As rewards programs have become an increasingly integral part of travel, independent hoteliers have found it harder to compete with the big chains and their programs, particularly for frequent business travelers. To help level the playing field, Jeff Low, a former executive at Expedia, has developed Stash Hotel Rewards, a program for nonbranded properties or small brands, such as Affinia, which is one of its first members. Hotels editor Jeri Clausing talked with Low, who is CEO of the company, about Stash and how it differs from traditional loyalty programs.
Q: What sparked the idea for Stash?
A: I was at Expedia for a number of years, where I created their loyalty program. During that time, I found that I was often staying at independent hotels because they were more representative of the [area], or they offered some level of customization. It was the Affinia 50 property [in New York] where it resonated most. It had a unique level of comfort that I hadn't found at anything else in the area. I was staying there a week, a month, and didn't have anything to show for it in terms of points I could use to take my kids [and] my wife on vacation.
I left Expedia and started working on this idea, first by talking to lots of independent hotels and frequent travelers. I found that people on the road all the time are seeking something more personalized. They are not interested in the sterile sameness. But there was this trade-off.
Q: Does this mark an evolution of sorts for rewards programs, which were, after all, founded with the idea of creating loyalty to one brand?
A: I don't think Stash creates brand promiscuity between independents. What it does is level the playing field and allow the independents to compete more effectively. That is really important, particularly in these tough economic times, and when business travelers, who represent a huge amount of room nights, are significantly influenced by the ability to earn these points.
Q: Tell me more about how this works, how you make money and how points are earned and redeemed.
A: There are two pieces. On the earn side, you earn five points per dollar spent on a room at any hotel in the program.
On the redemption side, we think that is one of the areas where our innovation is pretty significant. Most chain programs have a fixed rate of redemption: say, 10,000 points to stay at Westin in Seattle. That's a fixed number, and the hotel only gets a fraction of the room value. We think that's totally broken.
Under our program, hoteliers can yield-manage. If it's August and Seafair is in Seattle, they can sell the room for more points. If it's February and there is less demand, then the partner can sell for fewer points.
Q: How are the points paid for, and how do you reimburse the hotels?
A: The points are roughly worth a penny. We pay the hotel directly at the time of redemption, in cash. They load the rate, and that's what we pay them for. The points that are given out are funded by the hotel. They pay us, and we hold that in a common account for when it's time to redeem.
Q: How many hotels are in your network, and what is your goal?
A: I think we are at 81 right now, and we are on pace to have about 200 by the end of the year. We are already in key markets like New York, Seattle and San Francisco.
Q: Do you have plans to go international?
A: Definitely. We already have a partner. Then we plan to expand to Mexico and then Europe.
This column appeared in the Aug. 9 issue of Travel Weekly.