The site carries a clever value proposition for its intended audience and the prospect of double dipping into loyalty programs, but its biggest obstacle will be clearly outlining its benefits and converting bookers.
PointsHound is a new hotel booking website that allows users to earn airline miles for room reservations. The site’s unique value comes from its ability to offer as much as nine times more miles than standard loyalty programs.
Founder Peter Van Dorn readily admits that the site is “entering a really crowded space,” but thinks the site’s targeted users — frequent flyers and travelers obsessed with collecting/counting points — will see the value in reaping airline points for a hotel room they’d already be booking.
How it works
PointsHound offers customers more points than its competitors by taking a portion of its commission and buying airline miles to give back to bookers. The miles serve as an incentive to book on PointsHound.com. Users can move up through three levels of increased rewards by booking five or twenty rooms through the site. First time users earn 100 points just for signing up and 500 additional points for referring a friend.
The average reward is 3-4 miles per a dollar spent, but it varies depending on the hotel, the airline loyalty program, and the user’s level on the site.
An Expedia affiliate
PointsHound is currently partnered with United, Delta, Hawaiian Airlines, and AeroMexico. Although airlines expressed concern that the site would cannabalize hotel bookings through their own websites, PointsHound is not reaching out to leisure travelers, who most commonly book hotels through airline websites. All PointsHound bookings are done through Expedia.
The site’s biggest obstacles will be user acquisition as it is created for a very niche group of travelers. Van Dorn best described the site’s audience as “readers on Flyertalk.”
The business model lends itself to long-term growth. Loyalty currencies could transcend airline points to include all virtual currencies from Best Buy points to credit towards car rentals.
The self-funded site has been live for three weeks.