I think it’s safe to say that no amount of exposing questionable numbers or pointing out pricing faults is going to eliminate daily deals from the marketing landscape.
So, now that I’ve made my opinions known regarding daily deals, I felt it was important for me to provide some tools to help small tourism businesses structure their deals in order to maximize their impact.
In a recent rebuttal to Rocky Agrawal’s guest series on Techcrunch, the owner of a BBQ restaurant wrote about his very positive experience with Groupon.
At the end of the day, bashing daily deals is fun but doesn’t really help small businesses protect themselves against making a mess of their finances.
In order to do this, tour and activity operators have to keep in mind that the business of running a scheduled fixed availability tour or attraction is quite different from the business of running a spa or restaurant.
As I outlined in my article Does the Groupon model lead tourism businesses racing for the bottom, tourism based businesses do not attract repeat customers, so they do not benefit from the argument that the daily deal is going to bring back loyal customers.
Activities generally don’t offer value-adds so the customer isn’t going to purchase more than the value of the coupon and, probably most importantly, tours and activities have limited inventory and are generally scheduled, which means they have to booked in advance.
Before considering a daily deal, make sure to read the agreement carefully. There is an interesting analysis of the Groupon terms and conditions available here. The advantage that tour and activity companies have over restaurants and spas is that they have the ability to manage inventory more efficiently.
Daily deals are a great opportunity to test out yield and channel management features if the reservation system supports it.
During your negotiation with the daily deal sales person, you should keep in mind that your goal should be to maximize your return on investment while reducing the impact to your administration.
Once you’ve had a chance to review the agreement and have checked your reservation system to make sure it supports channel yield management, you will want to consider the following:
1. Limit inventory for deal seekers
If your reservation system has the ability to allocate specific inventory to the deal, then you should do this well in advance of the deal running, and make sure that “Limited Availability” is built into your deal terms.
For example, if you offer 15 seats you may want to allocate a maximum of 5 seats to be available for daily deal customers.
This serves to limit your exposure to 33% of your inventory on any given tour and still allows enough inventory for regular paying customers.
2. Limit redemption of your deal to slow days
Most tour and activity operators have busy days and slow days. The problem is that, like most of your customers, your deal seeker customers are probably going to want to book the tour on popular days.
Consider limiting the deal seekers to slow days or, if you want to allow deal seekers to purchase during your busy times, refer to the previous suggestion of limiting the number of seats available to deal seekers.
This is basic yield management and is a practice often done by hotels and other accommodation providers to fill rooms during slow periods. If you add this limitation, it ensures that your busy days will be filled with your highest paying customers, therefore maximizing your revenues.
3. Force deal seekers to online bookings
Make it clear that deal seekers need to use your online booking system to redeem their vouchers or book your tours. This allows you to control how the deal is redeemed and what restrictions will be applied.
For example, if the deal seekers do a search for availability and you specify that they must book a specific tour, then you can limit the number of seats they can book and the pricing that is displayed to the customer.
Limiting the deal seeker to online bookings also has the added effect of reducing your administration and reducing your costs for managing the booking. Since your revenue for deal seekers is going to be much less, it is important to find ways to reduce the human costs for managing these tours.
Even though you may pay a little more for your technology to handle the booking, the cost will always be less than the cost of a human to process the same booking.
4. Create a unique offering for deal seekers
Instead of discounting your regular tours or activities, try creating something totally different for your deal based customers. This has the effect of allowing you to determine the costs and revenues for a specific product rather cannibalizing your core products.
It also allows you to limit the bookings and availability for the specific product which guarantees that your existing products will not suffer from deal seeker overload.
The unique offering should be different enough from your regular offering to avoid confusion and to reinforce the value of the deal. When creating a deal offering like this, consider partnering with other local services to enhance the deal without increasing your costs.
For example, consider including a discounted meal at a local restaurant, free admission to a partner attraction, or a coupon for a local retailer. In this way, you can actually extend the benefits of the deal to your partners who may run a similar deal that includes your business in the future.
5. Cash equivalent versus discounted service
This is by far, my number one recommendation. Let’s take the example of a sightseeing operator who offers a daily tour for 15 people. The tour is valued at $150.
If you offer your tour at a discount of 50% off and stick with the average 43% commission to the daily deal provider, then your revenue on the tour will be $42.75.
Given that the customer purchasing this voucher is not going to be a repeat customer and is not going to purchase anything beyond the value of the coupon, your revenue on this sale will be $42.75. If you change the voucher to be a fixed value voucher with a cash equivalent, for example $20 towards any tour for $10, then your revenue changes dramatically.
