Here’s one way companies are competing for your loyalty: acknowledging that consumers are more fickle than ever.
Capital One will offer 10 times the miles to customers who stay at hotels of your choice booked through Hotels.com, both companies announced Tuesday. Typically, those cards offer just twice the miles on purchases. The offer applies to Capital One Venture or Venture One cards.
The partnership targets consumers who don’t want to be tied to a particular hotel brand, said Lauren Liss, Capital One’s digital partnerships and rewards lead. Consumers can also still participate in Hotels.com’s loyalty program, while getting the benefits of the increased credit-card rewards.
Travel search engines are looking for new ways to compete, said Brian Karimzad, vice president of research at the credit-card website CompareCards.com: Booking platforms, like Hotels.com, Priceline, Trivago and Kayak are in stiff competition with one another, and partnering with credit-card companies is one way to lure customers away from the competition.
But even if the rewards seem generous, experts warn that consumers should be sure they can pay their credit-card bills in full each month. Paying interest on credit cards can quickly outweigh any rewards earned through spending.
The Capital One VentureOne card has no annual fee; the Venture card has no annual fee for the first year, but charges an annual $95 fee after that. “If you’re talking about a $150 per night hotel stay, that return can add up pretty quickly,” said Matt Schulz, a senior industry analyst at CreditCards.com.
Hotels.com is not the first search engine to partner with a credit-card company. The booking platform Expedia EXPE, -1.16% debuted two credit cards in partnership with Citi C, -1.68% in 2014. It offers three Expedia bonus points for every $1 spent on Expedia purchases.
Shortly after, the platform Orbitz US:OWW announced a Visa V, -1.03% rewards card. It offers 5% cash back on Orbitz bookings. Priceline PCLN, -0.40% also offers a Visa card with 5x points on purchases through that site.
Credit card companies have long partnered with hotel chains, rewarding customers for staying loyal to just one brand. American Express’s AXP, -0.70% Starwood Preferred Guest card is a popular option. There will be more cards from those companies soon: Starwood and Marriott completed their merger in 2016, and Marriott announced it will issue new card options in 2018.