It's a Fine Balance: The Rise in Real-Time Couponing and What Your Hotel Needs to Know
By James Filsinger Chief Executive Officer, EZYield | December 18, 2011
There is no doubt that electronic couponing, or e-couponing, has changed the face of how we buy and sell goods and services. As with social media before it, hoteliers are finding – often through trial and error – how to use this channel to meet occupancy goals, increase brand awareness and benefit the bottom line. On paper, the benefits seem to be endless – e-couponing can increase how many people come through your doors, gets your hotel's name out in the population, provides a boost in low demand periods and engages a new community of guests with this targeted channel. However, it's important to realize that the benefits being waved in the faces of hoteliers from e-coupon providers come with real risks and challenges.
The growing use of e-coupons
Market leader, Groupon, had a little over 50 million subscribers at the end of 2010. According to Reuters, the figure was close to 115 million users in August of this year(i). This rapid growth can, in part, be put down to an increasingly digitalized consumer, but also the state of the global economies, including the recession of 2008 and the financial instability occurring in Europe and the US in recent months. This economic uncertainty is leading to increasingly fiscally cautious consumers, who are being driven by price more than ever.
In brighter economic times, it might have been seen as Scrooge-like to present coupons in the hope of saving a couple of dollars. However, the growing uneasiness about the economic situation – not to mention some of the ludicrous savings that can be made -- means that the stigma previously attached to this method of saving money is evaporating.
What does an e-coupon user look like?
The starting point for evaluating whether your hotel should be engaging in e-couponing needs to be looking at the clientele you want to attract, and contrasting this with the users of e-coupons. After all, every hotel caters to a niche – the Four Seasons isn't aiming for the backpackers, and the backpackers aren't looking for Four Seasons. So what does the e-coupon customer look like?