Flash deals service Groupon says it is establishing itself as an online travel agency as the next logical step for it in Europe.
The company has already set up separate tour operating companies in France and Germany enabling it to legally package tours through Groupon.
According to Gregory Linn, director of hotel and travel – Europe, Groupon is ‘little by little becoming an OTA with a difference’, which will enable it  to capitalise on customers receving deals twice a week but not necessarily getting what they want.
“We want to give them a second choice to go to a more traditional mode but still with more interesting packages.”
Linn adds that the company is currently looking at XML development to help it go down the OTA route.
Speaking at a Travel Technology Initiative session on Optimising Digital Sales, Linn says 70% to 80% of customers have no intention of buying so are already removed from the average 15 sites and five-week planning that most consumers go through.
Groupon is also unveiling a luxury hotel brand called Edenist for the French market which has, so far, been ahead of other countries for the company’s business model.
Linn likens the service to Voyage Prive but says there are no plans to extend the brand to other countries at this stage.
In the US, Groupon teamed up with Expedia to offer hotel flash deals but Linn says the model is unlikely to be extended to Europe.
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This is really interesting, and I’m surprised the industry hasn’t made a bigger deal of it. The challenge for Groupon, as it is for any OTA, will be the technical aggregation of inventory from a segment industry that isn’t technically proficient.
I’m not so sure how well this will work in other regions. Europeans are the biggest consumers of static vacation packages (the author doesn’t mention dynamic packaging so I’m making an assumption here), but North Americans generally aren’t, and even in Europe, the consumption of static packages is falling because the technology to support dynamic packaging is getting cheaper and more prevalent.
my 2 cts:
Well, in France and Europe we don’t have many big hotel as in the US or Asia.
In France, 80 % of hotels landscape are between 25 to 50 rooms and have no interest to deal with this kind of channel distribution.
Better to invest time and ressources in direct distribution and building smart hotel products & services that fit the needs of “direct” customers.
From an investor standpoint I’d be worried. if you couple this OTA idea and their recent appointment setting tool idea it seems they are grabbing at anyway to keep going. That’s my view as a non Groupon shareholder. Maybe I’m wrong though.
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Very interesting.
The Groupon model makes perfect sense to the hotel and travel industry for yield management purposes. It will be interesting to see if the “big discount” model will work and for which kinds of hotels (e.g. attractive luxury hotels, who don’t want to hurt their brand?).
This makes me feel uneasy but then the masses like RyanAir, so the masses will like Groupon. Once technology integrates especially with channel managers then hotels will be able to make use of this, but the packaging element is certainly a good question to raise – and how hotels handle BAR Guarantee. Also how will availability work – at the moment many deals for hotels have to be booked independently to the voucher purchase.
But otherwise – if Groupon does as it has in its voucher business I expect it to do well. I just expect I won’t be a customer…
What hotel or airline or even tour operator will be stupid enough to accept Groupon’s terms of contract?
those that are actually smart enough to not just accept the way things are written…
You’re only an OTA if people of value advertise with you.
Yeah… good luck with that. Groupon has watered down brands, and hurt companies.
They’re the poison that is “oh my they’re in trouble… they’re doing a groupon”.
See you on the other side of the bubble.