Daniela Cerboni's speech - Hangzhou, March 2009

Good Morning!

Thank you so much for giving me the opportunity to be with you today in Hangzhou, China. It is truly an honour to be invited to speak with you once again.

Let me start by thanking our host, President John SUN DONG. John and the Organizing Committee have done an incredible job creating this event. Everything is exemplary and I am truly impressed. This is my first time to China, and I am so grateful for your incredible hospitality.

I also want to thank my friend Aldo GIACOMELLO for inviting me to join you here this week. Aldo has been a great ally and collaborator over the past many years, as we work to build and enhance the relationship between our two organizations.

And, of course, I want to thank the International President of Les Clefs d’Or, Roger BASTONI, for his support, which has helped to make the relationship between American Express and Les Clefs d’Or so successful these past years. Now, I look forward to working with your new president, Robert WATSON, and wish to congratulate him as well on his new role and responsibilities.

Many of you are old friends and others of you are new to me, but due to our association with Les Clefs d’Or, I feel like we are friends already. Like you, I am proud of my association with Les Clefs d’Or. And I am proud to be a part of the incredible relationship between Les Clefs d’Or and American Express.

As Mr. Giacomello shared with you, I am responsible for American Express’ luxury travel and lifestyle services for our premium customers, Platinum and Centurion Cardmembers, throughout American Express’ 25 markets worldwide (outside of the United States).

In this role, I work with an incredible team of people who share a passion for travel, for service and for luxury. It is a privilege to work with some of the best service professionals in our industry, for one of the world’s most respected service brands, and in our most premium business. I have to admit that, even in today’s challenging environment, I love being a part of the Luxury Travel business.

I was very happy when Aldo Giacomello, who has collaborated closely with American Express and me personally over the years, asked me to join you today. This gives me a great opportunity to thank you for your support to our customers every day and share my thoughts on how we can continue to support each other in the years to come.

I have always been impressed by the passion that you all bring to this organization. I have seen first hand the way that you collectively make Les Clefs d’Or successful, through your incredible willingness to work together and through your shared passion for service. Within my own organization, we have several Les Clefs d’Or members, and they are highly valued assets! I very much appreciate the pride and passion that they bring to their profession and to this organization. It is truly inspiring.

I travel quite extensively in my work and spend an extraordinary amount of time in your hotels. You and your peers help to make some of my traveling life a pleasure. You represent the best in service excellence in our industry – a standard that I prize very highly. The relationship between our two organizations is such an important part of the way American Express is able to achieve the extraordinary for our Cardmembers.

I have to say that in the past year, American Express and Les Clefs d’Or have continued to make good progress, working together to help both of our organizations be more successful and to enhance the experiences of our mutual customers. I am always impressed by the ways in which my team at American Express will work with your members to create memorable experiences for our clients, and your guests. In the past year we have made dozens of wonderful things happen:

 In Switzerland, we needed to purchase a special teddy bear for a guest with a special Swiss logo T-shirt and have it placed in his hotel room in St. Moritz. The Concierge took care of every detail for us and our Cardmember was thrilled.

 One of our Cardmembers wanted to dine at the private Milk and Honey dinner club in New York City. A Les Clefs d’Or member was able to provide us with an excellent contact and we could arrange this exclusive reservation.

 Angel Masa at the Villamagna Hotel in Madrid is our key to obtaining tickets to exclusive bull fighting event.

 Another Concierge in Madrid helped us secure an Aston Martin to rent after all other avenues failed.

 In PARIS, Pilar at the Four Seasons George V always helps our customers with difficult to access restaurant reservations and a Concierge at the Plaza Athenee helped within a short notice to book a table at the fully booked restaurant Jules Verne and tickets to the Eiffel Tower.

 We needed to locate a special edition Seiko watch for a Cardmember, and the Concierge at the Four Seasons Tokyo was able to find, purchase and ship the watch to Moscow to a very happy client.

