Hoteliers not convinced by flash sale sites

by Phil Davies
by Phil Davies
March 29, 2012 04:40 PM GMT

European hoteliers have yet to be convinced of the value of group discount websites as a way of filling empty rooms, a survey claims.

Flash sale websites such as Groupon and Living Social divide opinion when it comes to driving business.

Only 27% of properties saw it as a sales tactic they would repeat, according to the research by hotel market intelligence firm TravelClick.

A further 33% of hoteliers claimed they would not use flash sale sites, while 17% said they had tried group discounting once but would never do it again.

The survey, conducted amongst almost 400 chain and independent properties in the UK and mainland Europe, revealed five main reasons why hotels were unhappy with the group sale experience:

- Did not make enough revenue per room
- Gave up too much revenue to the sale site
- Deal wasn’t as successful as expected
- Failed to see any repeat business
- Did not attract the right calibre of customer

Hotels reported a number of reasons that featured in their decision to consider flash sale sites, with increasing off-season occupancy (70%) and raising the property’s profile (60%) leading the way.

Reaching a new demographic (35%) and keeping up with competition (24%) were also mentioned.

Of the flash sale sites, Groupon was used the most (60%), ahead of Living Social (28%) and JetSetter (15%).

Travelclick president Jan Tissera said: “Group discount websites are a real success story and have grown incredibly quickly, but it seems word has spread in the accommodation sector that they don’t always deliver the results that hotels are anticipating.

“Anecdotal evidence has indicated that hotels are also concerned that a large percentage of the customers who book had actually stayed with them before and cannot be ‘up-sold’, which discourages incremental business.”

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