Who in travel hasn’t said, “I’ve got to write a book.” This is usually followed by, “It’ll be hilarious, but nobody will believe any of it is true.”

I just finished reading the funniest article in Travel Weekly, of all places. “Group Deals Soar Amid Online Debate” is a report on a recent Traveltech conference session about travel deal and group buying sites. And I just had to share it with all the hoteliers who regularly read Hospitality Marketing Blog.

According to this article:

  • Sam Yip, senior research manager a Telsyte told the audience that the popularity of the deals was, “due to the interactive format of the deal rather that the value.”

What a comic!  If group buying sites let hotels offer 10% discounts instead of 30 – 50% would people still flock to these sites because they are interactive or “because they like the channel?” Stop it, you’re hurting me.

  • According to the article, “Dean McEvoy, founder of group buying website Spreets, told a panel discussion that consumers are driven not by rates but a “great experience.”

I’m bending over in laughter. So hoteliers could double their rates and just make sure they offer “a great experience.” Be sure to make the buying process a great experience too.

  • Mr. McEvoy goes on to say that additional components such as meals and outings are “key” to the deal’s success.

Stop the presses! The same things that make a hotel’s own promotions work also work when you’re giving away rooms at 50% off. Knock me over with a feather! I never would have guessed.

  • One of the panelists put forth the proposition that his partners (that means you, if you’re a hotelier), “have to convert the group-buying customers, turning them into loyal customers.”

Insanely funny! After a guest gets an outlandish discount the hotelier is tasked with turning them into a loyal repeat guest. The only loyalty that guest will have will be to the Deal Site. See the world…at a discount. Why would they ever pay full price, or even a reasonable price again?

While all of these arguments are insanely funny there is, unfortunately, a very sad ending to this story.  The truth is, hoteliers are complicit in helping train travelers to only buy when there is a deeply discounted deal.

Plenty of research points to the Perils of Marketing on Price .  Good reading next time you’re thinking about doing it.

Participating in Deal Sites and offering deep discounts is easy, but it doesn’t build your business. Read the research. Hotels that maintained rate or increased it were the ones that most likely increased RevPAR over the past two years.

  • They are the ones that provided the highest degree of perceived value.
  • They are the ones that did the hard work and followed best marketing practices.
  • They didn’t compete on price.
  • And they are the ones that reaped the rewards.

I’ve got to write a book!

What do you think?

AUTHOR: Madigan Pratt

Madigan Pratt is President of MP&A Digital & Advertising, an award-winning agency helping luxury hotels attract and retain profitable customers. Principals with over 60 years of collective experience at some of the world's largest advertising and direct marketing companies lead the agency's team of marketing, creative, public relations, Internet and social media professionals.

2 Comments
  • What did Pogo say in that famous cartoon?: I have seen the enemy and it is us!
    Yes, the collective travel industry so enamored with the idea that travel services can only be sold successfully at a cheap price. Especially those involved in online travel have spread that fallacy since day one! Of course, the consumer will respond and then wait for the lowest deal before buying.
    The very few who know how to sell based on value and aspiration are the ones nobody writes about, but they know who they are and don’t need it anyway.

    September 6, 2011
  • There’s an old retail saying about driving traffic versus driving sales: malls would have an event, which would drive traffic, but all the commotion interfered with their frequent shoppers, who started to think their loyalty to the property wasn’t being valued.

    Today, there are many who will tell you the best way to improve a 50% discount on your rooms is by offering a 60% discount. The reason? The daily deal business model was designed around search engine optimization, which became more “efficient” as search engine marketing became more prevalent. The conceit of their model is that hospitality does not adequately recognize the cost of a new lead. Unfortunately, most of the brainiacs trying to pitch you don’t understand revenue management, at least not yet.

    September 14, 2011

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