What it comes down to is this: Our two organizations share much in common. Most importantly – our Cardmembers are your guests. We arrange the holidays and business trips that bring these guests into your hotel and, ideally, we work with many of you to ensure that the travel experience is exceptional from end to end.

Today, I want to talk with you a little about the current state of our industry, the impact that the current downturn is having on our business, and what American Express is doing about it.

I also want to talk a little about the unique opportunities that I see to become better, more focused and deliver more value than ever before.

And finally, I want to outline for you how I hope that our two organizations can continue to work even more closely together, in more parts of the world, to benefit both of our companies and our mutual customers - your Guests.

Our fates have been entwined since the beginning. When Les Clefs d’Or was founded in 1929, American Express was already almost 80 years old and well into the era of serving travelers around the world.

When I reflect on our history, I see a clear connection between our humble beginnings and the company we are today. The attributes that made us successful in those early days – a commitment to our customers, to integrity, security and trust – are the same attributes that make our American Express brand successful now.

Over the past 159 years, American Express has been through a great deal of challenge and change. And through it all, our company has remained resilient and strong. I believe that the challenges of today are just another test of that resiliency - - we are working now to emerge from this downturn even stronger and in a better position than ever before to be successful by providing a unique and unmatched level of service to our Cardmembers worldwide.

The truth is that our fates remain intertwined still today. Most importantly, your hotels and our travel service are interdependent. We drive each other’s success and we need to work together today, more than ever, to create opportunities for innovation and growth.

For Les Clefs d’Or this means understanding what our challenges and opportunities are and creating ways to deepen our customer and guest relationships to create higher levels of engagement (or guests using your service) and loyalty (or guests returning to your hotel again and again..)

Now, let me talk a bit about the current state of our industry, the impact that the current downturn is having on our business, and what American Express is doing about it.

This has been an incredible year for all of us. When I spoke at the Les Clefs d’Or conference in Copenhagen just over a year ago, the world looked very different than it does today. I think it would be fair to say that a year ago, we all felt a bit more optimistic than we do right now. A year ago, I saw a study that anticipated that worldwide wealth would continue to grow at a rate of 6.8% over the next several years. Today, the prevailing sentiment is that things will definitely get better, but no one is betting on when.

At American Express, we are watching the developments very closely to help us manage our business through the difficulty. Let me share with you some of the things we are seeing in our business:

The travel industry is a critical part of the world economy. A healthy travel industry is a powerful stimulus and is pivotal to economic activity and growth. But, unfortunately, there are some impacts of this recession that are particularly affecting our industry. In past recessions, spending by affluent consumers held up relatively well compared to the broader population, which insulated American Express to some extent because of the concentration of high-income Cardmembers in our portfolio.

This downturn is different in that it is hitting the affluent segment particularly hard. Many of these consumers have significantly cut back on their discretionary spending, as they have seen their home values, personal wealth and job security erode.

The impact on the affluent in this recession is very different than any time in the past. Our high-wallet customers, even Centurion, are budgeting in a way they never have before. They're still spending a lot by most standards, but it's less that before.

Business travel is being impacted by both the need to reduce budgets and the need to appear frugal. This means that companies that are expected to be conservative in their spending are shying away from any travel that seems luxurious or indulgent.

Because of this, we are seeing discounting, even in the high end, where this is not the norm. For example, the Cruise lines, even the very high end, are discounting the sailing and offering tremendous value-added benefits in order to entice passengers. Hoteliers are offering significant price discounts and airlines are discounting even the front of the plane.

Most of our past research told us that the luxury market was much more focused on quality and value than price. Under today’s conditions, we need to understand if this equation is changing and if these deep discounts will get people traveling again.

For American Express this has a few implications. Our company has a history of innovation, and I look at this moment in time as an opportunity to change the way we do some things. Most importantly, we making changes to our business model that allow us to deliver an even higher level of bespoke service to our very best clients.

