Hotel bed
106 days ago
 

Groupon splits with Expedia, launches Getaway Tonight [UPDATED]

UPDATE: Groupon has reached out to clarify that the Expedia partnership continues as a supply partner for the brand’s Market Picks inventory. This supply comes from the brand’s status as an affiliate of the Expedia Affiliate Network. Groupon is no longer co-branding, using Expedia to source Flash Deals or doing cross-promotion on Hotwire or Expedia.

From a spokesperson: “We’ve been incredibly successful on our own at promoting travel deals to our more than 200 million subscribers and sourcing our travel Flash Deals inventory primarily through the Groupon Getaways sales team. Getaways gross billings increased 20% year over year to $221 million in Q1, with a strong growth of 26% in North America. Getaways 2013 gross billings were $695.7 million.”

***

A bit of new product and partnership news from Groupon Getaways.

Groupon Getaways and Expedia have parted ways

The brands have split off from the joint venture announced back in 2011. The deal originally meant that the brands would co-brand and cross-market hotels, and other specific package deals.

grouponexpedia

Expedia remains a strong player in travel, with plenty of its own demand generation tools. The partnership with Groupon didn’t have the same appeal as it had prior, as the Groupon brand has lost some of its shine since the original co-branding announcement was made on the day Groupon filed to go public in 2011.

There was no mention of how much demand there was for the co-branded product, but a lackluster conversion rate on these deals would also push the entities towards dissolution.

Another reason why: New last-minute hotel product Getaway Tonight 

The original Groupon Getaways/Expedia linkup focused first on hotels, and expanded out to include a wider array of travel products.

Now Groupon Getaways is stepping into the crowded last-minute hotel market, going head to head with the likes of Hotel Tonight. The new product’s brand – Getaways Tonight – makes that particular comparison crystal clear, while still delivering on the brand proposition of finding getaways at Groupon-sized savings.

Simon Goodall, the VP and GM of Groupon Getaways, said to Tnooz:

Getaway Tonight is yet another move by Groupon to become a full travel marketplace. By developing a product that helps our partners maximize their profitability by driving incremental revenue, we’re moving closer to become a full-service inventory management solution for our partners.

In addition, giving our customers access to exclusive deals on same-day booking further enhances the overall value of checking Groupon first before you travel.

As travel becomes a bigger part of Groupon’s business (given the softer demand for the ‘daily deals’ segment), this fundamental behavioral change is essential. Groupon wants to position itself as the leader in cut-rate travel, both last-minute and further afar.

The split between Groupon and Expedia also becomes more clear with Goodall’s statement related to becoming a “full travel marketplace” and a “full-service inventory management solution.” That’s pushing into OTA territory, so its no surprise that the Expedia link-up didn’t make sense anymore.

Rather than simply pull inventory from another source, however, Groupon has built a proprietary extranet that enables hotels to upload inventory and update pricing in real time. Hotels are able to upload inventory far in advance, setting deals to trigger only on the same-day booking window. Of course, this is another channel to manage but could help hotels to dump historically unsold inventory with little day-to-day management.

Getaway Tonight - Chicago Screenshot

Groupon rightfully claims that this product is especially suited to its massive mobile presence -  more than 50% of all of the company’s transactions come via mobile. The brand also has over 80 million app downloads, with “hotel” being the most-searched term within that app.

The competition only gets hotter as OTAs and others push further into the last-minute booking model. The pressure is on – will there be an overall winner? Or is this segment going to maintain multiple players, each differentiated according to a particular demographic with a specific set of interests?

It seems likely that the commodification of hotels will simply lead to more brands offering discounted last-minute bookings – something that direct suppliers may be reluctant to offer themselves (and reduce perceived value), even if it means managing yet another distressed inventory channel within a complex distribution environment.

NB: Hotel bed image courtesy Shutterstock.

 
 
Nick Vivion

About the Writer :: Nick Vivion

Nick Vivion is a reporter for Tnooz, based in New Orleans, USA.

His passion for travel technology led him to travel around the world shooting travel videos for Current TV and Lonely Planet TV in 2006 and 2007.

He shot on Mini-DV, edited on a white MacBook, uploaded and shared online as he traveled. His moxie for travel video has resulted in over two million views on his YouTube partner channel.

In addition to travel, Nick co-founded of one of the web’s most talked about LGBT media sites, Unicorn Booty, and has gone "blog-to-brick" with a bricks-and-mortar restaurant called Booty's Street Food in New Orleans – serving street food from around the world.

 

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  1. Jamais Trujillo

    I have started to get overwhelmed with the Groupon emails. I like the idea of the Getaway Tonight. I only wish we could offer our condo rentals here.

     
 
 

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