Patrons staying at many hotels earn points or frequent flyer miles for their business loyalty. But given the fact that more than 80% of frequency miles are never used, many times such rewards are rather dubious.

However a 123 location hotel chain - Jameson Inns, or Signature Inns in the Midwest and South—have come up with a better offer. When a patron stays more than three nights a year they’re rewarded with shares of stock worth 10% of their nightly room rate.

The publicly-traded Atlanta hotelier thinks the program, launched with SEC approval in 2004, can generate more traffic.

As a traveler accumulates stock in the hotel chain their propensity to continue to revisit is reinforced.

Other small-cap public companies might well consider such a strategy for three reasons: building additional revenues (greater earnings), growing their list of committed customers, and expanding their shareholder base.

The unique barter offer paid off. In May, 2006, Jameson Inns agreed to be acquired, and was bought out by Longhouse Hospitality for $371 million.

This same strategy was used by very successfully by Ross Perot when he launched Perot Systems, after he left the General Motors board of Directors. (He sat on GM board with his sale of EDS to GM.)

This entry was posted on Saturday, June 16th, 2007 at 11:56 am and is filed under Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.