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Over the past decade, some travel bloggers have become millionaires, several times, through the publication of travel articles around the world, with detailed seating reviews of business elegance and hotel room suites. Now this company is in danger and we don’t know when or if it will come back.
Actually, no one understood the trend of problems like Brian Kelly, who knows him as The Points Guy, who started writing about when he worked at Morgan Stanley a dozen years ago. What began as a hobby has temporarily become a profession, with Kelly promoting Americans how they can use the trouble to take a “free” vacation.
A few years later, he sold his business to Bankrate for an estimated $20 million, according to Business Insider. He’s still CEO, but along the way, he becomes a type of celebrity, appears on the network’s morning exhibits and lives with Kelly and Ryan to communicate on offers, and in the commercial press to communicate about airline revenue.
For the uninitiated, Kelly’s site turns out to sell ambitious trips, as a typical influencer. But The Points Guy has been much more successful than a company that accepts bribes in hotel stays. The Points Guy and other similar blogs cut credit cards and convince consumers that they can take an exclusive vacation by requesting the right card. In older times, experts say a credit card company can pay between $35 and $500 for a single card approval processed on a giant website. Card corporations pay premiums because luxury travelers worldwide have long been the main customers.
Not anymore. Bloggers don’t like to talk publicly about their relationships with card companies, as the terms are confidential. But speaking anonymously, they said that some card companies, adding American Express and Capital One, had almost completely withdrawn referral fees. Others, adding Chase, have paid them, but only for non-public cards, not business cards, a source said.
It’s hard to blame them. Even if card corporations were to resume payments, would consumers need a new Amex? Often, other people apply because they are an express trip, but who can dream of Bora Bora now?
“We’re in the credit card industry, especially premium cards, and nobody,” Kelly said on July 16 at the Skift Loyalty Summit. “There’s not a lot of customer demand for new credit cards and, in fact, there’s no appetite in the credit card company component.”
With such a slow business, The Points Guy transferred workers to others through its parent company, Red Ventures.
Others report similar problems. A prominent blogger, who did not want to be known for not engaging with card companies, said sponsorship revenues declined by approximately 90% compared to the pre-pandemic. Another, Gilbert Ott, who runs God Save The Points, said his map advisory business accounts for about 70%.
Sponsorship gains were never an integral component of Ott’s profit streams, and he claimed he had the same close relationships with card corporations as competitors. Still, he said the margins in his limited card reference business were huge.
“It’s so incredibly lucrative that no blogger who wants to stay in their living can really turn it away,” Ott said. Now, he said, that money is basically gone.
“It’s an apocalyptic scenario.”
The Points Guy would possibly be the only logo to enter the niche and become a household name, however many others have a massive audience, with readers relying on them for the latest flight reviews, airline news and credit card deals. Some of the most popular come with View From The Wing, One Mile at A Time and Million Mile Secrets.
These bloggers now look like geniuses, especially newly extracted millionaires. But much of what led them to their good fortune was beyond their control.
It began just over a decade ago, when U.S. airlines seeking to accumulate their money through an investment in loyalty programs. They didn’t need to win any more fliers, as they were hunting to attract new credit card holders. They were looking for high-margin income.
This activity is fanatically lucrative for airlines, as card corporations pay airlines for every mile, up to 2 cents according to the point. In a recent presentation, United Airlines, which values its MileageP program; Us$22 billion, said it earned $3.8 billion last year through the promotion of miles to third parties, adding credit card corporations. Mileage systems also have daily jobs, they have to compensate for these loose holidays, but the charge of “loose” flights is only a fraction of the profits they make from mileage sales.
For airlines, co-branded cards have the best economics, and United would rather consumers hold a card with its logo on it, rather than, say, a Chase-branded card. But airlines can make money even on non-branded cards. When a consumer transfers points earned from Chase Sapphire Reserve card to United, the bank pays the airline.
“It’s a post-recession thing,” Andrew Watterson, Southwest’s director of advertising, told Skift in 2018. “Even before that, it’s interesting, but I think the economy has strengthened and airlines have renegotiated with banks, it has reached critical mass point
When this business began to develop, airlines and banks needed new distribution channels for a new era. Many have retained direct mail deliveries and some have even asked flight attendants to make commercial drum announcements, providing workers with $50 for a success recommendation. But there’s nothing compared to blogs, especially when it comes to attracting younger, wealthier and more travel consumers.
