Amtrak Guest Rewards 2.0 Coming January 2016

[calwatch]

OCTA is the Managing Agency for LOSSAN, replacing SANDAG (San Diego Association of Governments) a couple of years ago. They were seen as a compromise between the warring factions of San Diego MTS and LACMTA (Metro) and were better supported by the northern counties as a centrally located agency without the bureaucracy of Metro.

The PowerPoint has been revised with a benign statement now. More importantly, it drops the "and is getting better" from the header of the slide, as it is not getting better for the vast majority of customers.

Amtrak Guest Rewards will continue to grow in importance

– Amtrak Guest Rewards members will soon have more flexibility in earnings and redemptions, and

– Be able to book, modify, and cancel reward tickets themselves on Amtrak.com or mobile.

As the LOSSAN board is a public board and meets at the MTA Building in Downtown Los Angeles, you should be able to call 213-922-6045 at 12:30 pm Pacific and listen to the meeting and the presentation.

 

[Anderson]

Ok, a bit more analysis on this:
I'm probably going to take a wait-and-see attitude on this, but I'm going to say that it is a not-favorable wait-and-see attitude. That being said, I've got deep reservations about this:
(1) The best we can hope for is status quo, and the way this is being carried out reeks of it being a major devaluation.
(2) Operating with the presumption of it as a functional devaluation (it is stunningly rare to see a major "tune-up" [1] of a program without an attached devaluation), it is VERY disturbing to see the timing on this. The devaluation was set to be announced on August 31; there is presently an ongoing "buy points special" which expires on August 23. I cannot help but view the timing as suspect there, particularly since it is unlikely that this overhaul has NOT been in the works for at least a few weeks.
(3) Also operating with the presumption of a functional devaluation, Marketing really needs to rein in their dressing-up of these changes [2]. Calling this a "tune-up" of a program that I believe the vast majority of members would consider adequate-to-excellent (and which, speculation being what it is, will likely be a net loss for most or all members) is a classic case of "putting lipstick on a pig", as the phrase often goes, and it appears transparently so in light of other developments in the travel industry as of late (e.g. Delta's SkyMiles changes). The changes are likely to be unpleasant; saccharine-coating them in positive-sounding euphemisms is likely to make the more jaded of us ignore any positive elements of the change out of cynical experience.

I would further point out that, at least from my perspective, the program as it stands is extremely simple, straightforward, and accessible. From what little that can be gleaned from the documents we have seen, the changes do not seem set to improve it on these grounds (particularly considering the low cost of many "special train" coach awards) as awards will likely be more expensive in all but the cheapest cases (e.g. St. Louis-Alton). Yes, some of this may vary based on the nature of the new redemption costs...but experience elsewhere says that said costs will likely come out worse in all but a few cases. Eliminating blackout dates doesn't do much (blackouts were a marginal element of the program for the most part) while point expiry has mostly been a non-issue.

The credit cards likewise earn a wait-and-see attitude...there are too many terms and benefits to wonder about which may or may not apply. While I can say that I will almost assuredly be setting aside my present AGR card if/when it ceases to offer AGR points (or transferrable points), but beyond that I'm looking at this with trepidation in light of everything else going on.

[1] Based on the mentions of likely doubling-to-quadrupling of redemption prices (over on FT), a word other than "tune" is coming to mind to describe this. Were I to take my car in for a "tune up" and find that my fuel efficiency had dropped by this much the odds are that the mechanic and I would be meeting one another in court.

[2] Withdrawing "and getting better", as noted above, is a move in the right direction. Lord help me were I on the commission were I to hear of this as an "improvement"...let's just say that saying that in the face of a countervailing reality would be enough to cause me to burst out laughing from the dais.

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I will say that I don't expect the worst of FT's expectations to be borne out. What will probably happen is that, for example, advance-purchase Regional tickets will end up noticeably cheaper while last-minute tickets will end up noticeably more expensive. The net effect will be a loss, but I don't think it will necessarily be quite the massacre that everyone is expecting. Still...I'm expecting this to be bloody to the point that I would have preferred a non-trivial "straight" devaluation to the restructuring.

 

[Anderson]

I've worked up a bit of a tirade that I'm going to put up over on FT, but...the more I think about it, I'm split between three options on the card:

(1) Get the card, use the same as now.

