Loyalty Points and the Death of Independent Hotels

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A hotel is never just a hotel. During a time when leisure and business travelers are nearly spoiled by choice, the question to ponder is whether you’re simply looking for convenience and a place to stay, or a property that can offer an experience you’ll be thinking about for years to come.

Many independent hotels pride themselves on delivering the latter. Unfortunately, they have been decreasing in supply over the years. “In 1960, 50% percent of all hotels in the United States were independent,” according to Jeff Low, CEO of Stash Hotel Rewards, a loyalty program for independent hotels. “Now, just 20% are independent. And of the hotels currently in the pipeline of development, 90% of them are chain affiliated.”

The Independent State of Affairs

Loyalty points are something most major hoteliers promote endlessly. Independent hotels, on the other end, don’t offer this perk as widely. This is the basis on which Low’s Stash Hotel Rewards began, connecting independent hotels around the world via loyalty points, so guests can experience one-off hotels that don’t exist anywhere else while also being incentivized.

Read MoreIndependent Hotels Decline Due to Mergers, Funding Problems

Low launched Stash Hotel Rewards 10 years ago with 80 hotels. Last year, more than 65 independent hotels and inns joined Stash; today, he is partnered with more than 220 independent properties—and has a collection of more than 1,000 that can be booked through the website—in North America, nearly all of which have a 4.5 or 5.0 TripAdvisor rating. “There isn’t a set of hotels that are more highly recommended [and] share a common major currency,” he says.

When booking direct at a Stash Hotel property—which the company encourages—guests receive their points like any other property, but its perks system differs in three major ways. “Our points never expire…there are no blackout dates,” Low says, “third, you can stay at independents and earn points that you can redeem at independents versus staying at another chain property.”

The Importance of Points

“Loyalty programs are really important,” Low says. “In part because if you’re a business traveler…you’re on the road all the time and [points] sort of become this measure of your life. You start to track how many miles or points you have and are dreaming of using those points to go on vacation. You may’ve missed your son’s soccer game or your daughter’s recital, but you’re going to be the hero because you’re going to take them on vacation.”

Points are a powerful driver, Low says. “A lot of business travelers have told us ‘I love that independent hotel in downtown Seattle but I can’t afford to stay there rather than stay at [a chain].’ It’s not the Marriott competing against with the Sorrento hotel, it’s the Sorrento hotel competing against the kids of that traveler—and they’re never going to win.” He added that it’ll never be the case that a business traveler will choose going to that independent when traveling over taking their kids on vacation.

What Stash tries to do is make it easier for that traveler to return to that independent hotel, by offering an incentive so that trade-off—”my type of stay or my kids”—is no longer necessary. “Once you level the playing field, the independents win,” Low says.

“When someone is considering where they should gather their sales team who haven’t  seen each other in two years or having their board of directors come together for an offsite, the meeting planner will put out different RFPs to different potential hosts of that event. With the chains, there’s often, if not always, an incentive provided to either member of that group or to that planner,” Low says. “That becomes a really important tool when these negotiations occur. Without a points program, the independent can’t compete in that bidding process.”

Low says his partners have seen success in guest visitation from individual business travelers, corporate groups and social groups, such as weddings. On-property software also allows Stash partners to learn about members before they arrive, allowing them to customize guest stays and better satisfy needs.

What’s Next?

While mass consolidation of hotel companies is ever increasing, Low says there’s also increasing interest in “interesting travel,” and  entrepreneurs and local business owners who have an interest in doing something different and creating an experience reflective of their community.

Something Low also sees growing in supply is restored roadside motels—what he aptly calls “motiques”—that modernize and still pay homage to what they once were, in the form of vintage furnishing, old signs and images of what the motel once was. “There’s a generation of travelers who really seek that out,” he says. “So now you can go along Route 66 and stay at hotels you may not have wanted to drive past before.”

Low went on to note that motels are  associated with places you wouldn’t want to bring your family to, and perhaps a bit creepy. But with the update these properties have received, he believes the experience has changed to the more interesting and fun.

As for the future, Low says Stash will expand beyond North America. “Currently, we have partners in the U.S., Canada, Mexico, Central America and the Caribbean,” he says. “Members have been asking for us to expand to Asia, the Pacific Islands, and Europe, and there are tens of thousands of independent hotels in need of a loyalty program in those regions.”

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