January Catch-Up

Some months it feels like the news and activities in the points and travel world are quite mundane – but not so this month. Man oh man did a lot happen! As always, we can’t even come close to touching on all of the stories, but we try to hit some highlights and showcase some some of the quirky tidbits that occurred in the month.

Upcoming Atari Themed Hotel

Anyone who has ever heard of a video game has heard the name “Atari.” Thanks to a collaboration effort between GSD Group and True North Studio “video game-themed hotels” will become reality. At this stage there are plans to break ground on the hotel in Phoenix later this year while other US locations could begin popping up in the future. Current planned cities include Seattle, San Francisco, San Jose, Las Vegas, Denver, Austin, and Chicago. It is a bit surprising to see this popping up in the US, when it seems more at home in a place like the Akihabara neighborhood of Tokyo. This should be a very interesting project to watch.

Boeing’s First Flight of the 777-X, Continued Issues with 737-MAX

The most two most noticeable differences on the 777-X vs prior 777s would be a) the folding wingtips and b) the MASSIVE engines. The great news for Boeing is that the flight was a success and to quote one of the pilots upon exiting the craft after the flight, “it was awesome!”

The 777-X is larger than the current variants of the 777 which allows it to have a greater carrying capacity. Due to that the wingspan must be wider, but Boeing smartly created folding wingtips to allow the 777-X to use gates currently used by the 27 ft narrower current 777s. The new GE9X engines are also much more powerful and about 10% more fuel efficient, so across the board this plane appears to deliver a lot more bang for the buck. The questions will start to arise about the commercial viability and working into route networks effectively. If that can be done and baring any safety issues, this should be a fantastic plane.

The 737-MAX fiasco is still looking large for Boeing and the successful flight of the 777-X isn’t big enough to get out from under that shadow. As things stand currently the major US carriers have announced that June would be the earliest that we would see the 737-MAXs back in service.

Chase Sapphire Reserve Increases Fee and Benefits

Chase’s premium credit card, the Sapphire Reserve increased its annual fee for 2020 and beyond from $450 to 550, bringing it inline with its Amex competitor, the Platinum card. With the extra $100, members do get some key benefits added – but the catch for card members is whether or not they lead a lifestyle allows for capturing the full value of these new perks.

Members will now earn 10x points on all Lyft rides and will offer Lyft Pink membership for one year. Lyft Pink offers a lot of value with 15% off all rides, surprise offers, 3 cancellations fees covered per month, and 3-30 minute bike/scooter rides per month. This is clearly a response to the $200 Uber credits offered by American Express and if you are one who uses Lyft regularly the value gained via the points bonus and 15% discount for a year is worth well over $100.

$60 in DoorDash credits will be available in both 2020 and 2021, but no clear indication if those will continue beyond that time frame. These added benefits are definitely targeting those that live in big cities and favor convenience. Even if you don’t fit that mold, it isn’t hard to extract $100 per year from these benefits.

American Express Opens Phoenix Centurion Lounges and Tests the Waters on Points Transfer Fees

American Express expanded its Centurion footprint once more with a new lounge in T4 of Phoenix’s Sky Harbor Airport. In addition, an Escape Lounge (also accessible with the Amex Platinum) opened next door and the two lounges share a “flex” space with a wall that can move allowing more or less room in each lounge as needed.

Five other lounges are planned to open this year with both London – Heathrow and New York – JFK scheduled to open during the first half of the year. Charlotte, Denver, and Los Angeles are all listed as “2020,” so one can assume that will be in the latter half of the year.

Early in the month, Platinum card holders in Hong Kong received a notice that beginning April 1, they would be charged a fee to transfer their Membership Rewards points to travel partners. The good (and bad) news here is that the fee is fixed, currently at HK $300, which is around $38 USD. If you are trying to top up a balance with 1,000 points or move 150,000 points for an aspirational award, the fee stays the same, so obviously smaller moves end up costing more on a per point basis.

This will certainly be something to watch, and while things differ from market to market, Amex has been making a lot of changes to its fees and benefits over the past year. We will continue watching this and will provide updates as they become known.

American Airlines Eliminates Close-In Booking Fees on Award Tickets

Mid-month, American announced that it was doing away with its decades old $75 fee for award bookings made within 21 days of departure. United made a similar move several months back, but effectively replaced it with dynamic award pricing that increased the redemption cost 30 days prior to booking.

