andersonCooper

Oh well, the card has been removed from citibank page:
https://www.citi.com/credit-cards/co...l-credit-cards

joe_miami

You keep saying the bolded part without any evidence to back it up. The Prestige can't simultaneously be the least appealing to the FlyerTalk crowd and the most expensive for the issuer. The 4NF benefit almost assuredly comes close to paying for itself via hotel commissions.

lotrbfme

This is true. It is most likely a wash or a very small cost. But since all card members are paying $450 for pretty much only that benefit and not all of them are using it, I believe they are not risking any money.

355F1

Some of us are only paying $350.

lotrbfme

I am also. But my point was that everyone was paying the annual fee or providing monetary value to citi in some way ^

CarefulBuilder14

Do you figure more people:

A: Use 4NF occasionally, or
B: Really like the TY transfer partners?

Personally, I found A more appealing than B. So to me, it would be weird to have the card and not do 4NF. But I suppose some really like TY partners, or used the event ticket protection or something.

There may also be a few less-savvy users who just figure a high AF means it's the best Citi offers...or who can't get a CSR.

lotrbfme

most people dont know much about their credit cards. For people that do know and do their research it is A. But the average citigold client would get the card because their friendly banker told him so and he would use it and be happy redeeming their TY points for amazon gift cards. I have a friend who used 6 millions MR points to buy a car for his son :

mikesyr18

So you're saying the commission from the hotel covers almost the entire cost of the 4th night free benefit?

The net AF on this card was $200 after the $250 airline credits.... An unlimited 4th night free hotel card for $200/year (plus points earnings, Priority Pass, trip cancellation/interruption insurance, lost ticket insurance, etc.). I doubt Citi was making a lot of money, but was most likely taking a loss from this card, which is why they pulled it.

We would like to know your theory as to why Citi pulled the card then? I guess pulling benefits, and ultimately, the entire card itself was just a random act right? Sure thing.

akr1970akr

If one didn't have the 4NF, one could use portals, OTA discounts (like the constant hotels.com 10% discounts), and even discount gift card purchases to sort of get close to that 25% discount. But those are generally less available at high season, like school breaks or holidays. And hotel choices will be narrower than the concierge, who can book most properties if you do the legwork and point them the right way. And OTA channel wouldn't generally give loyalty rewards the way that booking through the concierge usually does i.e. they can append your number to the reservation. I think that 4NF aggregate discount is a reasonable proxy for what the full service travel agent commissions are for whoever Citi is using for this. Presumably they maybe get 18% or something, and citi gives out 25% to the customer, so maybe its a wash or close to it.

But the business problem remains that a small sliver of the holders use most of the total dollar value of the benefit, and the rest just churn the card. And this seems like the main perk, rather than an ancillary one where maybe that might be acceptable (like a Priority Pass where I suspect many US customers may not get any value if they are not using airports covered under that program, although the restaurant credits have helped a lot)

I can't really see Citi - the #3 card issuer - and a huge player in consumer banking not having anything in their product lineup to face off against CSR, or AXPlat. And they have had versions over the years (Chairman card etc) so its not like terra nova for Citi unlike BOFA who seems more content down at their product mix, never having had a real flagship. (Unless I misremember something?) Anecdotally, among my colleagues who are not super savvy travel hackers (other than 1 kid), the CSR is common. One of my coworkers who recently dropped down from CitiGold to CitiPriority had never heard of the Prestige and basically rejected my suggestion that he consider it (back when he was CG), and instead went CSR. Citi has to fix that issue, banking clients are the low hanging fruit I think.....

andersonCooper

The CSR marketing has been very successful...even my only-pay-for-cheapest-fares colleagues have them, despite the fact that they don't usually fly UA or use PP lounges at all.

Prestige's good old days were when AAdmiral Club admission, aa 1.6x fares and 3-hour delay insurance...Gone are those days.

akr1970akr

Sure those were fantastic perks. I remember right as they were getting rid of the 1.6 AA , we cleaned out all existing TYP booking a bunch of BA flights marked as codeshares (which were surprisingly the same price as their own marketed ones, sometimes codeshares are more costly).

It was a better card before, but it also didn't have the ability to use TYP to book 4NF (if one has a Premier) which is a decent little feature too.

I'm sure whatever they launch next will be crappier. I just hope existing Prestige holders can hold on to their suite of perks for a while. It seems if no retention is given out, and if there aren't many grandfathered in at the 350 fee, that they will decline naturally. Citi left the old Forward card untouched for a long time despite its crazy benefit package, so keeping fingers crossed

joe_miami

Yes.

Again, you're arguing that the Prestige is an unappealing card that somehow cost Citi a ton of money. It's nonsensical.

Citi undoubtedly pulled the Prestige because the CSR blew it out of the water in terms of p.r., leaving the Prestige somewhat dead in the water, even if it's more profitable than the CSR. (The CSR, of course, actually has cost the issuer hundreds of millions in losses thus far, by the issuer's own admission.)

I'm guessing we'll see a refreshed Prestige sooner rather than later.

akr1970akr

IIRC Citi altered the benefits package of Prestige before CSR had hit full momentum / consumer adoption.

I don't understand how Chase will be able to keep CSR benefit package untouched, unless people really start spending more on 1x categories, or carry balances or something. Maybe they just stop incoming UR combinations to that card to contain the costs.

Their head of cards division was saying in some earnings call how much it had cost them, but they were spinning it as some kind of investment. Gathering up churners doesn't seem like an enduring investment to me.

TTT103

In terms of travel agent commissions, hotels and hotel chains/consortium's generally pay 10-30% in commissions. However, it gets a bit tricky because some high volume agencies negotiate tiered commission structures, which will earn agents more money based on the volume they book with a particular hotel or chain. There are exceptions, such as Disney Resorts who only pay agent commissions of 10% regardless of volume booked. In addition, some chains such as Sandals/Beaches, offer not only a commission to agents, but also allows them to earn points towards free stays for themselves. They also increase the commission percentage for higher category room types.

The one factor with the 4NT free is if an individual books more than 4 nights. This will obviously then garner increased commission for Citi, and may help offset the cost of the 4NT free benefit.

My personal opinion is that Citi need simply limit the number of 4NT free bookings per year an individual can make, as I can imagine that we have some business travelers that use this benefit weekly.

ellinj

The problem is that they don't offer enough perks to keep this card front of wallet. I ended up just using this card for 4NF. I am sure they would love to collect swipe fees for every other purchase but it isn't gonna happen when BofA is offering me 2.65% on every purchase.