⚠ A Bundle Built on TravelModerate threat

American Express (AXP) — threat to the moat

A card whose fee is justified by lounges and travel credits is exposed to anything that makes travel less attractive.

The fee is justified by benefits, and a large part of those benefits are travel benefits. American Express competes, in its own words, for "lounge space in U.S. and global hub airports" and for "dining experiences"1. It opened its 31st Centurion Lounge, in Salt Lake City, at the end of 20252.

Billed business, $bn1,070.52019870.720201,089.82021American Express Form 10-K FY2021
One travel shock took a fifth of the spending away in a year.

The spending side shows the same tilt. Travel and entertainment was 28% of billed business in the second quarter of 20263, and spending at airlines alone was about 6% of worldwide billed business in 20254. The largest partner is an airline, and the other cobrand partners the company names are Marriott, British Airways and Hilton5.

That concentration makes the fee sensitive to one kind of shock. In 2020 billed business fell from $1,070.5 billion to $870.7 billion6, and although card fees held up, a travel bundle is worth much less to a cardholder who is not travelling. The fee survived that year, but the bundle had to be re-sold on other grounds.

A slower version of the same risk is a change in how people value travel perks. If lounges become crowded, or airlines and hotels offer similar benefits directly, the premium card's bundle loses its edge without any recession.

The fee is also exposed to what partners decide. Airline and hotel benefits are negotiated, and a partner that wants more for its lounge seat or its free night can raise the cost of the bundle at renewal.

Airlines are also partners with bargaining power of their own. When American Airlines withdrew from Amex's airport club access programme in 2014, Amex named it in its risk factors as an example of losing a partner7. A travel benefit that depends on another company's lounges or seats can be withdrawn by that company.

The number to watch is the travel share of spending. It was 28% in the second quarter of 20268; a fall toward a fifth, while fees kept rising, would say that cardholders were paying for a travel bundle they were using less.

References
  1. ReportedAmerican Express competes, in its own words, for "lounge space in U.S. and global hub airports" and for "dining experiences".
    American Express Form 10-K for fiscal 2025 - Item 1A risk factors, competition and regulation. — FY2025 · publ. 6 February 2026 · source ↗
  2. ReportedIt opened its 31st Centurion Lounge, in Salt Lake City, at the end of 2025.
    American Express fourth-quarter and full-year 2025 earnings release, Form 8-K exhibit 99.1 - 2026 guidance and the dividend increase. — Q4 2025 · publ. 30 January 2026 · source ↗
  3. ReportedTravel and entertainment was 28% of billed business in the second quarter of 2026, and spending at airlines alone was about 6% of worldwide billed business in 2025.
    American Express second-quarter 2026 statistical supplement, Form 8-K exhibit 99.2 - segment results, card metrics, capital and credit - consolidated results, card metrics, capital and credit. — Q2 2026 · publ. 24 July 2026 · source ↗
  4. ReportedTravel and entertainment was 28% of billed business in the second quarter of 2026, and spending at airlines alone was about 6% of worldwide billed business in 2025.
    American Express Form 10-K for fiscal 2025 - card metrics: billed business, spending per card, cards-in-force, fees per card and network volumes. — FY2025 · publ. 6 February 2026 · source ↗
  5. ReportedThe largest partner is an airline, and the other cobrand partners the company names are Marriott, British Airways and Hilton.
    American Express Form 10-K for fiscal 2025 - Delta, cobrand partners and partnership concentration. — FY2025 · publ. 6 February 2026 · source ↗
  6. ReportedIn 2020 billed business fell from $1,070.5 billion to $870.7 billion, and although card fees held up, a travel bundle is worth much less to a cardholder who is not travelling.
    American Express Form 10-K for fiscal 2021 - billed business 2019-2021, average discount rate, net write-off rates, the 2021 reserve release and Delta shares. — FY2021 · publ. February 2022 · source ↗
  7. ReportedWhen American Airlines withdrew from Amex's airport club access programme in 2014, Amex named it in its risk factors as an example of losing a partner.
    American Express Form 10-K for fiscal 2015 - the end of the Costco relationship and its share of billed business, loans and cards; the three-party network; average discount rates 2013-2015. — FY2015 · publ. February 2016 · source ↗
  8. ReportedIt was 28% in the second quarter of 2026; a fall toward a fifth, while fees kept rising, would say that cardholders were paying for a travel bundle they were using less.
    American Express second-quarter 2026 statistical supplement, Form 8-K exhibit 99.2 - segment results, card metrics, capital and credit - consolidated results, card metrics, capital and credit. — Q2 2026 · publ. 24 July 2026 · source ↗
Sources
Generated September 28, 2026