About two in five hotels that have tried to sell rooms through flash-sales sites such as Groupon and LivingSocial don’t return to that sales channel once their initial agreement expires, hotel tech-services company TravelClick found in a survey.
Of the flash-sale users, 38% said they didn’t plan on using the channel again because of too little revenue from the sites, not enough return business or “not the right caliber of customer,” TravelClick said, citing its poll of about 900 hotels.
About two-thirds had used a flash-sale site, and most of those companies had worked with Groupon.
Groupon, LivingSocial and other flash sites generally cut deals at a far larger discount than online travel agencies. That allows them to let subscribers bid on rooms that are often 40% to 50% off and include additional amenities such as meals, free parking and local entertainment.
U.S. revenue generated from daily deals and flash sales was estimated to have more than doubled last year to $1.97 billion, and will more than double again to $4.17 billion in 2015, media industry consultant BIA/Kelsey said in a September 2011 report.
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