Why make this change now? Well, we believe that our best customers are our best opportunity now and in the future, to be successful. We are shifting to a more bespoke level of service so that we can earn more of our customers’ business. Today, we know that some of our customers use us for all of their travel and lifestyle booking. Some Cardmembers use our service some of the time. And there are a few Cardmembers that never call us. It seems unimaginable, but there are people who pay a premium fee to carry our Centurion Card, but never utilize our service!

So, we are going to start working with these top and high potential customers on a personal basis. And if you think about it, this model is a little like what you do. It is most often the personal interaction, or introduction, that creates a successful interaction between Concierge and Guest.

We are also using the time and flexibility created by this downturn to work more closely with our industry partners to create marketing partnerships and initiatives that we can test and explore now, and be ready to move fast when conditions improve.

When we book a trip for a client, their relative satisfaction with that booking has a lot to do with the service we provide. But it has even more to do with their experiences on that trip. The flight. The transfers. The Hotel, room and service. The destination, the meals, the entertainment, even their traveling companions, all have an impact on how much our client enjoys his or her trip.

There are critical symbioses between our two organizations that allow us to have some impact on the total experience. You in this room have the opportunity to deliver the service that is at the heart of what travel truly is for most of us. No one does that better than those of you in this room!

As I said last year, in Copenhagen, I believe that there are several ways in which our two organizations can work together even more, to ensure that we all maximize the opportunity we have to benefit our customers and our own businesses as well.

I think that there are three specific opportunities that we have to work together:

First, in a very practical way, we can work together to be sure that our best customers enjoy seamless service from their initial contact with American Express through their stay in your hotels. Our Cardmembers frequently contact us for concierge assistance within their home market. When our Cardmembers travel, they rely on you, their Hotel Concierge, to provide your hallmark assistance.

When we book our top clients at your hotel, we can and should provide you with information to help you to provide service to our mutual clients that is more personalized and more proactive. We can help you to surprise and delight your clients.

I think that this opportunity benefits us in three ways. I am able to deliver a higher level of service to my customers by recommending your hotel, knowing that my Cardmember will receive a higher level of service. You have an advantage in being able to provide a more proactive degree of service to some of the hotel’s best customers. And of course, the Hotel benefits by attracting and retaining the best of American Express Centurion Cardmembers when they visit your locale.

The second specific opportunity for us to work together is in the local support that we provide to our customers. We pride ourselves on delivering an incredibly high fulfillment rate for our Centurion Concierge service. We have, in the past, been able to fulfill these requests, thanks to you and your colleagues. Our Cardmembers know that they can come to us to make their dreams come true.

This support – YOUR support – is critical to our ability to serve our customers. I believe that the concierge that do support us on these requests understand that again, these are our best Centurion Customers. There is an advantage to helping to fulfill these requests because it deepens relationships among you, your hotel, the restaurateur and, of course, the Guest.

Of course, this support is reciprocal and we are committed to provide a similar degree of help whenever you need it. I know that in many markets, our chief lifestyle experts work directly with many of you to provide seamless service to customers when they are at home or at your hotels.

Finally, I want to talk about the third area where we can work closely together – which is when it matters most: In emergencies.

Customers have grown to trust American Express for the security that we provide. In every crisis, American Express is there to support Cardmembers away from home. Much like all of you, it is in our DNA to help when our customer need it.

In 1989, when an earthquake struck San Francisco, our office was open, with a candle in the window, to help Cardmembers in need.

Our team was there in 2004, through the Tsunami in Southeast Asia and in 2008 during the attacks in Mumbai, to contact Cardmembers, offer to help, relocate to safety, and to track down missing loved ones.

And when a hurricane struck Mexico and the Cancun area, our team worked tirelessly to fly customers to safety or relocate customers to unaffected areas of Mexico. I know that you, too, are on the front lines in times of crisis and I know that in the past we have worked together to help our clients when trouble strikes.

