Hotel owners might want to get away from Getaways

July 29th, 2011 by TRT Blog

For travellers on a budget, the new “Groupon Getaways with Expedia” is great news. Through the Groupon/Expedia partnership, announced July 12th, subscribers can book luxury hotels rooms at up to a 50 percent discount, and airfare and travel packages will soon be available as well.

Getaways is just the newest site to join the ranks of LivingSocial, SniqueAway and others. Groupon and Expedia have called the partnership a “win-win” for both consumers and the travel industry. But we wonder what the popularity of these sites will truly mean for hotels.

Madigan Pratt at Hospitality Trends says that, for travellers, the partnership is “the best thing to happen since the inflatable neck pillow. It may also be a good deal for Expedia/Groupon. It’s hard to imagine a scenario where it would ever be a good idea for your hotel.” He warns that Getaways will turn hotel rooms into commodities, and that hotels will risk their brand reputations and long-term value in favor of a short-term up-tick in sales. We find it hard to disagree.

With a combined 50 million Groupon and Expedia subscribers, Getaways certainly provides ample opportunity to drive more visitors to hotels. But simply selling rooms to new guests at a 75 percent discount might not be the best policy—and it certainly isn’t the best way to build customer loyalty. How will loyal guests feel when Getaways subscribers snag rooms at cheaper rates?

Many industry blogs are up in arms over Getaways’ marketing efforts, and call into question the benefits to hotel s that Groupon/Expedia claims. Pratt suggests that hotel owners ask themselves a few questions before buying into Getaways, including: “How does participation in Expedia/Groupon affect your brand image? … Will it erode my brand?”

Offering Getaways deals may well be a viable short-term solution to bring in new guests. But, for hotels looking to build their brand, retain customer loyalty and thrive in the long run, we’d suggest they think twice.

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