Hospitality Venues Can Attract Millennials Through App-Based Perks

Bars sometimes have empty stools and are faced with a challenge: How can they get more people through the doors to order a few rounds? Apps such as Hooch seek to bring more people into bars by offering potential customers a perk — that highly sought-after free drink.

The reason isn’t so much about the money. Though a free drink is essentially a discount, that’s not always the inherent reason why consumers like a free round: The free drink is more aspirational. Hooch CEO & Co-Founder Lin Dai told PYMNTS.com in an interview, “You want to get taken care of by the bartender.”

The idea for Hooch, Dai added, follows in the footsteps of the drink ticket. Popular in New York City, free drink tickets are sometimes handed to people who may know the owner or manager of a high-end bar.

Hooch seeks to emulate this experience through a modern-day drink ticket that’s accessed through a mobile device. Through the app, members of Hooch’s subscription service can have one drink a day at around 500 select bar locations from New York to Hong Kong. But, even though the app provides a free drink to members, Dai envisions the app as less of a way to save money for consumers and more as a way for them to discover new places.

“It’s really not about saving money on that one drink [for consumers],” Dai said. “It’s really about just getting introduced to a lot of great bars that you may have heard of … but you may not have had a chance to go to.”

Beyond consumers, the benefits for bars are apparent: Cocktails have high margins and bars can afford to give away that free vodka soda or gin and tonic. And that promotion can, in fact, lead to more revenue for the bars: Consumers often order more than one drink once they visit a bar, Dai said.

If you’re thinking that customers might try to game the system and redeem more than one drink in a day, Hooch has it covered: The app has a three-pronged approach that includes showing a drink name, drink image and video on a cell phone screen that consumers can only access once a day in the app.

A More Exclusive Service

When Hooch was testing its initial pricing, the company conducted a survey. Though the regular Hooch drink service is now available for a fixed monthly fee, members were willing to pay significantly more per month for the service with an expanded platform that went beyond bars. As a result, Hooch rolled out a more exclusive service, dubbed Hooch Black, which offers members premium discounted experiences on dining and luxury hotels — and access to exclusive events — for a little under the price point customers had indicated on the survey.

To offer its members highly discounted hotel rooms, Hooch Black contains a private travel booking engine that allows members to access to unpublished rates at more than 100 hotels. In addition, the platform allows for restaurant reservations for hard-to-get tables. And when Hooch members book a restaurant reservation, the dining experience comes with an additional perk: The members’ table gets a free round of champagne on the house.

Beyond the consumer benefits, the Hooch app benefits hospitality venues such as bars, restaurants and hotels that sometimes have excess inventory and want that slack filled by qualified customers. That’s where Hooch members can come in.

“We know our members are highly mobile and care about experiences,” Dai said. And the service’s current members are young professionals between the ages of 21 to 25 who have a household income of more than $150,000 — a highly desirable demographic already, Dai added.

As a result, hospitality venues can do more than just fill that empty room or that extra bar stool. They can fill those places with people who are passionate about experiences and likely to bring in additional revenue. These customers can also start building loyalty to hospitality brands.

Dai is currently keeping the experience small — and looking for aspiring millennials who may just be starting their careers. Potential members have to apply for membership, and the number of members is capped to around 300. However, current Hooch Black members can help refer potential members to the platform.

Even though Dai wants to keep membership limited, he is considering opening Hooch Black to a few more members going forward.

“We’re keeping the membership very exclusive in the beginning,” Dai said. “There’s 295 founding members, and we’ll be expanding that a little more later this year. But the goal is really to curate like-minded individuals.”