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Rough guide for travel companies to working with Groupon and deal sites

I think it’s safe to say that no amount of exposing questionable numbers or pointing out pricing faults is going to eliminate daily deals from the marketing landscape.

So, now that I’ve made my opinions known regarding daily deals, I felt it was important for me to provide some tools to help small tourism businesses structure their deals in order maximize their impact.

In a recent rebuttal to Rocky Agrawal’s guest series on Techcrunch , the owner of a BBQ restaurant wrote about his very positive experience with Groupon .

At the end of the day, bashing daily deals is fun but doesn’t really help small businesses protect themselves against making a mess of their finances.

In order to do this, tour and activity operators have to keep in mind that business of running a scheduled fixed availability tour or attraction is quite different from the business of running a spa or restaurant.

As I outlined in my article Does the Groupon model lead tourism businesses racing for the bottom , tourism based businesses do not attract repeat customers, so they therefore do not benefit from the argument that the daily deal is going to bring back loyal customers.

Activities generally don’t offer value-adds so the customer isn’t going to purchase more than the value of the coupon and, probably most importantly, tours and activities have limited inventory and are generally scheduled, which means they have to booked in advance.

Before considering a daily deal, make sure to read the agreement carefully .  There is an interesting analysis of the Groupon terms and conditions available here .  The advantage that tour and activity companies have over restaurants and spas is that they have the ability to manage inventory more efficiently.

Daily deals are a great opportunity to test out yield and channel management features if the reservation system supports it.

During your negotiation with the daily deal sales person, you should keep in mind that your goal should be to maximize your return on investment while reducing the impact to your administration.

Once you’ve had a chance to review the agreement and have checked your reservation system to make sure it supports channel & yield management, you will want to consider the following:

If your reservation system has the ability to allocate specific inventory to the deal, then you should do this well in advance of the deal running, and make sure that “Limited Availability” is built into your deal terms.

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