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Hilton’s CEO says they’re in advanced talks on a new credit card deal. (HT: S.B.) What could that mean?
Based on Hilton’s earnings call this is expected in the second quarter.
Hilton is relatively unique — although now not alone in the U.S. since American has two card issuers here, or along in the world since Etihad has multiple bank issuers in the same market for instance — in having more than one credit card issuer. Both American Express and Citibank issue Hilton cards.
A new credit card deal could be a renewal of the current arrangement at a higher price. A new bar was set by Citi-Costco leading to higher priced deals for Delta, United, Southwest, and American Airlines. And American Express and Chase are still jockeying to figure out what the future looks like with Marriott (Chase is co-brand card issuer) and Starwood (American Express issues) have merged. Normally you’d expect the surviving issuer to be Chase given that Marriott was the acquirer. However American Express has been aggressive trying to figure out how to retain the business.
It could also be 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.
Conrad Koh Samui
Unquestionably any new deal will be more expensive for the bank issuer than the current deal. That’s going to mean more money to Hilton Honors. As a consumer what I’m looking forward to is learning what benefits may come along with a new card deal, since the bank is going to want to position itself to have a more profitable product, more attractive to more people, generating higher levels of spend.