Constant discounting is damaging brand, hoteliers tell Hotwire survey

Discounting and flash sales are having a negative impact on brand perception, according to a survey of European hoteliers by Hotwire.com.


The US-based discount travel site surveyed 75 hoteliers who manage over 13,000 hotel rooms plus 2,000 British consumers in September 2013.


The findings suggest 75% of hoteliers feel that long-term discounting is having a negative impact on their brand. The survey found 81% of hoteliers discount more now than five years ago.


Hotwire’s Britain on Sale research conducted in December 2012 revealed more than half of today’s consumers never or rarely pay full price when they shop.


In addition 57% use discounts and buy items on sale, and 90% said they will continue to look for discounts and sales in the same way even if their economic situation improves. 


Michelle Rosinsky, senior manager at Hotwire.com, said: “Hoteliers are concerned that if their brand is seen as ‘always on sale’, it will be devalued and end up going the way of other companies and industries where consumers are never prepared to pay a premium.


“We’re not expecting that hoteliers will suddenly give up on discounting, because it is still an effective way to increase occupancy; however, we believe they’ll become more selective about the channels they use, the value of discounts and the timing of their offers.


“Discounting will become more last-minute and increasingly they will utilise opaque sites and mobile.”


The survey also looked at mobile finding it is becoming an increasingly popular channel for offering exclusive discounts targeted at last minute bookers.


Twenty-one per cent of hoteliers are offering mobile-only discounts and 40% of hoteliers said they are discounting on mobile more than they did a year ago.


Hotwire found one in 20 hotels offer the deepest discounts within the last 24 hours before check-in while 28% offer the biggest discounts within seven days.


‘Opaque’ pricing such as lastminute.com’s ‘Secret Hotels’  is also becoming more popular.


Rosinsky said: “Hoteliers see opaque as one of the safest methods for discounting, because the name of the hotel is not disclosed until the customer has paid. Seventy-five per cent of hoteliers told us that brand protection is one of the reasons they use opaque.”


In terms of the customer, they are less loyal more price-conscious and savvy at deal finding. Nearly a third of travellers said they never or rarely buy a hotel room that hasn’t been discounted.


“In this environment, discounting is a necessity for hoteliers, but as most of them now realise, they need to be careful how it’s done, because there are some inherent risks. It’s about choosing the right way at the right time for the right type of customer,” added Rosinsky.

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