Hilton & Amex Are Entering Into An Exclusive Credit Card Agreement In 2018

Filed Under: American Express, Citi

I didn’t see this one coming.

Hilton Honors has been unique among US hotel loyalty programs in that they’ve had a non-exclusive credit card agreement. At the moment Hilton has credit cards issued by both American Express and Citi, while other US hotel loyalty programs have cards with just a single issuer.

Personally I was expecting that this would be a trend we’d continue to see grow, given that I imagine in many cases this is the best way to maximize revenue. For example, last year American announced that they’d have co-brand cards issued by both Citi and Barclaycard, which broke the exclusive agreement they previously had with Citi. This was a big blow for Citi, but I guess they weren’t willing to pay the price that American wanted for exclusivity.

Well, Hilton has just made a big announcement when it comes to their credit card co-brand agreement. American Express will be the exclusive issuer of Hilton Honors co-branded credit cards in the United States beginning January 1, 2018. At that point co-brand Citi Hilton cards will no longer be issued.

As explained in the press release:

The announcement follows a comprehensive and competitive bidding process aimed at creating long-term value for both companies, hotel owners, guests and Hilton Honors members. The terms of the new multi-year partnership remain confidential.

“Hilton continues to focus on adding new benefits for our Hilton Honors members,” said Mark Weinstein, senior vice president and Global Head of Customer Engagement, Loyalty & Partnerships, Hilton. “We are excited to work with American Express on new ways to enhance value for our most loyal guests.”

Conrad London St. James

There will be no immediate effect for cardmembers. Hilton says that further information will be made available later this year regarding what happens to existing Citi cardmembers.I suppose there are a couple of ways this could play out:

  • Citi could sell their existing portfolio to American Express in a mutually beneficial way
  • Citi could simply convert cardmembers to other Citi products

This is a big win for American Express, given their loss of market share lately. They lost the Costco agreement to Citi last year, and with Marriott’s takeover of Starwood in full swing, there’s certainly a risk that they’ll lose their co-branded SPG Amex agreement.

So this is a case where it’s entirely possible that American Express was willing to overpay for exclusivity in order to make sure they were able to keep this partner, because losing Hilton would have been a big blow.

I’ll be curious to see what this means for the future of the Hilton American Express. Generally I view competition as a good thing, so I’m not thrilled to see cards discontinued. It’s nice when not only the hotel loyalty program is competing for your business, but also different card issuers working with that program.. Then again, there’s also plenty of competition in this space between co-branded cards of different hotel loyalty programs, and that’s not changing.

Historically Hilton has offered pretty robust and generous co-brand credit cards. Both American Express and Citi have each issued two Hilton cards, and they offer significant benefits. Their premium cards have offered Hilton’s mid tier Gold status for as long as you have the card, while you can also spend your way to Hilton’s top tier Diamond status, more easily than with any other hotel group.

Hilton Gold & Diamond members receive executive lounge access at Hilton properties

What do you make of Hilton entering into an exclusive agreement with American Express?

  1. Looks like Amex is throwing in the towel on SPG. There’s no way they could get exclusivity for Hilton AND Marriott/SPG.

  2. I agree with @Tommy Trash. Unfortunately, this means we’re likely losing Amex SPG AND Citi Hilton in the same year or two. Darn

  3. I would pay the extra $20/year if they bumped the Hilton Amex from $75 to $95 and killed the ForEx fee

  4. I’m guessing we won’t see anymore increased offers for the Citi card. Bummer I just got the Surpass and was hoping to get the no-annual fee Citi card before the AMEX one.

  5. So they lose Costco and get Hilton. What a deal!!!! 🙁 I agree that they may lose SPG and that would not be nice.

  6. @ chitownflyer — I asked about this not too long ago and was told that this was something that was being tossed around in the past, but it was based on outdated information. So it doesn’t sound like this is happening anytime soon. But who knows, with an exclusive agreement, maybe we’ll see them introduce another product.

  7. @ Thomas S — I think it’s very likely that they’ll introduced a revamped card with no foreign transaction fees. Agree it’s ridiculous that the card has these fees.

  8. @ Tommy Trash — You may be might, but that’s not how I see it. Chase has exclusive agreements with Marriott, IHG, and Hyatt. In this case I suspect it’s just a much needed win after Amex lost JetBlue and Costco, and has nothing to do with the SPG and Marriott situation.

  9. @Lucky , any idea if they will honor the free night on the Citi Hilton Reserve in 2018 if you met the $10,000 spend in 2017 ?

  10. I wish they had announced this before the 100k Surpass offer expired. I would have gotten that to replace my Reserve, even though it would have set me back another few months to get under 5/24 for some Chase cards I’ve had my eyes on.

    As it was, the additional bonus didn’t seem worth it at the time, because I already had Gold status from my Reserve card and do most of my Hilton stays abroad, where the Surpass cards forex fee makes it worthless.

  11. @Geoff; same question. I currently have two Citi Reserve cards that I’ve been getting two free nights every year with; one with an anniversary date in August and one in January….. I will not be spending a penny on the January one if I won’t be receiving a free night certificate!

  12. This is a bummer as I currently have the Citi Reserve Hilton Card. Guess we will have to wait and see what happens with current cardholders like myself…

  13. @Lucky; if I were Hilton my new deal with AMEX would forbid Amex from being the Marriott CC provider going forward. I imagine Marriott feels the same way. Why would either Marriott or Hilton want to share the same CC bank? I think it is far more likely that Citi will be the new Marriott provider than AMEX. Am I missing something here?

  14. @ PHLJFK — That’s generally not how it works. The exclusivity part of it is usually one sided. That’s to say that the issuers are paying big money for the exclusive privilege of working with the airline or hotel, and they can engage with as many travel providers as they want. Maybe there are some clauses in place, but just look at how Chase has exclusive agreements with Hyatt, IHG, and Marriott.

  15. @Lucky; Thanks for your thoughts, what I should have said is that Hilton and Marriott are huge, I would think they would only exclude each other and not care about the smaller players. We will see what happens with Marriott, but I take Hilton going from non exclusive to exclusive as an indicator of where we are headed.

  16. @lucky if we don’t have one of the Citi cards, should we apply for them now, or will they still be available to apply for in the near-future?

  17. @ Matt — I’d definitely consider applying for one soon. I’m not sure when the applications will be pulled. I doubt it will be all that soon, but they might not be around all the way until the end of the year.

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