aok336423

I could see them changing it but it may not be until mid 2024, and only if they see decreases in Amex revenue. Personally, I hate these changes, but I'm also trying to understand why they've done them....and I'm not sure about the priorities here. I'm guessing they're looking at some of the data from when the Vanilla Amex implemented the $75K for free guest access. I just wonder if Amex saw significant incremental spend increase or was mainly just focused on reducing crowds -- but I'm guessing it was more of the latter. At the same time, I don't know how much overlap there really is between Vanilla Amex holders and Reserve holders.

I'm assuming these changes are trying to drive shifts in customer behaviors (mainly increased Amex spend), but I also just don't see that fully working (and part of it may just be confirmation bias). I think DL Amex card holders can be profiled into a couple of key demographics:
1. Customers already spending more than $75k on DL Amex - these are either high income professionals or business owners running lots of business spend through their DL Amex. A lot are probably hub captive and aren't necessarily concerned with maximizing redemptions. Clubs will be less crowded for them, but these changes probably won't cause much behavioral/spend changes
2. Customers spending enough for the $25k waiver and/or MQM bonuses but less than $75k reluctant to change - these are relatively frequent travelers, but can be pretty fickle, especially if they're not hub captive. They pay attention to rules/terms and are probably pretty knowledgeable about the changes. They also know that there's much more rewarding credit cards out there, but they were willing to spend on the DL Amex for the MQD waiver and MQM bonus since they determined the trade off was worth it. The new changes may make them totally give up on the DL Amex cards. This is the group I'm a part of, and I'm just gonna say screw it, and not engage in the DL Amex circus anymore.
3. Customers not spending much at all - this will be all over the place. Some may cancel and some may increase spend to be over $75k. They could be ones just not paying attention to the rules/terms and is something that gets them engaged.
4. Customers that will increase their DL Amex spend to be over $75k - likely hub captive customers that really care about unlimited SkyClub Access. They aren't going to shop around to other airlines. I just kind of doubt this group is very big, and I don't really understand who else would be a part of it.

I just hope these changes don't work out for Delta. The one thing I’m not really considering is how Amex may be pushing to reduce costs/payouts to Delta for access. I don’t think any outsiders really know the terms of those contracts, but Amex could be the main driver if they’ve set themselves up with really unfavorable contracts – but I wonder what the difference is between the Chase and Citi contracts for UA and AA, since they aren’t having these problems.

GrayAnderson

So, I think groups 2/3 are where there's going to be a lot of attrition, but there's a fifth group - folks who are spending somewhere between $30k and $75k, who might be induced to bump their spending up the rest of the way. Someone who is spending $60k might well be bothered to add the extra $15k.

Of course, with the rollovers going away, the math becomes kind of comically complicated - every MQD between $18,000 and $34,999 is now a wasted dollar and for even $100k on the card to get you over the edge to Diamond, you'd still need to be spending $25k/yr (MQD-wise) with Delta.

PA815

The rollback isn’t as much a rollback as it is a slowdown of how long it takes to get to the finish line.

All announced changes will happen. They’ll just implement them over the course of a year and not rip the band aid off all at once.

hhdl

One immediately apparent difference is that UA's and AA's lounge cards confer a Club membership, while the Reserve makes it clear that it's not a membership (the slightly different access rules, for instance). So it's a reasonable inference that UA and AA effectively sell lounge memberships at a discount to Chase/Citi (which partly explains why those cards have little benefit for holding beyond club access, though recent AA changes are interesting in this light).

hhdl

(Accidentally tapped Submit, so finished the previous paragraph and saved... Mods may want to merge)

So that means that either Amex is paying per access or that the clubs themselves are joint ventures with Amex. The former is a spectacularly bad trade for Amex, but would have been even 5 years ago when it was Business Travelers Businessing and the riffraff hadn't invaded. The utilization shift appears to be that it's more leisure travelers who arrive early and remote work sort of turns the lounge into a WeWork (longer hub connection times also contribute: leisure travelers also tend to book longer connections). That makes the clubs more expensive to operate.

​​​​​​I suspect that the broad outline of the deal around the DL clubs is that Amex and DL jointly cover the losses (resp. share the profit) from the clubs after getting the per-access revenue (mostly from ST partner elites or partner J, plus some more from DLAX Platinum and guest fees) in proportion to accesses with credit card vs. accesses by DL STE+ or memberships. This somewhat explains the ORD and BOS-E clubs: they're really DL-branded ST lounges that generate revenue.

In that light, not selling memberships to non-elites and not allowing members to access on Basic can be viewed as DL shifting more of the club costs to Amex, with the $75k threshold being Amex's response to the increase in Reserves as membership substitutes.

Nerfing the DLAX Plat paid access, on the other hand, seems like a DL-initiated thing. If there's a crowding problem in the clubs, dynamic pricing is a well-known solution. If only there were folks in Atlanta who knew about pricing things dynamically and managing capacity... I think we'll see FCM-style offers to add access to specific lounges, perhaps bundled with FC/PS/C+ upsells (UA does this already: from the thread there, these accesses take priority over fixed price and credit card day passes). The Reserve and DLAX Plat could then get statement credits applicable to taking upgrade/lounge offers.

Flying Blue's director posted in that forum not too long ago that FB was looking for a way to get at least some of their elites (Ulti? Platinum? Gold?) SC access on domestic itineraries.

Adelphos

OP - as a "huge SkyClub/Amex lounge fan," would buying a Delta SkyClub membership directly make sense for you?

Unfortunately, as others have said, limiting visitation on the "vanilla" Platinum is one of the few changes I think most people agree is reasonable

DCflyer1222

I thought about that and using my Amex plat airline credit to take $200 off - but again at some point - I think delta will stop selling memberships altogether. I could see that starting in Feb 2024 - to ensure people don't try to find a workaround

Troppy

The only thing I know about Delta is: If they can sell it, they will. I expect they will try to not sell unlimited access, but packs of visits that expire at the end of the year.

GrayAnderson

The problem, for me, is that DL jacked up the thresholds in such a way that I cannot see myself achieving any status worth having on DL (Gold is where it becomes useful), so I cannot see myself crediting hardly anything to DL going forward. Getting to the MQD6k threshold without (lousy) CC spend isn't going to be easy in some years (it'd be easy in years with a massive income tax bill, but not otherwise). Put differently, DL has inverted a virtuous cycle into a vicious cycle ("lock-in" becoming "lock-out") because everything became just a little bit too "expensive".

zxrst

I think 75K is here to stay. They might increase allowances (10 for Vanilla and 14 for Reserve) or they might not. With increasing AU fees and limiting SC access, a lot of Vanilla Platinum members will be out anyway, including me. I am not paying $700 + $175/AU and spending $75K on a 1% card.

dw

Don’t forget, Amex just increased the AUs to $195 ;-)