Stash Hotel Rewards launched on May 20, 2010. The loyalty program for unique, independent hotels initially focused on hotels in San Francisco, New York and Seattle and has now expanded to other cities in the U.S. We spoke with Jeff Low, founder and CEO.
InsideFlyer
How has Stash Hotel Rewards grown and changed since you launched?
Jeff Low
I think we started with 62 partner hotels. We’re close to 200 now and have a much more diverse set of partners. When we started, we were disproportionately along the coasts, which is where a lot of independent hotels are, and we made a concerted effort to find partners in the Midwest and other parts of the country. We’ve grown in terms of total number, diversity of properties and geographical location.
IF
What kind of challenges have you faced?
Low
We don’t have the same reputation as chain hotels because there are not as many great independent hotels in tertiary markets. That said, in many cities, there are already more Stash partner hotels than there are chain hotels. For example, we have around 14 partners in New York City compared to Hyatt’s four or five properties in the same area. We’re dense in these key destination areas and our goal is to be as big in the U.S. as one of the chains. We’re competing with established loyalty programs that have been around for 20 or 30 years and have millions of members and millions of dollars to spend on marketing. The level of awareness is less than that of the big chains, which is to be expected. What we do find in the new era of the Internet and social media marketing and communication is that people find out about the program and then tell their friends. Or they find out about the program at the hotel and connect with it. We want to be anti-chain and not have to go to our partners and extract the same amount of money as it would cost them to be part of a chain, which is why we don’t spend hundreds of millions of dollars on marketing.
IF
How do new hotels join the program? Do you search for new properties or do they approach you?
Low
It’s a combination. We generally partner with three and a half star hotels and above. We also look closely at social media ratings and TripAdvisor in particular. Our sense is that the last 100 people who stayed at that hotel have a better sense and can provide a more accurate representation of that hotel than the guy from Forbes who stayed there two years ago. Something that we are proud of is that 40 percent of our partners are number one or two in their market on TripAdvisor and the average recommend rating for Stash Hotel Rewards partners is 85 percent, which is much higher than the recommend rating for any set of hotels participating in a chain rewards program in the U.S. What we didn’t anticipate is that people are starting to use Stash as a filter. There isn’t really an index to find great independent hotels so people will go to our website to find highly regarded independent hotels. The model of the chain hotels are wherever you go, you’re going to have the exact same experience. That consistency used to have real value and the brand was a measure of quality. Now with TripAdvisor and other social media forums, it’s much less necessary to look to the brand as the marker of that quality.
IF
Do you plan on adding additional ways to earn and redeem points?
Low
There’s been a huge devaluation in the currency of both airlines and hotels. We wanted to be really disciplined in making sure there was availability and a great value for the points that have been earned. As you start to connect in too many other programs you have to bend your currency to accommodate that. There’s something about a closed system that creates a lot of value. Our view is that Stash can be the most valuable and you can earn free nights faster than you can with any other program because of the way it works. Our partners load rates into their systems that are far below market rates and that creates the value of the currency as being much more valuable than it would be in a bigger system or with fixed rates and categories. We are cautious about partnerships but we will certainly add a credit card.
IF
Have you considered introducing an elite program?
Low
An elite program is in the works and it will have tiers and accelerated earn. Other benefits will be late checkout and space available upgrades. The strength of our program is that independent hotels can create experiences and value that are unique to that place. Instead of the same amenity at each hotel, you might be in New Orleans and they might leave you a beignet in your room.
IF
Roughly how many nights will a member need to stay at a Stash Hotel Rewards member to earn a free night?
Low
It’s between 12 and 16 nights. When we do the math and compare that to other programs, that’s as fast as or faster than other programs. It seems so intuitive that pricing of rooms for redemption should be market based. And I think it’s extraordinary that it’s not. If it’s a Sunday night and their rooms are empty, our partner hotels can load rates that are much lower in terms of points than they have on a Thursday.
IF
What is your favorite Stash Hotel Rewards property?
Low
That’s a trick question. They are all different and we have some partners who have created really exciting experiences.
