This time last year all the travel industry buzz – some good but so much of it negative – was about the daily deal websites, which had exploded into the public consciousness over the previous 12 months. They had moved through other industries – massage, teeth whitening, restaurants – like locusts through a wheat field. Now it was travel’s turn.
Travel was particularly attractive for the deal sites. Relatively high prices meant relatively fat profits.
Many of the bigger operations – Groupon, LivingSocial, Cudo, OurDeal and Ensogo in Asia – set up travel divisions while several specialist sites like TravelCandy and Biggest Travel Deals joined the fray.
The sector was white hot. Dedicated sessions at No Vacancy Thailand and TRAVELtech Sydney were eagerly anticipated and well attended.
There was a lot of talk, intense debate about the business model which demanded travel suppliers offer dramatically discounted product while paying deal sites commissions of 50%.
However few of the big operators got on board, partly because they were restricted by global pricing agreements with the large Online Travel Agents, but also for other more base reasons.
The simple fact is many in the industry didn’t (and don’t) actually like the daily deal sites, the ‘wham bam thank you ma’am’ way they do business.
The relentless cold calling by callow sales people who have no idea of how travel – or any other industry for that matter – actually functions; the ‘me me me’ culture of the sites, the lack of give and all take.
Yes, people were talking.
Last year.
Now that conversation has run out of puff.
A couple of the specialist operators have closed (TravelCandy and Biggest Travel Deals), Getaway Lounge has merged with Cudo, while there have been several prominent departures from the travel divisions of the large operators.
You don’t hear much about them these days, and it’s hard to avoid the conclusion that daily deal sites are, like, so 2011.
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I’d be curious to know how many small accommodation operators tried selling through a daily deals site and what their experiences were? Anyone out there care to share their experience?
Hi Christopher,
We had a look at a couple of these after being cold called. We responded to the groups that their required discount off our already discounted winter rates was to much and their commission was too high. Some made a second offer, but never any that made business sense to us.
For us to receive as little as 25% of rack rate is completely uneconomic. Why would these people even bother putting such a meagre proposition to us ???
Happy to share! I look after marketing for a number of small-ish serviced apartment properties – we are approached all the time by sales people from group buying sites and have never gone down this path. I have discussed with a number of other Melbourne based operators within my brand who have trialed it and said ‘never again’ We all know the reasons why.
As much as their sales people try to sell it, they really dont understand our industry and are simply out to push a race to the bottom (of room rates) – exactly the opposite of what our industry needs.