My expectation is that we will see American eventually do something similar – either mimicking United’s bumped rates as it gets closer to departure, or obfuscating the increase by becoming more dynamic, akin to Delta. Either way, I fully expect that the overall value per mile redeemed on the portfolio level will go down. It isn’t all doom and gloom though – by having knowledge of award chart sweet spots and being able to pick up award space that opens last minute, you can take advantage of nice last minute getaways, saving some cash at the same time.

Brexit Happened, Now What?

January 31 at 11pm GMT, the United Kingdom officially left the European Union. Change will certainly be coming, but for now travelers can rest easy knowing that nothing will be changing for them until December. The UK and EU must now agree on how borders will be treated, and set up the mechanisms for crossings and transfers.

There is still a very real chance of a No-Deal Brexit, in which case hard borders would be enforced, causing headaches for all. So, if you have upcoming travel this year to the EU transiting through the UK or vice versa, don’t panic as it will be mostly business as usual. For 2021 and onward we are all waiting to see what the final agreement will have in store for us.

FICO 10 T Could Negatively Impact Your Credit Score

FICO (Fair Isaac Corporation) scores are used to help banks, lenders, and others make decisions regarding an individual’s creditworthiness. The formulation of these scores occurs in somewhat of a black box with on general guidance given on how certain aspects affect the final score. For years the keys have been length of history, payment history, utilization, delinquencies, etc. Updates to the scoring method happen every few years and the latest iteration has a major wrinkle. FICO 10 T will be looking historically at how debt levels change over a rolling 24 month period and will focus a lot more on missed and late payments.

The expectation is that the new version of FICO will impact ~110 million consumers with roughly 40 million seeing an increase of over 20 points and 40 million seeing a decrease of 20+ points. A lot of people stress over what their score is at a specific point in time, but in reality it isn’t that important unless you’re actively applying for credit. This new method of scoring may not allow for the “quick” spikes in scores that we have become used to when we pay down a large balance, so planning ahead for those credit inquiries may become more of a necessity.

Social Media Checks for Airbnb Bookings?

We all have heard that having pictures of your heavy boozing college days for everyone to see on Facebook isn’t exactly the smartest. It has been the downfall of many jobseekers in recent times. Now, we may have to deal with something similar from Airbnb – but it isn’t all bad. For the record, I think Airbnb can be a great service, providing access to interesting, niche places in underserved markets. There are also horror stories that make the news of fake rentals and horrific renters. The company has made strides in preventing the former and now is looking to make good on the latter. Back in 2017 they acquired Trooly, which is a company that utilized social media and publicly available and credit history data to verify identities and establish trust.

Airbnb is set to start using this technology and while it isn’t known what the interface looks like for the landlord – or exactly how a prospective renter would be able to view his/her profile, it is interesting to note that Trooly’s data analyzer claims to be able to denote patterns of “narcissism, machiavellianism, of psychopathy.” Perhaps as a landlord you may want to remove that kitchen knife set if your prospective tenant possesses these traits…and maybe add more mirrors??

Profit Sharing and Carbon Offsetting

As a travel enthusiast, I love waxing poetic about amazing first and business class experiences that I have had as much as I do complaining about the state of US airline and hotel loyalty programs and general business practices. Every once in a while there is a nice no-spin (or let’s be honest…minimal spin) story about good things coming out of the industry that benefit everyone.

After merging with Northwest Airlines in 2012, Delta adopted a profit-sharing model that has been paying out for the last six years. Delta employs 90,000 individuals and every employee will be receiving a bonus of equal to 16.6% of their salary – for a total of $1.6 billion. Of the three legacy US carriers, I find Delta to be the most consistent, have the best hard product across the board and the nicest domestic lounges. For the sake of the employees, I hope 2020 is even better.

JetBlue announced that it will be carbon offsetting all domestic flights in the US starting July 2020. They aren’t just throwing money at a carbon offset fund, but have specific projects that they are supporting. As of now they are focused on forestry, landfill gas capture, and solar/wind. On top of this they will be purchasing sustainable aviation fuel for flights out of San Francisco. This fuel is made by Neste and is made from waste and residue raw materials and has a roughly 80% smaller carbon footprint than conventional jet fuel.

Continued modernization of JetBlue’s fleet also plays into their environmental initiatives. New fuel efficient A321neos and A220s play a large role in reducing fuel consumption, but JetBlue has also been advocating for changes to the air traffic control systems as they claim that current inefficiencies account for up to 12% of current fuel usage.

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