Travel Deals That Might Not Be
As vacation budgets have shrunk, discount luxury-travel web sites have flourished, attracting more than 500,000 members in the last year. But the tactics these sites employ – limited-time offers, limited-availability sales and simple marketing psychology – mean those bargains might not be as good as they look.
But because most of these deals require travelers to act fast and pay in advance, and can rarely be cancelled or changed, they are rife with pitfalls – including the prospect of a better offer from a different site the next day, or a lower price directly from the hotel itself. Earlier this month, Jetsetter, one of the biggest sites, offered members rooms at Atlantis Paradise Island resort in the Bahamas for little as $250 per night, 22% off the regular price. At the same time, the resort was offering travelers an even better deal – one that would have saved $550 over the course of a four-night stay for two. And although Drew Patterson, Jetsetter’s chief executive, acknowledges that the “system broke down a little,” the site didn’t offer refunds or price reductions.
The lure is simple: Sites like Jetsetter, SniqueAway and Vacationist offer deals at hotels that cut room rates by up to 50%, but members have just a few days to sign up, or until available dates sell out, whichever happens first. Membership is free to anyone with an invitation or an access code, neither of which are hard to find, but by limiting deals to “members,” the sites have been able to offer bigger discounts than sites like Expedia and Travelocity, without the blind bidding of Priceline or Hotwire, site executives say. The field has gotten particularly crowded in the last year, with travel booking sites, fashion “flash sale” sites and even group-buying sites like TheDealist jumping into the vacation market.
The truth is, no matter how deep the discount, these “flash sales” have tremendous benefits for the hotels. They are commonly promoting rooms that wouldn’t have sold anyway, says Roebrt Mandelbaum, director of research for Colliers PKF Hospitality Research, because it’s the off-season, the weather is bad or because there are other, more reasonably-priced hotels nearby. Under those conditions, any sales are a deal for the hotel, says Lanny Grossman, the president of travel marketing firm EM50 Communications, who has helped several of its dozens of hospitality clients arrange deals with sale sites. “We’re picking days when [the room] was less likely to sell anyway,” he says. Consider that the sites take only a 15% cut of rooms booked, and even a modestly successful sale can generate thousands in revenues for the hotel.
As more hotels have begun using flash sales – and consumers have responded – the sites have gotten more competitive. For travelers, this means “research” must include checking rates not just at the property itself but at other flash sale sites, too. Katie Coakley of Vail, Colo., amended a planned eight-day trip to St. Lucia this month to spend four days at Mt. Cinnamon in Grenada after spotting a deal for the resort on Jetsetter. “It was the cutest little casita,” she says, sold on a $199-per-night price tag, beach views from the balcony and the kitchen’s kitschy orange fridge. A check of Expedia revealed the price was better than comparable resorts on the island.
Just as the Jetsetter sale wrapped up, SniqueAway opened its own sale for Mt. Cinnamon, with prices as much as 15% cheaper. “I hadn’t even heard of SniqueAway, so I didn’t check it,” she says. “I might, now.”
Deal of the Day by Kelli B. Grant
But because most of these deals require travelers to act fast and pay in advance, and can rarely be cancelled or changed, they are rife with pitfalls – including the prospect of a better offer from a different site the next day, or a lower price directly from the hotel itself. Earlier this month, Jetsetter, one of the biggest sites, offered members rooms at Atlantis Paradise Island resort in the Bahamas for little as $250 per night, 22% off the regular price. At the same time, the resort was offering travelers an even better deal – one that would have saved $550 over the course of a four-night stay for two. And although Drew Patterson, Jetsetter’s chief executive, acknowledges that the “system broke down a little,” the site didn’t offer refunds or price reductions.
The lure is simple: Sites like Jetsetter, SniqueAway and Vacationist offer deals at hotels that cut room rates by up to 50%, but members have just a few days to sign up, or until available dates sell out, whichever happens first. Membership is free to anyone with an invitation or an access code, neither of which are hard to find, but by limiting deals to “members,” the sites have been able to offer bigger discounts than sites like Expedia and Travelocity, without the blind bidding of Priceline or Hotwire, site executives say. The field has gotten particularly crowded in the last year, with travel booking sites, fashion “flash sale” sites and even group-buying sites like TheDealist jumping into the vacation market.
The truth is, no matter how deep the discount, these “flash sales” have tremendous benefits for the hotels. They are commonly promoting rooms that wouldn’t have sold anyway, says Roebrt Mandelbaum, director of research for Colliers PKF Hospitality Research, because it’s the off-season, the weather is bad or because there are other, more reasonably-priced hotels nearby. Under those conditions, any sales are a deal for the hotel, says Lanny Grossman, the president of travel marketing firm EM50 Communications, who has helped several of its dozens of hospitality clients arrange deals with sale sites. “We’re picking days when [the room] was less likely to sell anyway,” he says. Consider that the sites take only a 15% cut of rooms booked, and even a modestly successful sale can generate thousands in revenues for the hotel.
As more hotels have begun using flash sales – and consumers have responded – the sites have gotten more competitive. For travelers, this means “research” must include checking rates not just at the property itself but at other flash sale sites, too. Katie Coakley of Vail, Colo., amended a planned eight-day trip to St. Lucia this month to spend four days at Mt. Cinnamon in Grenada after spotting a deal for the resort on Jetsetter. “It was the cutest little casita,” she says, sold on a $199-per-night price tag, beach views from the balcony and the kitchen’s kitschy orange fridge. A check of Expedia revealed the price was better than comparable resorts on the island.
Just as the Jetsetter sale wrapped up, SniqueAway opened its own sale for Mt. Cinnamon, with prices as much as 15% cheaper. “I hadn’t even heard of SniqueAway, so I didn’t check it,” she says. “I might, now.”
Deal of the Day by Kelli B. Grant
