Five star hotel, one star price. Free nights. Great, can't be a real hotel deal. Due to the economic downturn, hoteliers are eager to reduce unused inventory, so Flash retail sites have risen rapidly around the world. Consumers are already making money on these fast-selling sites that sell hotel inventory at very low discounts. Websites such as Living Social, Haute Look, Snique Away, Travelzoo and JetSetter. Indeed, consumers find they are saving a lot of money. But is this model sustainable for the hotel industry? Or will all these growing flash sites end up eroding ADR and overall consumer confidence like past OTA sites?
Flash websites can be capitalized by showing up as proprietary [requires email membership], acting as an auction website, or offering Flash-bang promotional deals that are only available for a very limited time. To further complicate the process, sites such as Groupon and LivingSocial are working with consumers to further reduce hotel prices.
The model is currently running. Statistics show that consumers are joining these Flash sites in large numbers. Currently, hoteliers are reducing their inventory. With discounts of 40-60% for four- and five-star resorts, luxury hotels are finally available for the average traveler. Many consumers find that they can now not only stay in better hotels than in the past, but also stay longer in these hotels. Many benefits include free stays, extended stays for consumers, and free upgrades to other hotel facilities. Therefore, one way to look at the phenomenon of fast-selling sites is to save money for travel agencies while unloading hotel rooms for the industry. Win-win?
As these hotels jump into fast-selling trains, questions arise. Are they supporting and building a model that will start to complain within a few years? Do these hotels lack the creativity and willingness to invest in the direct selling business alone?
The flash sales website is useful for the retail market, as the launch of a new model or the launch of the next season series requires unsold inventory to be off the shelf. For these types of products, discounting is a way to eliminate inventory that could not otherwise be sold. This is not the case in the hotel industry. As we have seen with OTAs, severe discounts have led to a decline in value and a lack of consumer loyalty and confidence. Often restaurant operators allocate inventory so frequently and discount them at such low prices that it is almost impossible to convert house prices to some level when the time comes. All these short-term gains will offset long-term growth and sustainability. Even if economic growth brings increased demand, flash sales sites will still set too low a threshold for ADRs and create an unsustainable bottom line.
It's time to wake up hoteliers, learn what they see from their fast-selling website, and use them on their own websites. By promoting the same urgency, exclusivity and loyalty to fast-selling sites, the principle is shifted from offset URLs to their own destinations and booking offices. Once all the advantages of a Flash website [from a marketing and consumer perspective] are applied to the hotel's own website, a true win-win situation will form. Hotel operators will be able to meet consumer expectations while meeting consumer expectations. Craving for the best hotel deals. Until then, however, flash sales sites seem to be short-term solutions to ancient problems. Where can I find the best prices?