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Essay on The Use of Flash Sales in the Travel Industry

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Introduction Operators in the lodging industry often grapple with excess inventories due to the seasonal nature of their consumption trends. Not only is the lodging business affected by the seasonality of consumption, it is also affected by economic dynamics and market slowdowns. These moderating factors, triggered by the advent of internet and ecommerce have spawned a new business model known as “Flash Sales.” This is an ecommerce trend in which a website may offer a sale on a single product for the duration between 24 and 36 hours (Max & Ritesh, 2011). Potential customers then register as members to receive daily updates of the products in sale through social media or email. Websites partner with suppliers to give great discounts to the …show more content…

Considering the numbers, one may wonder why this business will survive in the market (Dane, 2012). How? Why? When? Groupon had benefitted from the couponing comeback of the mid 2000s, which was fueled by recession, rising food prices, and the advent of digital marketing and social media. Although online coupons accounted for only 1 percent of all coupons distributed, they accounted for about 10 percent of all coupons redeemed (Coupon Facts Report, 2010). Currently, Groupon is the most renowned and the largest flash site. The site is able to feature a daily deal for every city in which it operates, offering great discounts for products. For instance a sushi special that would normally cost $40 is featured for $20 or $59 for a spa that is worth $175. Here, customers would have to pay upfront, within a designated period of time. Such sites are often attractive; not only do they have appealing coupon features, they also possess additional benefits. Sometimes their discounts can reach 70-80% off the market price. This provides the consumer with a low-risk opportunity to experience new services, products, newly opening restaurants that have or ones they may not have tried before. In 2010, the Colorado Vail Cascade Spa & Resort launched a flash-sale offer through Living Social, and the results were immediate. The revenue manager

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