Hotel Distribution Strategy: Flash Sales—Deal or No Deal?

There’s an ongoing debate among those in the hotel industry about the wisdom of using flash sales as part of a hotel distribution strategy. Let’s take a look at the good and the bad and how to guarantee these quickie deals make your bottom line shine.

 

What Exactly Is a “Flash Sale”?

A flash sale is exactly what it sounds like—a special deal on a product or service that’s here and gone in a flash, typically 24 to 36 hours. Flash sales are usually offered through deal-of-the-day type sites that require customers to register before viewing these specials. If you’ve ever bought and downloaded a Groupon deal, you’ve participated in a flash sale.

 

The Downside

To make the deal attractive, though, you have to slash prices. Really deep. Probably well below your normal rock-bottom discount rate. In addition, you’ll have to pay the hosting site a commission of up to 50% of that already subterranean offering price. Over the long term, this could devalue your hotel in the eyes of potential customers, and you might lose your target audience as well as profits.

 

The Upside

However, if your hotel needs a boost in visibility, a flash deal can accomplish this very successfully. You can gain a lot of new customers in a short time, customers who might not have considered staying at your hotel until the deal appeared on a site like Groupon. Once you get those customers into your hotel, convince them that your hotel is worth the extra cost of a non-flash-deal stay.

 

You’re also likely to experience a significant increase in web site visits as those considering the deal drop by your site to check out your facility. If you’re looking for a quick, relatively low-cost way to market your hotel, a flash deal could be one of many tools to get your hotel’s name out there.

 

Flash Sale Tips

When it comes to flash sales, also keep in mind the following:

  • More flash sale sites are out there besides Groupon. Look into travel-oriented sites like Jetsetter and Vacationist too.
  • Only offer a limited number of rooms at the flash-sale price. The good news is, customers who buy these deals aren’t going to book their stays for the same dates, which will spread the cost over a longer period of time. An exception would be if the deal is for a stay booked within a limited time span.
  • Stick to your yield management pricing principles. While you’ll be offering the rooms at a narrower profit margin than normal, be careful not to take a loss.
  • Make sure your web site is search engine optimized, and consider increasing your pay-per-click keyword budget for the hours of the flash sale. In addition, fine-tune your web site so it’s running flawlessly for the extra visitors.
  • Timing is everything. Is your hotel brand new? A flash deal is an effective way to get the word out. Once you’re past the first big publicity push, another well-timed hotel flash deal will keep people from forgetting you’re there.

 

Need More Help?

If you’re thinking of running a flash sale as part of your hotel distribution strategy, let Smart eHotels™ help you make the most of it. Contact us today!

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