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How do you scale a business in terms of adding both new customers and partners?
Stayful, a three-year-old startup with a consumer app for booking boutique and independent hotels at negotiated discounts, thinks it has found what appears to be a unique way to accelerate the growth of its business.
Stayful is providing mobile check-in, checkout and concierge services during the stay to independent and boutique hotel partners for free in exchange for the hotels encouraging their guests, including those who have booked the hotel directly through the hotels’ own channels, to download the Stayful app.
In addition to providing these free services to hotels, many of which don’t have their own apps, the hotels earn commissions from Stayful whenever their guests book a different hotel, whether it is on the other side of the city or across the country and beyond, through the Stayful app.
“We expect this to considerably accelerate our growth and we are seeing the beginnings of that now,” says Cheryl Rosner, co-founder and CEO of San Francisco-based Stayful and former president of Hotels.com.
How It Works
Before we discuss the potential advantages and disadvantages for hotels, let’s take a look at how this the Stayful business model with boutique hotels works.
Just before the stay, guests from a participating hotel receive a message from Stayful on behalf of the hotel that might say: “Dear Edgar, Your stay at [hotel’s name] is just around the corner. We have partnered with Stayful to offer you a new and improved experience from check-in to check-out.” There’s a button, saying: “Download app and check-in now.”
The message continues: “With the Stayful app you can check in to your room, chat directly with your Stayful Concierge, check out and more.”
Stayful sends these messages on behalf of the participating hotel because the property has shared guest contact-information with Stayful.
Once the guest has downloaded the Stayful app, guests can provide to Stayful a photo of themselves and a government-issued ID, which Stayful gives to the hotel front desk. In theory, the hotel-front-desk personnel will recognize the guest who has checked in through the Stayful app upon entry into the property and just hand the guest a key.
Around the time the guest gets into the room or shortly thereafter, Stayful sends the guest a message through the app inquiring whether everything is OK with the room and whether the guest needs anything, including concierge services to get theater tickets or dinner reservations, for example, Rosner says.
Rosner argues this gives properties a heads-up on customer service issues instead of waiting to learn about it after the stay when the result may be a negative TripAdvisor review.
At this point, during the stay, although the hotel doesn’t get branding in the Stayful app, through imagery the app takes on the look and feel of the hotel.
If the guests wants to change rooms or needs extra towels, Stayful messages the appropriate hotel department such as housekeeping or food and beverage, or communicates these needs to any of the hotel’s backend service providers such as Alice, Checkmate or others, for instance.
Guests using the Stayful app at the hotel get tagged and when they subsequently book a different hotel through the app, whether it is in the U.S. Virgin Islands or a few miles away, the originally booked hotel gets a referral fee from Stayful.
Potential Advantages and Disadvantages
Stayful’s new relationship with boutique and independent hotels, which coincides with an app update to provide mobile check-in, check-out and concierge services for Stayful users, could jumpstart its onboarding of properties at a pace it hasn’t seen before.
In some ways, Stayful’s new tack resembles what Hostelworld did in the late 1990s when the latter provided a free property management system to hostels in exchange for their participation in Hostelworld.
Independent and boutique properties which encourage their guests to download the Stayful app — regardless whether the booking came through Stayful or directly via the hotel’s own channels — basically get free mobile check-in, check-out and certain concierge services from Stayful and can also earn commissions on their guests’ future bookings at other properties when they book through Stayful.
This solves a pain point for hotels: If the independent property is standalone or perhaps has only a few sister properties then they don’t have to develop their own apps or other mobile services. Having these services can boost their reputations with guests and are quickly becoming must-have features. The hotels also earn incremental revenue on future bookings on unaffiliated properties when their guests book through Stayful.
On the other hand, properties participating in this new Stayful business model are giving up a certain amount of control. When guests at the property use the Stayful app it takes on the look and feel of the hotel but they get no branding.
In addition, participating hotels risk losing direct customers who perhaps booked the property at a full-published rate on the hotel website or over the phone but in the future may decide to book through the Stayful app at discounted rates.
Other consumer apps, such as Checkmate, provide mobile check-in services to hotels that have the hotels’ branding but the properties must pay for these services.
For boutique and independent hotels, these are tradeoffs they will have to consider.
Rosner says the on-boarding process is going well after beginning a beta of the new model three months ago.
“Although it’s early, in our alpha that started in March, we’ve grown from tens of downloads to hundreds to now thousands of downloads a month — all without any marketing spend,” Rosner says. “This is a direct result of having more and more hotels sending invites to users.”
Among the hotels adopting the model are the Empire, Gramercy and Bentley hotels in New York City, for example.
Whether the new model ends up being a game-changer for Stayful will be apparent in the next six months or a year when we see whether the company has to do a lot of new hiring to keep up with an upsurge of participation from new hotel partners.