“The Points Guy is looking for a payment for anything not exceeding $300, according to the user who supports the card,” Ott said. “As soon as I know, I think this should also have other people on the market. And when you think about it, with millions of readers a month, even if you only get a small component of that, it’s a very smart deal.”
Despite the close relationship between blogs, card corporations and travel brands, consumers sometimes accept as true with the most widely read bloggers, who can make or undo airline loyalty programs. Some have been criticized for working too hard with card companies or airlines, while others remain fiercely independent. Some write severely critical stories when they think an airline is adopting an anti-consumer stance.
When Sun County Airlines reorganized its loyalty program two years ago and unveiled credit card changes, Brian Davis, the airline’s chief marketing officer, contacted the airline’s top bloggers in advance to assess their response. Sun Country is one of the smallest airlines in the U.S., however, it even cared about blogs. If they were going up, Davis knew the airline would be in trouble.
“We said that if we launched this program, would this be a program that would be comfortable protecting with your customers?” said Davis. “Your voices can move the needle. We were well aware of the lifestyles of various opinion-tellers and components of the engagement strategy to avoid any negative feedback from them.”
Mark Nasr, vice president of Air Canada’s loyalty program, is recently running. Your program, Aeroplan, will soon be relaunched and on the first day, the most important bloggers will know everything. Nasr works with them a lot.
“Bloggers do a fantastic job selling the product of the trip,” Nasr said. “Most bloggers communicate about their own reports: the places they used, the things they saw, the reports they had. It’s a way of modernizing the old pages of newspapers and some very exclusive specialized magazines that were once very powerful.”
These sections of glossy newspapers and magazines once had a significant influence on the industry. But now the maximum of them is irrelevant.
Point bloggers can suffer the same fate. Perhaps the global will evolve. Today, several bloggers say, other people are more interested in money back credit cards, which will offer small discounts to consumers, allow referral rates to bloggers.
Still, Davis and Nasr said they expected the credit card ecosystem to come back strongly when the air began to recover. And they said they hoped bloggers, as long as they are still active, would play a role in the recovery.
There is virtually no doubt that card activity will return. You’ll have to, because airlines can’t evade that revenue. Which company wouldn’t need to invest in an asset that it can create from scratch and sell 2 cents each? Without credit card revenue, many airlines would not be able to survive.
When airlines and card corporations take lists seriously, Davis said, consumers will probably want someone to ask them about how they can do what they want. And he predicted that some of today’s bloggers will probably occupy this niche market when the company returns.
“There is a position for other people who act as client advisors,” Davis said. “Right now, other people probably don’t ask the same kind of questions about” How do I need to take a vacation in 3 months and what’s the fastest way to get there? “But I think the basics of what made this valuable service will return. I think there are every explanation of why we will return to this environment.”
Consumers would probably need it back. This won’t happen soon, because very few people travel and airlines and banks are in cost-cutting mode. But every industry cycle in the more than 40 years, travel cards have remained strong because they have ineffable strength over consumers. People love the concept of accumulating problems for a flight to Hawaii (since it’s exotic!) They need a $2 reduction on a $100 purchase.
“Of all the other types of cards you’d have in your wallet, the one that excites you to the fullest is the one that makes you dream of all the glorious things you can do,” Davis said. “If you offer me two cards, one that provides me with fuel and one that gives me a vacation, I need the holidays. The fuel I have to get anyway. The systems that make other people dream are the cards that reach the maximum sensitive to the wallet.
Of course, the blog activity in 2022 will be the same as in 2019. But some bloggers say they froze a replacement before the Covid-19 pandemic, as the company is already undergoing an herbal evolution.
After the 2010-15 boom turned some bloggers into millionaires, the biggest brands began to enter the game in hopes of diverting revenue. CNBC and Business Insider began promoting credit cards, while Wirecutter, a website owned by the New York Times, posted links.
“He’ll come back, but I’d like to point out that it was before the pandemic,” the eminent blogger said. “Credit card members’ income has not reached the heights they had a few years ago. This is because there are more people in this game and more sites, even CNBC. Now there are all kinds of big brands that make credit cards. It’s very saturated. “
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