Airline miles are good if you want to fly on the off date when seats are available using miles, hotel points are useful in the same way and cash back is always useful for just about everything, but lacks arbitrage.
But what about a currency which offers opportunities for all of those things, not just one, and actually much-much more too? Of course, that already exists, but there’s a strong new entrant, which is quickly exiting beta.
Credit card loyalty points currencies like American Express Membership Rewards, Chase Ultimate Rewards, Capital One Venture Miles, and Citi Thank You Points have long been the gold standard in savvy rewards, with multiple airline and hotel partners alongside opportunities to spend points on everyday things, like wine or cash back.
From out of the ashes, a bold new play is being launched which could challenge the traditional status quo of transferrable loyalty currencies, and the impacts could be far reaching. The Virgin Group has launched Virgin Red, and it’s worth paying attention to.
Virgin Red Loyalty Program
Virgin Red is the new loyalty program of the Virgin Group. Not Virgin Atlantic, Virgin Hotels, Virgin Wines, Virgin Money, Virgin Media or any other individual part on its own, but in time, all together as one.
The basis for the new program is ‘Virgin Points’, which will replace individual currencies within each Virgin business. If you have any ‘Virgin Atlantic Flying Club Miles’, those are now ‘Virgin Points’, and can be used in the same ways as before with Virgin Atlantic, but now also with an increasing array of rapidly emerging possibilities.
One of one, is one of the other.
This week, Virgin Red launched to Virgin Atlantic Flying Club members, after a few months in beta. There’s 500 Points in it for you to get started. The program offers new partners and opportunities to use points, and for now is primarily focused on the UK, but GSTP understands the USA is a massive goal.
For a start, you can instantly redeem Virgin Points for things like a sausage roll at the beloved UK bakery chain ‘Greggs’. You simply login on the Virgin Red app, you select Greggs as a way to redeem points, and receive a QR code good for your purchase in store.
It’s best believe efforts are being made for similar integrations in the USA and beyond. In time, the app will expand to one tap purchases using points of concert suites, wine deliveries, stays at Virgin properties, including some Richard Branson retreats; and additional ways to earn, too.
As you’re liking piecing together, the ability to redeem points will go far beyond traditional airline seats, in ways which only flexible bank currencies typically provide today. Amex Points can get you concert tickets, can be used for PayPal, Amazon, hotels and airline seats, but few others have that reach. Virgin will.
Presently, you can redeem Virgin Points on Delta, Air France, KLM, ANA, Air New Zealand, Singapore Air and a variety of other airlines, in addition to converting points into hotel points with IHG or Hilton, and that’ll all remain.
The difference is, you’ll soon also be able to redeem the very same points without needing to move or transfer them across, for more hotels, more daily activities and who knows what else. Space comes to mind.
You’ll also be able to earn them, in addition to any earnings on credit card spend, for choosing Virgin brands and engaging with them. Loyalty will actually be about loyalty, and the more you participate, the more you earn.
Joining Not Replacing
Virgin Red won’t ever replace credit card rewards currencies, but it’s making a strong case to become a new kind of “mile” or “point” which is far more appealing than your bog standard air miles or hotel points.
Other currencies, such as Marriott Bonvoy Points have made forays into offering opportunities outside of traditional hotel stays, with concert suites on offer for points, and dining experiences too, but even large global hotel brands haven’t ventured quite as widely into the territory the Virgin Group has, at least not on an ongoing basis.
The scale and variety of the Virgin operation lends itself handsomely to future points redemption partnerships in more long term ways than others.
You may quite literally be able to use Virgin Points from Virgin Red to go to space in the next decade.
A quick look at the number of Virgin businesses across film, media, telecom, air, hospitality and it starts to look like those Virgin Atlantic Miles you almost cashed in for nothing may become far more valuable than their present. And that’s a key point of distinction. Math!
There won’t be any “one Virgin Atlantic point is 4 Virgin Media points which can be transferred into 2 Virgin Hotels points”. One Virgin Point is one Virgin Point, and all points have already been converted 1:1. If you had 100,000 miles last year, you have 100,000 Virgin Points today. It’s that simple and will stay that way.
The ‘proof in the pudding’ remains to be seen, but the framework of Virgin Red is built on rails other airlines, hotels or non-bank entities would struggle to replicate in any reasonable timeframe.
Within a year, it could become a leading loyalty currency that appeals far more broadly than most. It may never quite offer what Amex or any other leading rewards credit card currency can, but it may come a whole lot closer than others.
This sounds like a smart move but there are some clear challenges:
1) the various Virgin Group companies are not owned by Virgin; they are effectively all independent businesses who pay a licence fee to use the Virgin brand. There is no common IT infrastructure and getting diverse businesses to work in the same way is akin to herding cats; after all, it will be these businesses that have to fund this scheme, not the Virgin Group.
2) Many of these businesses do not have a full UK presence, let alone a worldwide one. For example, where I live in the North of England, there are no Virgin gyms, I can’t get Virgin Media in my area and the nearest airport is Manchester, from where there are far fewer Virgin flight options than if you are based in London.
3) This all needs a strong and vibrant Virgin Atlantic to provide the strong foundations upon which the new Virgin currency can be built – there remains considerable debate as to whether the airline will survive the current pandemic and, if it does, then what shape it will be in.
4) Virgin Atlantic’s focus is long haul travel which means i. you need more points to be able to redeem and ii. long haul travel is likely to take longer to recover than short-haul from COVID-19. Whilst there are indeed options to redeem points via Air France/KLM, flying via Paris or Amsterdam isn’t attractive for UK residents making short trips to Europe. BA has a clear advantage in this regard, especially for people living in Southern England.
I hope it works and it’s interesting Virgin Money has already started the process of trying to work with other Virgin Group companies – e.g. by recently giving a case of Virgin wines for opening a Virgin Money current account. However, whilst this is a bold move with lots of promise, I think there is lots more work needed and a long way to go before you can even start speculating that the new Virgin currency will become as valuable as AMEX points. That said, signing up Tesco was a great way to signal the intent.