(2) Get the card, milk for the bonus, only use strictly for Amtrak travel.

(3) Don't get the card.

(4) Get the card, unlock the bonus, remit full payment, shred and toss card, close the credit line at eleven month mark.

Amid the overhaul, I've come to the pained conclusion that a straight cash-back-with-2%-on-travel card might be a better deal for me if we end up with some sort of 1.5x card in a gutted AGR.

I would agree that at this point cash based kickback cards seem to be the best overall option. The monkey point program cards are only useful for unlocking the humongous signup bonus and then trashing.

If I cannot justify keeping the card for Amtrak purchases (which would imply a bad card and a major wrecking of the program), I will probably not screw around with the bonus. There are plenty of other cards I can do a bonus chase with.

 

[Dan O]

Drat. I was planning an 80k point trip either next summer or the following one. Looks like that may be in jeopardy. Last two long distance train trips I have taken were with my kids and using sleepers at 40k for 2 zone RTs.I can earn a 2 zone RT now in 2-3 yrs. If it goes to 5 yrs or more I guess I wont be taking so many trips via Amtrak.

It is a lot easier to stomach late trains and less than ideal service when the trip was paid for using points.

 

[newlatidude]

I wonder if we'll have a phase in period to make future reservations at the current rate (burn points :help: ) like there was when the bedroom redemption rate went up.

I also wonder what "higher value AGR co-branded credit card" means. Does that mean annual fee?

Bank of America dumped all of its no-annual-fee co-branded loyalty program cards a few years back IIRC. I think the only no-fee cards at BofA are ones that earn solely in BofA's own points program(s). The rest of the loyalty program co-brands are all annual-fee cards as far as I know. This isn't to say it's impossible for one of these AGR BofA cards to be no-annual-fee, but the odds aren't good. I'd be happy for this prediction to be wrong though!

 

[PRR 60]

Just having an annual fee does not make a card bad. It depends on what comes along with the card. If the card has a $95 annual fee, but offers a $100 Amtrak credit after a $5000 spend, two Club Acela passes, and two 12-hour upgrade coupons, wouldn't help offset the fee? Those are just examples, but that is the kind of perks that airline fee-based cards sometimes offer. I have two airline cards, pay fees for both, but in my opinion, i get a return in perks that more than offsets the fees. Today I'm going to book a trip to San Francisco and cash in a $99 companion round trip coupon provided by my AA card. It's a trip we would have taken anyway. The $300 savings on my wife's fare pays the annual card fee four times over.

With both the credit card and the redemption changes, until we know the details there is no way to claim this is a bad deal, a good deal, or maybe the same deal. Certainly experience with programs like AGR is that when programs are "enhanced," that typically means enhanced for the provider, not the member. Whether that conventional wisdom is also true here, we simply don't know yet.

AGR has been a good program run by good people. I'm willing to wait and see the details before I trash it.

 

[Ryan]

That's way too logical and rational, my friend. Break out the pitchforks and torches!!!

 

[Blackwolf]

Unfortunately, if AGR does go with Bank of America as their card provider, that will be the end of me having an AGR loyalty card in my wallet. I swore off BofA in 2006 after being seriously shafted by them, and have gone out of my way to avoid having any business relations with the company since. So I wait with some nervousness to hear the official news.

Kind of regretting the points purchase I made a month ago now, reading about the re-jiggering of AGR. Was planning on a RT Bedroom redemption between SAC and BOS in March, looks like that'll probably not happen now because I'm thinking the 120k points needed in the zone system will not be enough with the new fare-based system.

 

[printman2000]

Kind of regretting the points purchase I made a month ago now, reading about the re-jiggering of AGR. Was planning on a RT Bedroom redemption between SAC and BOS in March, looks like that'll probably not happen now because I'm thinking the 120k points needed in the zone system will not be enough with the new fare-based system.

From what I can tell, you will be able to do points travel under the current zone system up until January 2016. So if you BOOK before then, zones would be in effect.

Of course, this is speculation based on what I have read.

 

[BCL]

I guess it's wait and see for me. In my travels I have a grand total of one segment that earned more than 100 points, so the minimum points are what allowed me to attain status and amass points. However, the flat-rate redemption is often what kept me from using my points. I'd like to use my points for a short trip but get the sense that I'm wasting my points. Some would have questioned my use of 5500 points for an otherwise $130 SEA-EMY ticket as being a poor use of those points.