We work together today in so many ways, informally and based on personal relationships. I want to build on that history by creating a deeper relationship that will help us both accomplish what we want most – the opportunity to provide an extraordinary experience for our best customers.

True luxury reflects superior functionality and enduring value. I can tell you that “extraordinary” is really the essence of what American Express Premium Service is all about. Our customers want authenticity and exclusivity. In a world of choice, our customers want us to understand their motivations and anticipate their future needs. This is how we will continue to earn our customers’ loyalty in a world where there is limitless choice.

It is about that something extra. It is about seizing the moment and creating something spectacular. Sometimes this means a brilliant recovery when we make a mistake. Sometimes that means extraordinary care for our customers in a crisis, like a hurricane. Sometimes it means finding a lost camera or wedding ring. And sometimes it simply means listening to our customers, and providing the right solution to their needs.

I truly believe that travel is more than an industry – it is the way that people come together in a cultural exchange. I believe that both Les Clefs d’Or and American Express play a part in that exchange and that we make a difference to our customers, to our employees and to our industry with our commitment to quality and to service.

All of you in this room share a collective commitment to delivering the best. You help to raise the standard for everyone. Because of this commitment, I believe that Les Clefs d’Or does and will continue to define itself as an organization and the way in which each of you creates your own future.

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Before I close, I want to talk for a minute about the future of the relationship between American Express and Les Clefs d’Or. Over the past five years, American Express has been proud to be a sponsor of Les Clefs d’Or. This year, once again, we have been able to sponsor this event, even during this time of reduced investments. We make this investment because we see tremendous opportunity in having an established relationship with Les Clefs d’Or both internationally and a local level.

As a next step in deepening our relationship, I have asked that Aldo Giacomello take a more active role in looking after this relationship. I know that Aldo will work with all of you and your colleagues to ensure that we all benefit from our association. American Express wants to continue to invest in Les Clefs d’Or, and with your support, we can continue to do that.

I have asked Aldo to please work directly with the various Les Clefs d’Or entities to identify ways that we can work more effectively together. Aldo has come to understand the needs and workings of both of our organizations and can well support both of our interests. There is vast opportunity for this relationship to deliver even more value to both of us, it is important that there be a main point of contact. In this capacity Aldo can work with you and your members to be sure that we are making progress together, to be sure that there is value being created on both sides.

For example, it would be better for both organizations if we can improve the level of central coordination between American Express and Les Clefs d’Or. Any local or regional initiatives or events should involve Aldo, so that he can be sure that we are aligning our expectations and opportunities. Going forward, I hope that we can improve that level of coordination overall. I am in close contact with Aldo regularly and I know that he understands what American Express expects and needs – and what Les Clefs d’Or wants from us as well.

Over time, I hope that we can expand the value of our relationship on both sides, so that both of us benefit through increased business for your hotels, increased satisfaction of our Cardmembers and your guests and a higher level of engagement with the services that we both offer.

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I want to close by again thanking Aldo GIACOMELLO for his collaboration and support over the years. His personal commitment to this relationship is clear and on a completely voluntary basis. If any of you have any questions or input on how we can make the relationship between our organizations even richer, I suggest that you speak with Aldo, who I know will be more than happy to consider and support your suggestions.

I also want to thank Roger BASTONI, your outgoing International President as well as the entire Executive Committee for the invitation to attend today and for your ongoing support, which has been invaluable to the success of our relationship.

I also want to thank Robert WATSON, your incoming International President, who has facilitated the implementation of our relationship from a very practical perspective and is a critical part of our relationship with Les Clefs d’Or.

Again, my thanks to John SUN DONG and the organising committee for producing such an impressive event. The work he is doing in China is exemplary and bodes well for the future of service in this part of the world!

Finally, I want to thank YOU. Thank you for your time, thank you for the opportunity to be here with you, and, most of all, thank you for your relationship. We are also looking forward to continuing to work with all of you now and into the future.

D. Cerboni