Stash Hotel Rewards, the loyalty program designed for independent hotels, has doubled its partner network in the past two years, growing from 160 to more than 320 properties. According to CEO Jeffrey Low, this makes the company the largest stand-alone, points-based loyalty program for independent hotels in North America.
Independent Loyalty
“The idea of a loyal program for independent hotels is somewhat obvious,” Low told Hotel Management. “A lot of people want to stay at more distinct, interesting, independent hotels.” While many people want to support “local hospitality,” he noted, asking frequent travelers—especially those traveling for business—to give up the loyalty points they’ve accrued with the big companies can be “a big ask.”
The rewards that come from brand loyalty can be very important to frequent travelers who have to miss important family moments to be on the road, Low continued. These travelers can then take their families on vacation using the points they’ve accrued during their stays, making the sacrifices seem worthwhile.
At the same time, a loyalty program is important to hoteliers as a driver of direct bookings, which can directly affect a hotel’s profits, he added. “Getting a traveler to book [directly has an] enormous impact on a hotel’s bottom line, since the [online travel agencies] charge hotels between 15 percent and 25 percent for bookings that come through their sites.” Low estimated that chain hotels typically have a third as many OTA bookings as independent properties do.
Loyalty programs also help hoteliers get around OTA parity rates that prevent hotels from offering lower prices for booking directly than a potential guest might find on a third-party website. An exception to this agreement is member rates, which hotels can offer to members of their loyalty programs—an option that often is not available to independent hotels.
Building a Program
Low and his colleagues launched Stash in 2010 to fill this niche, developing a platform that could work with a range of property management and customer revenue systems. The platform began with 70 hotels and reached 160 by 2022. Today, the 320 partner hotels are located in the U.S., Canada, Central America, and the Caribbean.
“We could have 1,000 hotels,” Low said, but explained that the company’s policy is to only accept independent hotels with high rankings on crowd-sourced review sites like TripAdvisor or Google. (Star ratings are less important, he added. “Guest reviews are a better measure of your guest experience than star ratings.”)
A full 90 percent of Stash’s hotel partners have a ranking of 4.5 or 5 TripAdvisor, Low estimated—“and that's a higher average rating than any set of hotels participating in any [major] loyalty program.” Those rankings, he added, are not because of the loyalty program. “These are just extraordinary hotels that are run by people who are making decisions on how to customize a guest experience through their own intuition, not through some mandate by a franchise.” If a hotel falls below the standards, they exit the program. As soft-branded hotels are affiliated with a major brand, Low does not consider them truly independent and they are not eligible to join the program.
Most guest members join Stash at the front desk of a hotel, Low said. The company does little marketing and instead focuses on attracting potential members where they want to stay. Hotels, meanwhile, are eager to have their most loyal guests sign up for the program.
By the Numbers
Low shared statistics to back up his arguments. According to a 2014 Cornell University study of more than 50,000 travelers over a two-year period, Stash members stay 50 percent more often and spend $780 more annually at partner hotels compared to non-members. Another analysis found that 82 percent of guests who initially booked through OTAs transitioned to direct bookings after joining Stash.
Hotels join Stash under a one-year agreement. “There's no upfront cost, and then it's just month to month,” Low said. “So even though people aren't locked in, they can leave at any time—and yet, our retention is 95 percent, because it works.”