A lot of rewards programs these days have a relationship between points cost and retail prices. It makes sense to most people, but I get how it rocks the boat with some people so used to trying to maximize the "value" of these points with the flat-rate zone redemptions and the special routes.

 

[Mystic River Dragon]

I will wait and see, too, primarily because I don't understand any of it! :huh:

One question I do have now, though: my Amtrak credit card expires quite a while after the changes--will they let me use the card as usual, or send me a replacement with whatever the new rules are?

 

[AmtrakBlue]

I will wait and see, too, primarily because I don't understand any of it! :huh:

One question I do have now, though: my Amtrak credit card expires quite a while after the changes--will they let me use the card as usual, or send me a replacement with whatever the new rules are?

I suspect Chase will convert it to a "generic" Chase card.

 

[Mystic River Dragon]

I will wait and see, too, primarily because I don't understand any of it! :huh:

One question I do have now, though: my Amtrak credit card expires quite a while after the changes--will they let me use the card as usual, or send me a replacement with whatever the new rules are?

I suspect Chase will convert it to a "generic" Chase card.

Oh, I see--thanks. That doesn't sound very exciting.

 

[willem]

Just having an annual fee does not make a card bad. It depends on what comes along with the card.

Yes.

If the card has a $95 annual fee, but offers a $100 Amtrak credit after a $5000 spend, two Club Acela passes, and two 12-hour upgrade coupons, wouldn't help offset the fee?

For some, perhaps. But a $100 credit on a $95 fee is only a $5 benefit, Club Acela passes are rarely worth anything to me, and 12-hour upgrades are worthwhile less often than Club Acela passes (again, to me). So, I agreee that the fee is not a deal-breaker, but the perks you mention would not make a no-fee card worth it to me.

AGR has been a good program run by good people. I'm willing to wait and see the details before I trash it.

True, and I'm waiting.

 

[William W.]

A revenue-based redemption program is almost universally bad for high-dollar tickets. Just look at what is happening to Delta SkyMiles; some business class award tickets for next summer now cost 400K+ miles. As a DL frequent flyer (Gold Medallion), I've seen first-hand what the move to a revenue-based program looks like, and it's not pretty.

I'm pretty much done with Amtrak these days anyway (except for the occasional NEC trip), but I still have about 15K points that I need to find a way to burn. Maybe I can find one last LD sleeper trip that works with my schedule. I'm certainly never again going to pay cash for sleeper service, not with all the fare increases and service cuts. I've had my fill of late trains, deteriorating OBS, failing equipment, and sour employees.

Honestly, I'm surprised that it took Amtrak this long to change AGR. It has been one of the most lucrative award programs out there, and they certainly couldn't have been making money off of it. Name one other program that would allow you to redeem 20K points for a ticket that costs $1.5K+. I certainly can't.

 

[Anderson]

Drat. I was planning an 80k point trip either next summer or the following one. Looks like that may be in jeopardy. Last two long distance train trips I have taken were with my kids and using sleepers at 40k for 2 zone RTs.I can earn a 2 zone RT now in 2-3 yrs. If it goes to 5 yrs or more I guess I wont be taking so many trips via Amtrak.

It is a lot easier to stomach late trains and less than ideal service when the trip was paid for using points.

I obviously don't know how many points you have, but if you pull the trigger now you can lock the trip in at present rates.

 

[BCL]

This simply aligns burning to be similar to earning.[/size]

That's precisely the problem. The ability to arbitrage was the key to making use of AGR. Soon it will be little more than generic rebate system. Kind of like a cash back card, but with a lower opportunity value and more restrictions on use.

I don't know if "arbitrage" is the right way to describe it. I thought that arbitrage describes a price inefficiency where different markets value something differently. I'm not sure if a redemption quite qualifies. For example, I remember one collectible that I bought in bulk because the price was good. The seller was selling it considering the wholesale price he paid, which was before it became a limited commodity. Another dealer was selling it for considerably more, and I was told that his wholesale price had shot straight up. I bought a bunch of that collectible and turned around and sold them for a profit. Actually - I got credit which was even better since I was a regular customer and where he said since it was a trade his accountant said he didn't have to account for sales taxes.

