The jury is still out on Hotel Flash Sales Sites…

In my post dtd 01 Feb 2012 – A Revenue Manager’s ‘yes’ and ‘no’ for 2012, I had mentioned that OTAs may be used for need periods: weekends, group cancellations, low season, etc., and not as a replacement for or alternative to the direct online channel. Also mentioned was the danger of flash sales sites which cause your hotel to rebuke the principles of rate parity leading to “The Law of Unintended Channel Share Loss”

Despite the immense popularity and relative newness of flash sale websites such as Groupon, BloomSpot, JetSetter and Living Social, hoteliers are still wary of the effectiveness and real value of these sites for a hotel’s marketing plan, according to a recent survey from TravelClick.

Forty percent of the approximately 900 global hoteliers surveyed have used a flash sale website. Of the 40% who have tried these sites, 38% have found it less successful than they had hoped and do not plan to use again. Hoteliers believed that the sales gave up too much revenue to the site operator (25%), did not attract the right caliber of customer reflective of the brand (21.7%) and did not see enough return business from the promotion (21.7%).

Nearly 40% of those surveyed have not tried a flash sale promotion and have no interest in executing one in 2012, while 23% say that they will try a flash sale site for the first time this year. When asked which flash sale website hotels chose to use, 53.3% of hoteliers polled had partnered with Groupon.