Emerging Marketing Channels in Hospitality: A Global Study of Internet-Enabled Flash Sales and Private Sales

The potential uses of flash deals or daily deals have caught the attention of many restaurant and hotel firms, as well as third-party distributors, such as Expedia. A survey of nearly 200 international hospitality practitioners found that a remarkable 42 percent had tested a flash deal promotion, and some of those firms had offered numerous flash deals. At the same time, 46 percent of the responding hospitality firms had no intention of offering a flash deal, with some citing concerns about the potential damage of group discounts to brand integrity. Individual hotels that had offered flash deals tended to be on the large side, averaging more than 150 rooms. Discounts offered in the deals ranged widely, from 15 to over 75 percent off rack rates. Likewise, commissions paid to deal vendors saw a wide range, as the most typical commission was 15 to 20 percent, but some hotels paid as much as a 40-percent commission. Most of the deals reported in this survey had been offered through Groupon or LivingSocial, but Jetsetter unexpectedly appeared as the number-three flash-deal channel for these respondents. Deal structures also varied widely, although many deals were offered for mid-week. Although most offers involve a non-refundable purchase, deal vendors are increasingly offering their customers opportunities to obtain refunds in certain circumstances. Respondents’ general assessment of the deals’ success was moderate. They agreed that their deals brought in new customers, but repeat business was more tenuous. One favorable outcome was that the respondents saw little evidence of cannibalization of existing business, particularly when they packaged their deal carefully. On balance, hoteliers who were most pleased with the outcome of their deals were also the ones who managed the cost of the deal most assertively

Hotel Daily Deals: Insights from Asian Consumers

Given that Asia accounts for more than half of the world’s population and its hotels are thriving, this study analyzes the attitudes toward daily deal offers of hotel guests in five Asian nations. While the respondents, from China, India, Indonesia, Korea, and Japan, have many common attitudes regarding daily deals, certain differences stand out. Overall, it becomes clear that frequent guests take advantage of the discounts offered in daily deals, thus confirming concerns of cannibalization. Worse, those frequent guests reported that they felt as though they were treated differently due to their use of the daily deal, and this gave them a diminished view of the hotel. On the other hand, respondents from most nations said that they took the opportunity of the deal to spend more money than usual during their hotel stay, and they were happy to recommend the hotel to their friends, a phenomenon known as being a market maven. Moreover, use of the daily deal did not seem to interfere with guests’ loyalty levels, which seemed to be the same for daily deal purchasers and those who did not use such offers. One other downside to offering daily deals is that the survey indicates a reduced value perception for those who purchase numerous deals, indicating that the deal’s charm eventually fades. While the findings seem contradictory in some ways, they also provide guidelines for hoteliers who wish to target Asian consumers with these types of deals while also avoiding the pitfalls

Fresh Thinking about the Box

Brands have become the central organizing principle for most hospitality organizations, guiding every decision and every action. They make up a large part of the market value of many successful companies. While making money remains the end, managing brands successfully has become means number one. Many hotels and restaurants globally are affiliated with multi-unit brands, and hospitality branding is a global phenomenon for at least three reasons: the customer’s desire for a predictable product and service experience, economies of scale in advertising and distribution, and market power in negotiation with suppliers, high-value buyers, and developers

To Groupon or Not To Groupon: A Tour Operator’s Dilemma

The case of a tour operator in New York’s Finger Lakes region highlights the remarkable potential benefits of participating in a social coupon promotion, as well as the possible pitfalls that require a carefully crafted arrangement. The benefits include participation in an attention-grabbing website (in this case, Groupon) and having many new customers exposed to the business. Possible disadvantages include cannibalizing existing customers, attracting deal seekers who will not become repeat customers, and failing to make up for the revenue forgone when discount purchasers occupy spaces that could have held full-price customers. For the tour operator, Experience!The Finger Lakes (E!FL), an additional challenge was to create a discount package that did not lose money. To alleviate potential issues, the tour operator used a creative approach that involved working with Groupon and participating wineries to add value to the core tour product. By creating a special package, E!FL was able to cover costs, add value for all parties, and offer a different product that was not directly comparable to its core menu of tours

