Independent hotels bound together under a single hotel loyalty program currency is a good idea whose time has come. Stash Hotel Rewards has launched a marketing campaign hitting the major industry papers this week. I’ve seen articles all week in trade magazines and Hotel Chatter. Stash Hotel Rewards even sent me a press email. I debated today whether to speak with the company representatives or write a blog analysis first. I have looked over the website and have some comments to make and then we will have more to talk about in an interview if that happens later.
Stash Hotel Rewards website catch phrase:
“Finally, a hotel rewards program that lets you stay where you want.”
Well, not for the time being. There are currently only 65 hotels registered with Stash Hotel Rewards although the press release anticipates 200 hotels by the end of 2010.
“Break free from the compromises and restrictions of big chain programs.”
The loyalty marketing angle for Stash Hotel Rewards appears premised on portraying corporate hotel chains as bland and inauthentic travel experiences.
And what exactly are those big chain compromises and restrictions?
Free internet, complimentary breakfast, free nights, potential for paid nights to earn a 100% rebate in free nights; global properties to earn and burn points, a bed that is solidly constructed and supportive.
The marketing message from Stash Hotel Rewards is geared to make big hotel chains seem like the territory of uninspired travelers.
I guess my Uncle Jerry is the true inspired traveler of the family since he was staying at the Stash Hotel Rewards member King George Hotel last month in San Francisco on his $75 rate while my sister was in a balcony room at the Hyatt Regency Embarcadero with a bay view and I sat in a 31st floor suite at the Westin Market Street with an expansive view.
I have to admit that after the third stay in the Westin suite this past year that I was feeling a little uninspired. But my room visitors were first-time impressed with the size of the room and southern city view to the AT&T Ball Park. I paid $98 to be uninspired.
Of course I jest – about being uninspired. The room and view and rate are all facts.
The basic attributes of the Stash Hotel Rewards program
- Members can book different room categories for points. Several programs allow loyalty members to book just the lowest category standard room using points. Many of the Stash Hotel Rewards hotels I checked allow members to choose from several room categories using a range of points for basic rooms to premium room types like suites.
- points never expire
- earn points for two rooms
- potential for points bonuses and member special offers
- Earn points on room rate only. (No points for food, beverage, spa, movies, etc.)
- Low rebate value (4 to 8% in sample hotels I analyzed)
- only US hotel members
- only US citizens allowed to join program
- 1,500 point change or cancellation penalty at anytime after booking reward night and additional points for hotel imposed cancellation fee if within 72 hours (or hotel’s specific cancellation policy). The 1,500 points change fee is waived for changes when the new booking requires more points.
The primary drawback I see with Stash Hotel Rewards is the 1,500 points change or cancellation fee. That is $300 worth of points credits lost just for changing a reward reservation.
Personally, I probably change about 50% of my reward reservations booked through the big chain hotel loyalty programs before my actual hotel stay. The Stash Hotel Rewards change fee would be detrimental to my points balance.
Update: June 4 – Subsequent to this article, Stash Rewards has changed the cancellation policy to eliminate the 1,500 points cancellation penalty. This is a significant program improvement.
The Stash Hotel Rewards policy now reads:
What if I have to change or cancel my reservation booked with points?
Cancellations: If you cancel before the hotel’s cancellation deadline, we’ll return your points to your account. Cancellations after a hotel’s deadline (usually between 24 to 72 hours, but sometimes longer) are subject to a hotel penalty and may require a forfeit of some or all of the points used for the reservation. If you forget to cancel or fail to check in, no points will be refunded to your account.
Changes: To change your reservation, contact Stash Concierge Service at the number on your booking confirmation.
How long does it take to earn a free stay?
The Stash Hotel Rewards claim I want to analyze is “Earn free nights ridiculously fast.”
My complaint looking over the website is the FAQ response to “How long does it take to earn a free stay?”
Typically, just five stays is the website response. No actual details on how five stays earns a free night is derived.
