Groupon is going mobile.
The discount website is looking to goose its travel bookings by further tailoring its offerings to last-minute mobile-device bookers, after shedding its co-branding relationship with Expedia earlier this year.
Though Expedia continues to be a supplier for Groupon’s Market Picks inventory of properties, Groupon is going it alone and earlier this month debuted its Getaway Tonight mobile app that gives smartphone users a chance to shop for last-minute discounts while offering hoteliers another avenue to unload unused inventory.
“We’re moving closer to becoming a full-service inventory management solution for our partners,” said Groupon spokesman Nicholas Halliwell.
Groupon and other daily coupon sites such as LivingSocial represent a distribution channel that debuted in the wake of the recession as hoteliers and other business owners looked to spur business while cash-strapped consumers hunted harder for bargains.
Groupon went live in 2009, while LivingSocial, which was founded in 2007, launched its Escapes travel-sales site in late 2010.
As travel spending has rebounded, though, analysts and some hoteliers have said the flash-deals sales channel has lost some of its value.
Additionally, shoppers of such sites are often more loyal to the site than to the supplier, making it challenging for the hotelier to get a flash-deal customer to return.
“Flash sales sites are a recessionary phenomenon and as such they always suffer from an improving economy and rising travel demand,” said Max Starkov, CEO of hotel Internet marketing firm HeBS Digital.
Still, both Groupon and LivingSocial say their sites continue to take a larger chunk of the travel-distribution market. Groupon Getaways’ first-quarter gross billings rose 20%, to $221 million, after the site booked almost $700 million in travel last year, according to Halliwell.
As for LivingSocial’s Escapes, that site has boosted its hotel inventory fivefold since its late 2010 debut, to about 1,000 hotels, said Nicholas Stafford, general manager of Escapes.
In addition to the broader choices, Stafford said Escapes has boosted purchases by using customer-purchasing patterns to personalize its offers.
“This translates to greater inventory as we move away from one experience for all to a promotional lineup of multiple properties across price points and experience types,” Stafford said.
As for supplier partners, hoteliers aren’t likely to give up on the sales channel anytime soon because of the continued incremental business gains.
It’s uncommon for a guest typically loyal to a particular hotel or brand to change their booking habits by shopping via a flash-deal site, according to Chris Anderson, associate professor at the Cornell University School of Hotel Administration.
“Conversion [among Groupon and LivingSocial shoppers] to non-deal seekers tends to be very low, making these channels seem costly,” said Anderson. “But to the degree that this business is well fenced-in, it becomes incremental.”