Journal of Tourism & Hospitality
Open Access

Abstract

Advantages and Disadvantages of Using Flash Sales in the Lodging Industry

Berezina K and Semrad K

Flash sales websites (e.g., Groupon, LivingSocial) are shopping intermediaries that provide a promotional means to market and distribute goods and services at deeply discounted prices. The purpose of this study is to provide a preliminary assessment of the advantages and disadvantages of hotel room inventory distribution by way of flash sales websites. Forty-six industry professionals were interviewed regarding their experience with flash sales promotions. The results of the study revealed that plausible advantages of using flash sales included filling immediate occupancy needs, increasing exposure, reaching new customer market segments, and inducing first time customer trials. Potential disadvantages of using flash sales for hotel room inventory distribution may fall in the categories of facing high distribution costs, violating rate parity, and experiencing negative impacts on hotel brand and revenue generation. Overall, hotel managers reported that hotel flash sales may serve as an effective distribution and marketing channel when clearly aligned with hotel’s goals and needs.