center city PHL from the airport, it is still faster to fly.

Flying BOS-BWI can also be a lot cheaper.

I also don't understand why Acela would stop at BWI, but not EWR.

Um, could you clarify this? Because the last I checked, AGR redemptions are zone-based, not segment based. And I don't think that's changing under the new point redemption levels. That would be a huge, huge change.

BWI gets service in part simply because it used to get service back when the old Metroliner's still ran, which were of course replaced by the Acelas. The EWR stop didn't exist back then so the Metroliner's never stopped there. Toss in the fact that BWI doesn't get nearly as much service from other trains as EWR does and that's part of the reason that things continue as they always have.

EWR on the other hand does have lots of service even on weekends, unlike BWI. So it was decided that stopping Acela's at EWR created to big of a running time hit for Acela, especially with NWK so close anyhow.

BWI also sees quite a few more passengers than EWR, 654,151 vs. 120,428 respectively in 2011. And that's despite a codeshare with Continental. Now of course part of the issue could well be the fact that Amtrak doesn't stop as many trains at EWR as they do at BWI.

Major difference between the two stations is that the BWI rail station is open to anyone, whereas to use the EWR rail station you have to be coming from the airport. (Obviously you could park your car at the EWR airport garage and take the Airtrain out to the Amtrak station, but that would make little sense.) But at BWI anyone living in the surrounding suburbs can easily drive up and park their car in the 3200 space garage.