Certainly there have been ways that "mileage plans" had been worked to death. I had a bunch of United MileagePlus miles from international trips. We weren't sure how to use them, and ended up applying them to four (partnered) Hawaiian Airlines inter island flights. I'm not sure if that was a terribly efficient way of using them, but we weren't going to be able to otherwise use those miles. There was also the 500 mile minimum for lots of these programs, as well as "segment" counts that could also lead to status upgrades. I remember United's SFO-OAK flight used to be popular at the end of the year since it counted as a segment and for the minimum miles. Some people would even take BART home from Oakland after collecting their 500 miles.

Sure it's a market inefficiency in a way. The current system appeals to a certain segment of Amtrak's customer base that wants to maximize individual transactions. However, we've seen how the redemption "costs" have gone up to account for the higher cost of doing business and the various ways to accumulate partner points. We've seen this with all sorts of loyalty programs. How much is a point or mile worth when it's so easy to get more points through secondary means?

 

[BCL]

Honestly, I'm surprised that it took Amtrak this long to change AGR. It has been one of the most lucrative award programs out there, and they certainly couldn't have been making money off of it. Name one other program that would allow you to redeem 20K points for a ticket that costs $1.5K+. I certainly can't.

It kind of created a problem when a disproportionate number of passengers in sleepers weren't on revenue trips. Of course it was bound to create a reassessment of the system when the redemption costs weren't proportional to the retail price. The Southwest Rapids Rewards program has actually been pretty good. If you can find a good fare, you're going to be able to make your points go further. The current AGR system rewards the member for picking the trips with the most expensive retail prices, but debited via a flat-rate redemption.

And again, we can fall in love with all these "partner points" but in the end the ability to get points from different sources is going to effectively devalue what we have. In about 3 years, I don't think I collected more than maybe 1200 partner points through hotels and car rentals. Then I see all the talk about using shopping portals and whatnot, and I'm concerned that it's prompting Amtrak to devalue the points I have.

 

[Devil's Advocate]

In some ways AGR has become more than just a loyalty program. AGR has allowed many of us to travel in sleepers without paying absurd sums of money. I'm talking double or even triple the cost of a first class flight in some cases. If Amtrak changes AGR substantially then they may gain more immediate revenue but they'll also lose a lot of former supporters who can no longer justify the cost. I think deep down we always knew that in order for Amtrak to pacify their detractors they'd have to raise costs, reduce benefits, and curtail discounts to the point that many of us would no longer be able to participate directly. Perhaps that time has finally come.

Until we know the details there is no way to claim this is a bad deal, a good deal, or maybe the same deal.

I think we can reasonably assume it's not the same deal based on the information already available. Loyalty programs aren't like currency markets or commodity markets or real estate markets or equity markets or bond markets. Unlike actual investments loyalty points only have one direction they can move. Over a long enough timeline all major loyalty points will eventually lose value due to inflationary pressures. Always. The best you can hope for is that acquiring more points becomes easier as the inherent value of points already in hand decreases. If we distill it down the positive minded folks are basically hoping that a massive increase in points earning opportunities and greatly increased redemption flexibility will be able to successfully counteract the next devaluation. Which is entirely possible, at least in the early going, but any positive counterweight is unlikely to be maintained at a positive ratio over time.

This simply aligns burning to be similar to earning.[/size]

That's precisely the problem. The ability to arbitrage was the key to making use of AGR. Soon it will be little more than generic rebate system. Kind of like a cash back card, but with a lower opportunity value and more restrictions on use.

I don't know if "arbitrage" is the right way to describe it. I thought that arbitrage describes a price inefficiency where different markets value something differently. I'm not sure if a redemption quite qualifies.

Strictly speaking it's not precisely arbitrage because...

1. It's not fully liquid

2. It's not instantaneous

3. It's not free of risk

I guess I could have said disparity or imbalance but the point was that the discrepancy itself was both the enabler and the motivator.

 

[newlatidude]

I will wait and see, too, primarily because I don't understand any of it! :huh:

One question I do have now, though: my Amtrak credit card expires quite a while after the changes--will they let me use the card as usual, or send me a replacement with whatever the new rules are?

Your individual card expiration date has nothing to do with how long Chase will maintain the card as an AGR co-branded card. If Chase/AGR decide the party will end for existing Chase AGR cardholders on, say, 01 February 2016 then that's when a new card of some sort would take its place for all cardholders (unless you decline and just close the account) - regardless of whether the card in your wallet has a "12/2015" or a "04/2016" expiration date, for example.