This is not a transparent answer. How many nights are they considering for each hotel stay and what room rate are they using for this estimate?
I assumed $150 x 2 nights per stay x 5 stays = $1,500.
$1,500 x 5 points/$1 = 7,500 points.
The Redeem Points webpage shows me Cedarbrook Lodge, Seattle is 10,000 points for a free night from November 1-December 31, 2010. After spending $1,500 I still need 33% more points to get one free night in the off-season in Seattle.
When I check the rate for Cedarbrook Lodge on Saturday night, August 14 the rate starts at 17,900 points for a Deluxe Queen and 19,900 for a Studio Suite.
Checking rates on the Cedarbrook Lodge website I find a Deluxe Queen is $128 or $144.04 after tax for a 21-day advance with a 20% discount and no cancellation or changes.
$144.04/17,900 points = $8.05/1,000 points. It takes $3,580 in room rate spend to earn 17,900 points for a free $144 room night. This is a Stash Rewards hotel spend rebate of just 4.0%.
The AAA refundable rate for Cedarbrook Lodge totals $192.44 for one night in a Studio Suite.
$192.44/19,900 points = $9.67/1,000 points. This is a loyalty points return on hotel spend of just 4.8% when redeeming for the Studio Suite.
$4,000 in hotel spend earns a free $200 room night.
A 4% to 5% return on hotel spend is quite low, particularly since points are not even earned for incidental hotel spend as is common in many “big chain” hotel loyalty programs. Starwood and Hyatt even give points for hotel restaurant spend when you are not an overnight guest at the hotel.
San Francisco Stash Hotel Rewards earn and burn rates for June 4, 2010
King George Hotel (3.0 star)
- $101 base rate or $118 (after tax).
- Earn 505 points.
- Free night = 12,900 points.
- Redemption value: $118/12,900 = $9.15 / 1,000 points (4.6% rebate)
Hotel Griffon (3.5 star)
- $159 base rate or $181 after tax
- Earn 795 points
- Free night = 11,900 point
- Redemption value: $181/11,900 = $15.21/1,000 points (7.6% rebate)
The Inn at Union Square (3.5 star)
- $189 base rate or $215 after tax
- Earn 945 points
- Free night = 16,900 points
- Redemption value: $215/16,900 = $12.72/1,000 points (6.4% rebate)
Stash Hotel Rewards Compared to Hotels.com Welcome Rewards
Hotels.com Welcome Rewards provides a 10% return with their free night after 10 nights. Basically you earn a hotel credit equivalent to the average rate of your past ten hotel nights. Spend $1,500 after ten hotel nights and you can redeem hotel credit for $150.
Cedarbrook Lodge Deluxe room is $127 on Hotels.com for August 14.
All in all, the idea of a hotel loyalty program for independent hotels is a great idea, but I’ll have to see a much better earn and burn ratio for Stash Hotel Rewards points, member bonus opportunities, and redemption specials to convince me this is a viable marketing program consumers will find appealing.
For the time-being I would suggest travelers seeking independence from big chain hotels go with Hotels.com for a more generous rebate of 10% on your hotel spend.
Sometimes I Feel so Uninspired
I am not tossing my elite membership with the big chains. Sure – I can’t tell the difference between the aloft Denver Airport and aloft Portland Airport when sitting in the room, but I know that the points and loyalty credit I earn can save quite a bit of money when seeking a Starwood Hotel somewhere else in the world.
My inspiration comes from where hotels are located more than the hotel itself. Typically the big chain loyalty programs provide a minimum of 20% return and upwards of 100% rebates on hotel spend with promotions like Starwood’s “stay three times and earn a free night”.
The value of the big chain hotels are the geographic distribution of a hotel chain with 500 to 5,000 properties around the world. The big chain hotel room may not always inspire me, but stepping outside the hotel front doors in downtown Manhattan, the Magnificent Mile in Chicago, the beaches of Cancun, or the Champs Elysees in Paris is where inspiration for this traveler lies.