What is the meaning / definition of Flash Sales in the hospitality industry?
Flash Sales are highly discounted and time-limited sale promotions. Hotels usually use this way of discounted sales to sell an unsold inventory. Selling those ‘hot deals’ is an opportunity for underperforming hotels to generate growth.
Flash sales can be initiated by email campaigns, which reach consumers who are usually not contacted through existing distribution channels.
These types of high discounted promotions are often controversial. They are seen as costly. Through the high commissions and steep discounts the (existing) revenues of the hotel might be negatively impacted. Also the hotel could be undercutting its own direct price positioning.
However used smartly it can be beneficial and help turn around the financial results of distressed and under-performing hotels. It can be a short term investment serving a larger long term goal.
Flash sales can be used to balance out a temporary shortcoming on sales / demand.
Example: In some city destinations where occupancy is traditionally low during winter or summer (due to the cold or the heat), the implementation of flash sales campaigns could be a ‘surgical method’ to gain extra occupancy points only in those periods of need.
It is also important not to do an aggressive discount on room only or bed and breakfast prices.The offers should be smartly configured, incorporating extras into a package that has a high face value but low cost, to offset the discount given. This way the impact on the ADR is controlled, and consumers still get a sense of a deal with a lot of added value.
- Distribution Strategy
- Channel Management