It's hard to tell...in other similar loyalty program card situations over the years there have been a few instances where a losing bank kept its co-branded card for existing cardholders in place for quite a long time after new apps were no longer being accepted; and others where it ended pretty quickly after the switch.

 

[benale]

I don't quite understand this new system, but I have a feeling the great days of planning long distance trips with points are coming to an end. Two months ago we booked two two zone awards in a roomette using the longest routing Toledo-LAX via the Texas Eagle and LAX-Toledo using The Coast Starlight and The Empire Builder. I guess those days are over. I've used AGR points for many years. I now have built up 11,000 points and until I read this, I was anticipating doing point runs especially during Double days(hope they are still around next month)and eventually reaching 40,000 again in a couple of years for my next big adventure. I guess we'll find out at the end of August how all of this comes down.

We used Wyndham rewards points on our trip so every hotel room was free. Right before our trip Wyndham changed their system, where instead of getting free nights for as little as 5500 points, now all their free rewards are at 15,000. We didn't use more than 8000 on our trip. You can use their "go fast" feature which will get you a room for 3,000 points plus $25 or $30for their former 5500 and 8000 point rooms. and up to $75 cash extra for their former 10 to 30,000 point rooms, Every hotel we stayed at was free. If we booked those rooms now, it would cost extra, unless we booked a 15,000 point room.

Depending on the upcoming details, I may want to use my points before the end of the year.

 

[BCL]

I don't quite understand this new system, but I have a feeling the great days of planning long distance trips with points are coming to an end. Two months ago we booked two two zone awards in a roomette using the longest routing Toledo-LAX via the Texas Eagle and LAX-Toledo using The Coast Starlight and The Empire Builder. I guess those days are over. I've used AGR points for many years. I now have built up 11,000 points and until I read this, I was anticipating doing point runs especially during Double days(hope they are still around next month)and eventually reaching 40,000 again in a couple of years for my next big adventure. I guess we'll find out at the end of August how all of this comes down.

Of course that's kind of where we are. If I wanted to use my points on a quickie weekend trip like EMY-SNS on the CS, that costs the same 5500 points as SEA-ELP. Of course I'm kind of waiting to see how they value points. I frankly wouldn't be too happy if it's a 100 points per dollar of revenue travel, but maybe it's something a little kinder than that. Maybe it would even persuade me to use my points rather than hoard them.

 

[SteveSFL]

One of the greatest features of Southwest Rapid Rewards (and AGR) is the ability to cancel an award reservation right up until the departure time and have the points go back into your account with no penalty. Unless you have status in any other program, there's usually a hefty fee for that. I hope AGR retains that feature.

In fact, I usually use that feature of Rapid Rewards in conjunction with my one-way AGR trips by booking two flights home: one for an on-time train and one for the ubiquitous 12- or 24-hour late train. I just cancel the one that's not going to be used.

One strange thing about Rapid Rewards is the tiered redemption levels. In addition to the number of points required being based on the cash fare (less taxes and most fees), it's also based on whether the fare is "Wanna Get Away", "Anytime", or "Business Select". This seems to add a layer of complexity since the higher "classes" of fare are already more expensive.

 

[Eris]

BofA does have a couple of co-branded cruise line points cards with no annual fee.

 

[SteveSFL]

BCL, I hope it's nowhere close to 100 points/$. I don't think many people would consider using 97,800 points for a low-bucket CHI-EMY bedroom on the Zephyr (for two people). At 50 points/$ it would be a lot closer to the current 40,000 point 2-zone bedroom. 50 points per $ would also make some low-bucket roomette long-distance trips not too unreasonable for us solo travelers, either. For example, CHI-SEA at $422 would be 21,100 points.

Don't get me wrong, I'm going to be really sorry to see the zone system go away, and with the missteps that Amtrak has been taking lately with their service decisions, I have little faith that they'll make this system workable either.

If they were to make it 100 points/$, I think they'd see a lot of empty sleepers on the long-distance trains. It would be interesting to see a breakdown of the current LD sleeper occupancy by AGR vs. cash fare. And remember that running trains with empty sleepers doesn't really save Amtrak that much money.