As time goes on, more and more of mine and other travelers spending on lodging is shifting from the traditional hotel chains & boutiques to the new share economy and operators like AirBnB. According to a report released by CBRE Hotels users spent $2.4 billion over the period October 2014 – September 2015.
- AirBnB domaintes the market place. When it comes to the share economy and lodging, AirBnB is a dominant force. They have a sixty million person userbase and they average half a million stays per night. The main reason credit card issuers want these co-branded partnerships is because the other brand has an in built userbase that would naturally be attacted to the card.
- American Express will be losing their major hotel partner. If the SPG & Marriott merger goes through, it’s high unlikely that American Express will be able to issue the SPG card anymore, it’s also unlikely that Chase will allow them to issue a Marriott card. Even if they did then American Express would have two hotel partners: Hilton & Marriott. Both of which would be shared with other card issuers (Citi also issue Hilton credit cards).
- They already have a partnership in place. It’s already possible to redeem American Express membership rewards points towards AirBnB stays (including an additional verification for AirBnB users) or gift cards. American Express have even run an AmEx sync offer for AirBnB.
If American Express & AirBnB launched a cobranded credit card, I’d almost certainly sign up for it. They could add a few benefits/features quite easily to make it popular:
- Higher than 2% earning rate on AirBnB purchases (could also include bonus categories for categories that AirBnB owners are likely to shop in like homewares).
- Discount on AirBnB purchases/redemptions. For example if redeeming MR points for AirBnB stays, offer a 5%+ bonus. Lots of other loyalty programs offer a similar bonus.
I honestly don’t understand how an AirBnB credit card doesn’t already exist, my only guess is that other hotel chains (namely Hilton & SPG) have put pressure on American Express not to release such a card. What features would an AirBnB credit card have to have for you to sign up?
Also, I’ll be annoying both @AmericanExpress & @AirBnB on twitter until they release such a card, so feel free to follow me and like our tweets if you also want a co-branded card from them. Alternatively, send your own annoying message.
A more interesting replacement for SPG would be Hyatt. I can see that happening.
I don’t see how American Express would be able to get that portfolio away from Chase to be honest.
While I have been arguing this point for a while, I don’t see any major bank issuing a cobranded Airbnb card in the near future until the regulatory environment cools off around Airbnb. I’m an avid supporter of the Ubers and Airbnbs of the world, but you have to look at this from a highly regulated bank’s point of view. They are extremely sensitive to regulatory and reputational risk, and unfortunately I believe Airbnb creates too much of both for banks right now. The risk far outweighs the benefits of bringing in a portfolio of affluent millennial customers, even though I agree Amex could desperately use the business given the losses of JetBlue/Costco/SPG.
Interesting ideas. A little off topic…as a consumer, I think it sucks that Airbnb is dominating the vacation rental market. I kind of see why. Their website is well-designed, lots of promotions with a good referral program to expand customer base.
However, competition encourages innovation and keeps the price low. Whenever possible, I try to use other sites. I hate to see Airbnb drive more of them out of business. I use Wimdu too. Some money saving tips : they send me $10-$30 coupon every other week. After I review my stay, they would send me 20Euro coupons (expires in a month) for use for my next stay, so I try to time review before my next booking.
Maybe it’s just me, I tried to help the small guys to keep the competition healthy. For now I am using lyft instead of Uber, and Wimdu instead of Airbnb.
There’s a fundamental difference you’re overlooking between hotel chains and vacation rental companies like Airbnb, HomeAway, FlipKey, etc. Hotel chains own their real estate, so the free nights you earn are theirs to give. Vacation rental marketplaces, on the other hand, are just that: a marketplace. They don’t own the property, they just broker the transaction between traveler and property owner.
Consequently, while vacation rental marketplaces can offer limited rewards like the Amex/Airbnb promotion, these rewards have to be small enough that they only reduce the marketplace’s (e.g. Airbnb’s) cut of the transaction. The actual property owner expects to get paid, and the marketplace has no right to reduce the rates quoted by the property owner.
This is the real reason why you have not seen, and almost certainly will not see, an Airbnb (or HomeAway or FlipKey) credit card from Amex or any other lender. These companies cannot adjust the prices dictated by independent property owners. They can only choose to reduce their own profit on the booking.
Exactly, but AirBnB have enough spread in their booking fee that they could easily offer rewards (as AirBnB credit) on a credit card.
A shrewd observation, to be sure. Especially as more and more Millenials come of enough-expendable-cash-to-take-vacations age and unlike their business traveler parents are not wedded to a specific brand or level of service.
Card would earn membership rewards, right?
AirBnB credit would be fine by me.
I agree that it would make sense, but I would think it would follow the introduction of a Airbnb loyalty plan first.