American Express Co. and Starwood Hotels & Resorts Worldwide Inc. recently launched a cobranded credit card for United Kingdom business travelers that features points-based rewards for flights and hotels.
Users of the Starwood Preferred Guest card earn one Starpoint per British pound (US$1.48 or 1.16 euros) they spend with the plastic, 10,000 bonus points if they spend 1,000 pounds during the first three months, upgrades to the Gold preferred hotel guest tier after spending 15,000 pounds in one year and a free weekend night in a specific preferred guest hotel after spending 25,000 pounds. The card also offers a combined cash and points payments option that enables cardholders to pay for trips with cash, points or a combination of both.
Additionally, cardholders can earn such benefits as travel accident insurance, a refund of up to 150 pounds if a flight is cancelled or overbooked, and Global Assist, a 24-hour emergency call line for medical or legal assistance.
The annual fee is 75 pounds, and the card carries a 19.9% annual percentage interest rate, which is about the standard in the UK market, Smith says. The issuer charges 3 pounds for cash advances, or 3% of the amount of the advance—whichever is higher.
The Starwood Preferred Guest credit card launched in the United States in 2001, but AmEx did not see a market for it in the UK until this year, Doug Smith, a spokesperson for American Express UK, tells PaymentsSource. The issuer’s views changed when a survey of more than 1,950 UK adults who travel at least twice a year showed a demand for that type of product, he says.
The results of the survey, which research firm OnePoll conducted in March, suggest that 60% of UK business travelers collect card rewards and points, and as many as four out of 10 use them to subsidize or upgrade their leisure holidays, according to AmEx. Moreover, 48% of respondents redeemed their points several times each year, while 68% said the economic downturn had made them more likely to use their card reward points on a more regular basis.
Also, 33% of the UK’s business travelers had taken partners, children or friends with them on business trips and extended the trip into a vacation, while 27% had future plans to extend trips, the results suggest.
“We are noticing that consumers who travel for both business and pleasure are looking for added value, which can come in different ways, such as collecting reward points for overnight stays and flights,” Smith says.
The card is available both to members of Starwood’s Preferred Guest program and to nonmembers, whom AmEx automatically will enroll in the program when they sign up for the card, Smith says.
Starwood’s Preferred Guest program includes such brands as St. Regis Hotels, W Hotels and Resorts, Westin Hotels and Resorts, Sheraton Hotels and Resorts, and Four Points by Sheraton. Cardholders may redeem points for such rewards as free hotel nights on weekends and weekdays, room upgrades and free flights, all with no blackout dates.
Other market research similarly suggests a need for reward- and points-based cards in the UK, especially for travel.
“The research we have done pretty clearly shows, regardless of your level of affluence, there is a need to seek out value,” Megan Bramlette, managing associate at Auriemma Consulting Group of Westbury, N.Y., tells PaymentsSource.
“The Starwoods program is a generous loyalty program that is going to resonate with customers,” Bramlette says. “Loyalty schemes, even for a nice chain, will be successful because all types of consumers are looking for value.”