For hotel marketers, Groupon is not as attractive as it looks

Groupon.com is the current it-website, just like you have it-bags in fashion. It offers special deals  with up to 60-70 % discount on hotels, restaurants, spas, ... rates. It is very attractive for customers, but a little less for hoteliers. It may seem at first very interesting for hoteliers as it is a new source of revenue, but it is not to be used at all times.

Indeed, the article reveals the advantages and inconvenients of working with Groupon through hoteliers' points of view. It appears that the special deals made on the website is not very interesting for hoteliers as they have to considerably cut down their prices; more than they expected. To make special deals to appear on the website, hotels have to lower their prices of at least 50%, with an additional 10% commission rate towards Groupon. That leaves a small revenue in the end for hotels.

I agree with the article when it says that it is interesting for hoteliers to publish special deals, but only through rough times. When the activity is low, it can bring revenue.

"...some revenue is better than no revenue at all."
This statement is true, but I believe that hoteliers should be careful not to sell too cheap. Indeed, if they reduce their prices too much, they might sell at a loss. A very cheap deal is great for customers, but on the other side, it can cost much more for hoteliers. Indeed, they have to make sure they cover their fixed costs before selling cheap. Hoteliers should analyse when to work with Groupon, and at which price.

Link to article