Collective buying websites 'devalue' hotel brands

Posted by: Stuart Miller
27 Apr 2011
I disagree with these "marketing" people's stance on the daily deal websites 'devaluing' the brand....I nabbed a hotel deal that Gonabit did and I saw they sold LOADS for the Banyan tree..I spent more than double what the deal was at the hotel once I got there and I will for sure go back next time I have a visitor in the UAE. I never would have know that hotel was so amazing if it hadn't been for the deal they did with that site. If you're "brand" is good enough and you can back up your talk with your walk then the customers generated by the press that the deal websites create should generate you a large amount of return business regardless of the price. I read the survey that Gonabit released a few weeks ago and it said that like half of their users make over 60k USD a year...that's like 20,000AED a month....that means basically you're outlet's target demographic I would figure. I'm no expert though but I think the hotels that use these sites are pretty happy...and luxury ones too. FAIL on Ritz's part there.

Posted by: alex t
27 Apr 2011
First lets not forget the main reasons for devaluation of any brand and thats poor customer service, or, in the case of the Westin, a $17 million lawsuit as a result of guests contracting legionnaires disease. Hotels here are raking it in, using the cheapest possible staff on the front desk and facing customers. From the 5 star to the budget ones. I have been and stayed in many and its a constant hassle trying to get anything done. Language barriers, lack of training, and not enough power given to these customer facing staff, all leads to a complete devaluation of a global hotel brand as far as i'm concerned. The level of service you get in the ritz carlton, four seasons, or intercontinental elsewhere in the world is much better than in dubai - for the amount you get charged. Luxury hotel brands only differ from budget ones in this area through size of rooms and amenities in the hotel. The staff are all the same. Most of the people staying in hotels i'm sure are travellers. Group buying websites can be useful if targeted to the resident population to generate awareness and be top of mind by allowing a prospect to be able to sample the goods. in the end if the service and the product is great, people won't mind paying top dollar for it. Now since alcohol is licensed almost exclusively to hotels and no where else, there could be an opportunity here to target more customers for the F & B section of the hotel - there's too much choice in this country. Once sampled, you'll go back and pay the normal price for it. Marketers still need to take into account that this is a region which has many different variables and conditions acting on business operations, and they need to be more creative with their strategies.

Posted by: Yallah Bye!
28 Apr 2011
Yes Alex T, just like a Ferrari only differs from a Skoda because it goes faster!! These sites are turning out to be a curse for brand managers and owners who have hotel operators not giving a damn about the brand and solely interested in the short term gain of the volume gain. Customers on deal a day sites are not loyal, they are opportunistic (I know I am one) who want to try new things. This model would work if brands seen a pick-up in returning guests or increase in loyalty acquisitions, but they dont... all they see is an increase in volume, no increase in revenue and with no added brand value. That is of course unless they massively mark-up the price then "cut" it by 50%. Many do this today. Deal a day sites are a short term solution and an easy way out for lazy marketing people to sell volume. Not for luxury brands.

Posted by: Ella Fisher
28 Apr 2011
Can I agree and disagree with the article. Firstly these sites are a good way or a) promoting an outlet and b) giving great value to consumers. However I disagree with both of the comments above. This does show a certain amount of desperation and at the moment there are nearly 10 group buying sites in a market the size of Portsmouth in the UK. However how can a hotel / F&B outlet justify the discounts given. 60 plus % off with the buying site taking anything from 10-20% of the remaining 40%. The outlet is therefore left with 20% - where is the win there for the outlet apart from having a loss leading product. How many times can the outlet do this. People will hunt for the deals and within a short space of time, nobody will pay full price in the region!! The Entertainer is the only really 100% win win for both parties. Offers real value to the customer and outlet. Anyway, I am sure that after the summer there will be a big shake up of this side of the market becasue there are now 9 of these sites with others popping up all over the place - is there room? Dont think so.

Posted by: Drew J
28 Apr 2011
First of all Hotel Marketers need to understand what works for them. They need to look at a brand from a customer's perspective rather than their own. Imagine giving someone an experience that they wouldn't have had otherwise. Imagine the same customer who have experienced something great, spreading the word around. Being in the shoes of a customer, I think "deal websites" are great for every business. I don't think a "deal" devaluates a brand in anyway. Its the quality and customer experience that really controls the reputation of a brand.

Posted by: Fact Finder
29 Apr 2011
Dear all who commented and who are PR leaders: PR Leaders: Perception of brand as you are describing is wrong at first place, These Days if Big name can not offer something, it's nothing for customers. Why you believe that by these offers brand image is insulted/falling down. Don't you feel that the level of services you we are providing is the once affecting brand image. Why we have several managers and you find none in the lobby to meet with customres, I am talking as whole based on experience including Kempinski MOE, Raffles Dubai, Rotana, Habtoor grand etc and its not pointing out any hotel but its just some big names. Big Brand is not by count of properties or by claiming big things, it's about service & culture which unfortunately we is a theory only now. Commenting freinds: Big names are truly appointing cheap staff, look at recession adn EU market many people are jobless and from most part of EU & North America they are ready to work for very very salary, so hotels taking benefits. but once those people come and secure job (even at very low base salary) they do nothing except performing responsibility of being a statue at reception or door. Crisis has nothing to do with training, why our training managers & directors are getting salaries if they can not creat talent. If they are expecting magicians to join then there is no need for Training people. Basically whole system is getting wrong. When you appoint small market recruitment consultants as your HR head then should expect the same. Again, plz never mind as it's just comments and nothing personal. Thanks.