April 9, 2013 at 8:34 AM ET
Looking to give your mileage plan balance a boost? Coming out of private beta this week, Rocketmiles.com promises to accelerate your airline mileage accrual like Gumout in your gas tank.
The site, which is geared primarily toward business travelers, offers users thousands of points or miles in five airline loyalty programs for stays at selected hotels in 15 U.S. cities.
“It’s not always that glamorous being on the road three or four days a week,” said CEO and cofounder Jay Hoffmann. “A lot of people think about points or miles as a way to compensate for being away from family and friends. We’re trying to accelerate that.”
To use the site, users enter their destination and the mileage plan in which they want to get credit. Current plan choices are limited to the programs of American, Delta, Hawaiian, United and US Airways.
Consider, for example, a recent search for a late-April, one-night stay in Los Angeles with United MileagePlus accrual. Among the results was the Beverly Hilton for a prepaid, but refundable rate of $295, which would earn 3,000 miles in the United program.
That was cheaper than the $325 refundable rate on the hotel website and the $306 refundable rate on Expedia, although more expensive than the latter’s $266 non-refundable rate.
The site is predicated on several premises that tweak the traditional online travel agency (OTA) model. Generally speaking, OTAs provide hotels with massive exposure, charge commissions as high as 25–30 percent for the privilege and use the revenue, in part, to support the ad campaigns, computer systems and customer-service departments required to handle millions of transactions.
Rocketmiles fine-tunes that model by running lean — the company has just 14 employees — and offering just a handful of hotels in each city. The former keeps costs down while the latter allows hotels to avoid advertising to the world at large that they’re offering a discount.
With the savings, Hoffmann and company can then purchase miles from the airlines and use them as enticements to get those premium travelers to book on the site.
“If they’re making $100 on a commission, then the consumer can get $40 in the form of miles,” said Brian Kelly, a loyalty-program expert who runs ThePointsGuy.com. “If you’re going to pay the same price anyway, why not get a portion back?”
During beta testing, says Hoffmann, users earned an average of 7,000 points per stay, adding that the average business traveler could earn an extra 80,000 points per year.
"That's the difference between celebrating Mardi Gras in New Orleans or celebrating Mardis Gras in Rio,” he told NBC News.
For Hoffmann, the site is a natural outgrowth of a career that entailed stints as a business traveler on the road three to four days a week, managing director of United’s MileagePlus program and vice president/general manager at Groupon. The combination gives him a unique perspective on the evolving state of e-commerce.
“We’re presenting a smaller ‘shelf’ (of products) and a simpler shopping experience like Groupon, Jetsetter or HotelTonight,” he said. “We’re not trying to be another Kayak or Hipmunk and give you 692 search results.”
In fact, the site is part of a burgeoning trend in which start-ups are trying to chip away at the OTAs’ dominance by offering value-added benefits like airline miles or points.
Last October, PointsHound.com launched with a similar service; it works with more hotels (100,000+) and more airline programs (eight) than Rocketmiles but most rewards are in the hundreds rather than thousands of miles.
Either way, Kelly, for one, sees promise in such mileage accelerators: “Travel is expensive and people realize there’s value in miles,” he told NBC News. “Leveraging those miles is like the extreme couponing of the travel world.”
Rob Lovitt is a longtime travel writer who still believes the journey is as important as the destination. Follow him on Twitter.