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I’m in a tremendously lucky spot in managing the entire travel and entertainment division, which handles restaurants, hotels, airlines, cruse lines, travel agents, tour operators and car rentals. One of the big things we started to do this year is to focus on logic, given everything post-September 11th with the economy. We thought that was a segment that needs our support and one where we could extract a lot of value for our cardholders. So looking across the board with the economy right now, we thought that an economy and budget kind of division is where so much of where the volume would be as people are trading down to save money.
The first alliances we went after were Cendant and Best Western, and both of them are tremendous partners. Best Western coming out with this “stay two times and get a free companion ticket” is pretty rich. We did a significant program with them over the summer with the MLB All-Star game. We are also about to launch a very large promotion with them in the United States and Canada, geared more towards Canada, with the NHL.
The approach we take is so different and unique. We find out what it is they want and we listen first, then we go back and brainstorm.
When Citibank moved its portfolio from Visa to MasterCard, did that cause a major shift in how you looked at loyalty programs? Are you looking at the world a little bit differently today?
I think so. The American Airlines portfolio – that was the first co-branded card out there for miles. When it came out it was a dual issuer, so there were MasterCards out there. But the majority were Visa. Conversion has done a lot of things to us from a volume perspective. It’s the number one mileage program from a card perspective in the world. But I think that people like to be rewarded. If you’re going to do something, reward them with currency that they want to be rewarded with. What consumers are saying is that they want miles – then give them the miles.
We are working with our partners. We are seeing double-digit growth in an area where others are not even seeing single-digit growth. As long as planes are flying, and trains are there to be ridden on, and cars are there to drive in, we are going to be actively and very aggressively providing offers to our card holders.
How active are your banks?
The banks take the lead. The team I am with is tasked with helping the banks fill their portfolios and stay profitable. My group not only has the relationship with the merchants in terms of creating value; we’re considered internal consultants. We created opportunities for our banks with our key merchants. At the end of the day we are a member organization.
Does Starwood and MasterCard have a future relationship – they have been exclusively with American Express.
We have a program with Starwood in which we both share a mutual sponsorship of the PGA.
Do you like what you see among your competitors?
Anything that the other card companies can do to help keep the travel and entertainment industries healthy I’m in support of. But we don’t create any of our programs based on what our competitors do.
Do you have a sense that you’ve caused some change among cardholders that play the Hyatt game? A card change in wallets?
Yes. But 80 percent of American Express cardholders already have a MasterCard. I know it has created a massive shift. We have well over 60,000 new transactions. But if all it was doing was shifting existing customers of Hyatt from one form of payment to MasterCard, it’s great for us. But it’s not great for Hyatt. We both are on the line for mutual success. You can tell when programs are crafted that way because they are the best in the business. We take what we’ve learned and try to apply it to our other partners.