Both American Express and Citibank issue Hilton cards. Hilton is relatively unique in having more than one credit card issuer, although now not alone in the U.S. since American Airlines has two card issuers. They’re also not alone in the world — for instance Etihad has multiple bank issuers in the same market.
A month ago Hilton’s CEO announced that they would have a new co-brand credit card agreement before the end of the second quarter. That agreement has now been finalized and it’s exclusive with American Express starting January 1, 2018.
- They haven’t announced terms. Deals are usually 5 or 7 years. Given that there will be a cardmember transition (Citi will no longer offer Hilton cards) I’d guess this is a longer term deal.
- It is also expensive. American Express had to pay a lot to not just renew but to gain exclusivity.
- We do not yet know what will happen with Hilton co-brand cards come January 1, 2018. I’m asking whether American Express is buying Citi’s back book, or whether Hilton cardmembers will be product-changed to something else.
Conrad Koh Samui
A month ago I speculated on a new deal with only one issuer,
American Express has been aggressive since losing Costco (and jetBlue). They renewed Delta and Starwood (although Starwood is now in question with the merger). They’ve been increasing their marketing spend. They could be going after Hilton at a high enough price point to gain exclusivity, turnabout on Citi for taking the much larger Costco deal away from them.
Citibank cards will continue to earn Hilton Honors points for their spend through the end of 2017.
Hilton’s Mark Weinstein promises “new ways to enhance value for our most loyal guests” out of the deal, which could mean new benefits but any time a loyalty executive uses the word enhancement I’m not hopeful. With as much as this deal must be costing American Express there will hopefully be new benefits and cardmember opportunities aimed at acquiring customers and rewarding them for increased spending ont he products.