Groupon
THE CASE FOR
Groupon ’ s GM of Travel Simon Goodall explains how his daily deals deliver to a hotel ’ s bottom line .
By Jeff Weinstein , editor in chief
In January , Smith Travel Research Senior Vice President Jan Freitag told attendees at the Americas Lodging Investment Summit that the pace of discounting — after 2009 — has been almost twice as fast as the recovery in ADR . He then urged hoteliers to keep rates intact and , instead , offer add-ons to induce trial . Offer free Wi-Fi , upgrades , a meal , whatever , he said — as long as the rate remains as strong as possible .
His comments were also based on the notion that training customers to expect rooms for 50 % if they wait for flash sales erodes the value equation and makes it harder to drive rate . Freitag believes flash sales really just shift demand to a lower price point and offer little value .
Referencing the leading flash sale vendor , Groupon , which launched its Groupon Getaway With Expedia last July and reportedly generated US $ 10 million in revenue via its travel division by August , Frietag added , “ I would argue that Groupon guests are not loyal to the hotel ; they are loyal to Groupon .”
In response , Groupon Vice President and General Manager of Travel Simon Goodall is simple and to the point : “ Until a hotel is 100 % full ( he estimates 2.2 million U . S . hotel rooms alone are empty each night ) at an infinite price point , there is always room to grow . We help drive incremental demand .”
8 HOTELS March 2012 www . hotelsmag . com