Miha BRATEC, SEB LU, University of Ljubljana, firstname.lastname@example.org
Katarzyna Barbara MINOR, Tourism Department, Cardiff Metropolitan University, email@example.com
HOW TO CITE:
<insert-authors> (2019). <insert-abstract-title>. AIRTH 2019 Conference: Innovation and Entrepreneurship for Sustainable Success; 2019 Sep 12 - 14; Innsbruck, Austria. Retrieved: <insert-date>, from http://www.airth.global
Daily deals (DDs) emerged during the last recession as a social form of shopping for discounted hotel rooms. Their propagation of heavily discounted hotel vouchers naturally resonated positively with the then cash-strapped customers and the adoption by the hotels was mostly fuelled by their desperate need to mitigate the lowered demand caused by the recession (Minor, 2017). In the following years, many DDs specialised in focusing purely on hospitality and tourism products and for the most part, had moved on from the coupon-based market places. Instead, they became a proper inventory distribution channel for hotels offering real-time availability and reservation functionality akin to the online travel agents (OTAs) (Budler et al., 2019).
While the DDs distribution channel has been a debateable one since its appearance (Berezina et al., 2016), as it required hotels to offer steep discounts (of minimum 50% up to 70%) in order to being featured while charging the highest commission rates in the industry (25% to 40%), it managed to survive the period of recession. Despite having been slightly transformed (lowered required discounts and commission rates), it continues to form part of the current e-distribution system for hotels. Yet, in theory as well as in practice there is still a lack of clear evidence and guidance on how to best use this channel. Hotels are mostly using it on a purely ad-hoc basis, relying on their intuition and thus often neglecting the necessary analytical and revenue-management based techniques. Similarly, they lack clear evaluation mechanisms in order to use the DDs channel in their favour in terms of profitability and any example of its more informed view can be deemed innovative.
Therefore, the purpose of this exploratory research is to uncover and analyse the best practice examples of use of DDs channels by the hoteliers. Through a collection of 25 grounded theory-based, semi-structured interviews on the use of DDs channel with theoretically sampled hotel managers in the UK and Slovenia, recorded between 2015 and 2019, we thematically explore the different analytical tactics and contexts in which hotel managers manage to use DDs to their favour. Further, we look at the most commonly used revenue management and distribution tactics hotel managers pursue within their collaboration with DDs and how exactly they monitor the outcomes of such promotional actions.
As an outcome of our analysis we aim to contribute to a deepened understanding of efficient and knowledge-based DDs use. This adds to the hotel revenue and distribution literature by being the first study exploring the DDs‘ channel usability through the perspective of analytics and revenue-management based approach. Equally the study also contributes to the more hands-on innovation literature. It provides guidelines for practitioners shaped by an analysis of best-practice examples of knowledge and analytics-driven use of this novel, yet still “mysterious” distribution channel. This should enable them to use DDs‘ channel in the most profitable and strategic way.
Berezina, K. et al. (2016) ‘The managerial flash sales dash: Is there advantage or disadvantage at the finish line?’, International Journal of Hospitality Management, 54(April), 12–24.
Budler, M., Bratec, M., Minor, K.B., Tomat, L. (2019, under review). A business model approach towards understanding the daily deals in internet distribution systems. Tourism Economics.
Minor, K. B. (2017) Hospitable or Hostile ? The Impact of Daily Deals in the Hotel Sector of the Hospitality Industry. Cardiff Metropolitan University.