Challenges in Contemporary Hospitality Branding

In an age of global brand proliferation that has seen continual extension and expansion of brand portfolios, brand managers are challenged by the sheer scale of their overall operations and the eclipse of traditional marketing modes by online channels and social media. Given this framework, the 2013 Cornell Brand Roundtable focused on such major areas of brand management as achieving and maintaining a brand’s edge in the marketplace, managing brand architecture and the brand portfolio, and protecting the brand’s reputation against infringement of its intellectual property. The roundtable also included an interactive exercise in integrating brand attributes from outside the hotel industry to solve customer experience challenges and featured a case of brand rejuvenation that illustrated many of the principles covered over the course of the day’s many lively discussions

Strategies for Successfully Managing Brand–Hotel Relationships

Contrary to the conventional wisdom, the study described in this report calls into question the principle that the best way for a brand to ensure that an affiliated hotel conforms to standards is to own that property. Instead, a comparison of opportunistic behavior at 49 brand-owned hotels with that of 247 hotels owned by a third party found that the brand-owned hotels report higher levels of opportunism on the part of hotel managers directed at brand headquarters. The study also revealed conditions that tend to limit opportunism, which is defined as using guile to pursue self-interest. Opportunism is limited when it is easy to monitor hotel performance, and when the brand is able to use opportunism as a form of retaliation. On the other hand, contrary to expectations, the study found no effects of ownership when combined with either emphasis on relational norms or transaction-specific assets to limit hotel opportunism. Ironically, the data indicate that having a third-party owner involved in the arrangement tends to stifle opportunism in the individual property

Branding Hospitality: Challenges, Opportunities and Best Practices

The core elements of brand management are to create a concept that fulfills customer needs and then to remain true to that concept in all aspects of the business. The ability to articulate a brand’s meaning and consistently operate according to that meaning has never been more critical, given the wide open window into the brand’s heart and soul created by the internet and social media. Participants in the second Cornell Brand Management Roundtable met in spring 2012 at the Cornell School of Hotel Administration to examine the elements of a powerful brand, the critical steps for brand innovation, and the growing impact of social media on brand management. Although social media may affect the way customers view a brand as they consider a purchase, the importance of the brand promise remains undiminished, and may well be stronger than ever

Service Innovation and Customer Choices in the Hospitality Industry

Purpose: The purpose of this paper is to understand the impact service innovation has on customers’ choices within the hotel and leisure industry. The paper also discusses the influence of the creation of new services on both service development and operational strategy.Design/methodology/approach: The analysis is based on a national survey of approximately 1,000 travelers in the United States, using a web-based data acquisition approach. The travelers are segmented by reason of travel (business or leisure), and discrete choice analysis is applied to model customer preferences for various hotel service innovations.Findings: Overall, the study finds that service innovation does matter when guests are selecting a hotel, with type of lodging having the largest impact on a customer’s hotel choice. In addition, service innovation is found to have a larger influence on choices when guests are staying at economy hotels rather than mid-range to up-scale hotels. Also, leisure travelers were found to be more influenced by innovative amenities such as childcare programs and in-room kitchenettes than business travelers.Practical implications: The understanding of customers’ choices allows managers to better design their service offerings and formulate corresponding operational strategies around customer needs.Originality/value: This paper examines the addition of innovation to the hotel service concept and is an excellent tool for managers deciding on which innovations to implement

To Groupon or Not To Groupon: A Tour Operator’s Dilemma

The case of a tour operator in New York’s Finger Lakes region highlights the remarkable potential benefits of participating in a social coupon promotion, as well as the possible pitfalls that require a carefully crafted arrangement. The benefits include participation in an attention-grabbing website (in this case, Groupon) and having many new customers exposed to the business. Possible disadvantages include cannibalizing existing customers, attracting deal seekers who will not become repeat customers, and failing to make up for the revenue forgone when discount purchasers occupy spaces that could have held full-price customers. For the tour operator, Experience!The Finger Lakes (E!FL), an additional challenge was to create a discount package that did not lose money. To alleviate potential issues, the tour operator used a creative approach that involved working with Groupon and participating wineries to add value to the core tour product. By creating a special package, E!FL was able to cover costs, add value for all parties, and offer a different product that was not directly comparable to its core menu of tours.Dev_202011_20To_20Groupon.pdf: 612 downloads, before Aug. 1, 2020