Wednesday, June 27, 2012

Flash Sales – the future of hotel booking


Flash Sales offer great deals for a very limited time, they can often have much tougher terms and conditions to many other offers that can make it difficult for travelers to cash-in their voucher. Yet some hotels are seeing this as a great way to promote their hotel and show travelers what they can offer.

One hotel I spoke to offered 75% off their standard rate, and this is in London – what a potentially excellent deal. But as a traveler it is really worth price shopping and seeing what rates are on the market, across traditional booking channels, to make sure it is a great deal.

Yet tapping into travelers with a budget mindset is ideal as the speed of purchase encourages them to buy faster.

A few places you can find these interesting deals include Secret Escapes, GroupOn, Living Social, Voyageprive.com and Travel Zoo. I recently attended an event organized by HOSPA – an association for hoteliers to find out more.

As a hotelier – you do need to think of what brand represents your hotel. You need to agree with the supplier a sustainable pricing model on the discount and commission the website charges. Don’t get surprised if the results don’t come in as you expect, nothing worse than planning booking based on a pure marketing promotion.

The HOSPA panel agreed that on the whole, those who bought these Flash Sales were often consumers who can afford to spend several hundred in a daily deal, making a decision in a moment.

 
Advising hotels on how to make the most of Flash Sales, Nick Stafford, General Manager of Escapes Europe of Living Social remarked: “The worst thing you can do is discount heavily to your own customers. I booked a flight and 2 days later received a discount promotion of 60% from that airline. Discounting to loyal customers is dangerous and can reduce the value of your product as they just hang around waiting for the sale,” Nick felt short changed by the airline. “Our offers are for a specific time, feeding recipients needs then and there.”

However hotels maybe trying these new forms of social and digital marketing, yet are still very behind on the online basics, TravelZoo still needs to create web landing pages for hotels that (believe it or not) still do not have websites. Then these hotels complain when they don’t get the results they need. To me, hotels need to get a grip with the basics before trying this method of sales.

The only advice these channels seem to offer to hotels is to think in advance, do not call up last minute desperate to fill the hotel. This is not last minute bookings, these are future bookings aimed at helping the quiet periods, and revenue managers should know the weeks when the hotel is usually quiet.

There are no exact figures on how much these flash sales cost, it will be anywhere between 10% - 50% commission depending on the offer, the location of the property and the brand.

I am hoping that independent hotels are offered good deals, but I get the impression it maybe more financially challenging for small independent properties.

Some immediate tips for hotels:
  • Select the right channel that markets hotels like your property
  • Identify the lowest rate you publish and can make money from
  • Build from this lowest rate, taking into account maximum commission you are willing to pay before you make a loss
  • Look at your additional services – value-adds – and see how you can create a great package offer that costs you very little
  • Get a good idea of how the flash sales members behave to identify the best price

Ryan C Haynes is VP - Marketing Communications at eRevMax and is responsible for driving all PR and Marketing activities for RateTiger and eRevMax brands globally. Ryan is based out of London and can be reached at ryanh@ratetiger.com
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