Tourism conference presentation

Discounting – a route to profit?

Petra ClaytonManaging Director

Custard Communications

Tourism Society Conference12th July 2012

The Changing Customer?

© 2012 Custard Communications. All Rights Reserved

What do customers need?

• Customers are looking for transparency of deals and simplicity of user experience

• Always on the go – we need mobile interaction

• Customers want to believe they have received the best deal


• 70% of LivingSocial escapes customers indicated they weren’t actively looking to travel when they purchased their escape.

• A third of us feel a great sense of pride after getting a good deal and will share success with friends and colleagues.


Breeding the Voucher Vampire

• In the past 12 months 10 million Britons used an online savings code.

• 1 of the 5 top hotel search terms searched in 2011 was ‘Cheap hotels in London’.

• More than one in five of us won’t go to a restaurant unless it’s offering a discount

• 60% of us have ‘discount-dined’ in the past six months

Creating Demand or Diluting Brand


Why discount?

• 70% - boost off season occupancy

• 60% - raise profile

• 35% - reach new demographic

• 24% - to keep up with competition


Discounting In Practice

£200

• Two night stay with dinner/bed/breakfast

£100

• Provide discount for site – 50%

£50

• Revenue share with site – 50%


Does it work?

• 27% of properties claim discount sites are a sales tactic they would repeat

• 33% of hoteliers would not use ‘flash sale’ sites

• 17% have tried group discounting once but would never do it again


The Dangers…

• Diluting your brand• Incremental business– Converting existing customers to deals

• No profit short-term• Cash flow• Dialogue on your behalf


What do hotels say?

Did not make enough revenue per room

Gave up too much revenue to

the sale site

Deal wasn’t as successful as expected

Failed to see any repeat business

Did not attract the right calibre of customer


Are there any positives?

• Exposure to millions of individuals• Brand awareness• Promotion of key facilities / attributes• Platform for key developments / launches• Boost low period bookings• Attract new markets


Discount websites – top tips

• Pick the right partner to suit your brand• Your margins will be affected – focus on

upselling and creating loyalty• Discounting is a short-term tactic not a long-

term strategy – short sharp burst• Deliver the best you can


Not going the discount site route?

• Take control of your hotel’s online presence• Assess strengths and weaknesses across

multiple channels• Inspiring content will inspire purchases• Be creative with offers, not reliant on

monetary discounts• Market reductions effectively


• Provide a deal that is simple• Give customers something they regard as

highly valuable• Guarantee ‘best price’ by booking direct

through your website• Ensure your website is mobile friendly• Communicate to your database!

www.custardcommunications.com/love-loyalty

Tourism conference presentation

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