Journal of Tourism & Hospitality
Open Access

Abstract

Motivations, Limitations and Revenue Management Implications of Daily Deal Offerings

Winnie O’Grady, Paul Rouse and Nancy Cao

Offering daily deals has become a popular marketing approach in recent years. This research investigates whether daily deals add value to suppliers businesses. We investigate motivations for daily deals, revenue management implications and limitations of such, and differences between conventional marketing approaches and daily deal offerings. The research method included questionnaires, interviews, and direct collection of deal data via the internet. We find that daily deals can add value by informing better revenue management practices. Daily deals can be utilized to improve pricing, manage capacity and develop loyalty. We also find that the demand curve for daily deals is elastic, which reflects the bargain seeking behaviour of buyers. Furthermore, the demand for certain deals is found to be less elastic than others, suggesting that suppliers can potentially offer deals at higher prices to yield more revenue.