Using the same example, your tour is $150 – $20 = $130. Subtract the additional $4.30, which is the daily deal cut and your take on the tour is actually $125.70.
This is quite a big difference compared to $42.75. Offering the cash equivalent deal has an added benefit of not devaluing your core offering. The tour is still $150.
Companies like the Gap, Old Navy, and others have offered these cash equivalent deals so there is precedence.
If the sales person you talk to says that this is not possible, then remind them of these high profile examples. They work well because they don’t limit what the customer can purchase which means that the up-sell potential is higher but they are not as good for the deal provider because the deals are smaller.
Structuring your deal this way also means not having to change your existing pricing or product offerings.
6. Be confident with your numbers
Don’t let the sales person pressure you into doing a deal that doesn’t work for you. For many businesses who have not been careful with their deals, only the deal provider and the customer benefit.
If you use the aforementioned suggestions for structuring your deal and stick to your requirements, then you will increase your chances of ensuring that your deal is 1) good for your business 2) great value for your customers 3) successful for the deal provider.
The overwhelming response to any daily deal cautionary post has been that businesses need to do their due diligence and plan their deals properly. Just take a look at the comments on my previous Groupon post for example.
I would argue that the hordes of daily deal sales people are not doing small business any favours by being so aggressive with their sales tactics and, therefore, it makes sense to empower small businesses to protect themselves.
If you are a tourism based small business or you work with small tour and activity operators, please encourage them to prepare themselves.
If we help them prepare, hopefully we can reduce the number of daily deal victims we so often read about online.
Southwest Airlines kicked off a big 40th-anniversary airfare sale on Tuesday — and now American Airlines is crashing the party with a comparable autumn airfare sale, starting at $40 each way, that ends Thursday night — that’s tonight.
The deal: Thanks go to SmarterTravel.com for alerting me to American’s U.S. Fall Travel Sale. The pricing is similar to Southwest’s staggered sale fares of $40, $80 and $120 each way, excluding tax. The fare varies by distance. American’s airfares, however, require a round-trip purchase, and checked-baggage fees may apply.
Sample each-way airfares from Los Angeles International Airport (LAX) include $40 to Phoenix, Sacramento and San Jose; $80 to Albuquerque, Austin, Denver, El Paso and Tucson; $120 to Houston, St. Louis and Key West, Fla.; and $130 to Orlando, Fla. . The sale also includes each-way flights from Bob Hope Airport in Burbank (BUR) for $80 to Seattle and $120 to Houston, New Orleans and Newark, N.J., and other destinations.
When: The offer is good for travel from Aug. 23 through Nov. 16, but must be purchased by 9:59 PDT tonight. The sale prices don’t apply to Fridays and Sundays, and some blackout dates apply.
Tested: I found availability for an $80 flight from Burbank to Seattle at 8 a.m. Sept. 8 and the same price returning at 6:30 p.m. Sept. 13.
Contact: American Airlines U.S. Fall Travel Sale, (800) 433-7300
Also, it helps to shop either four to six weeks before you flight since airlines typically charge the highest prices eight to 10 weeks in advance and two to three weeks in advance. If the price you see from four to six weeks out still seems high and you have a risk-taking persona, try waiting until the week before, shopping on Tuesday, Wednesday and Thursday to see what’s offered.
But shoppers beware, if you find that deal – be prepared to buy it on the spot with a credit card out and ready since the deepest discounts usually go fast and limited seats at those prices are available.
ENCINITAS, Calif. – Crews have removed the popular but illegal Surfing Madonna mosaic from the wall of a railroad bridge underpass near San Diego.
The San Diego Union-Tribune reports the removal began at 9 p.m. Wednesday and was completed about two hours later.
Artist Mark Patterson agreed to pay for the removal of the 10-foot-by-10-foot stained glass work that mysteriously appeared days before Easter in the beach town of Encinitas.
Patterson says the piece was not damaged when it was taken down.
The colorful piece depicts the Virgin of Guadalupe surfing a wave along with the words “Save the Ocean.”
The mosaic was considered graffiti under the municipal code and city officials said it must come down.
Patterson says he will now focus on finding a permanent home for the Madonna.
Information from: The San Diego Union-Tribune, http://www.signonsandiego.com
FLORENCE, Italy – Florence officials are launching a campaign to bring the “Mona Lisa” back for a visit.
Leonardo da Vinci brought the painting of a Renaissance woman with an enigmatic smile to France in 1516, and it has mostly hung in the Louvre Museum since — with several famous exceptions.
One was its theft by an Italian immigrant in 1911. The “Mona Lisa” was recovered when he tried to sell it in Florence two years later. Before returning to France, the “Mona Lisa” was shown in several Italian cities.
To mark the anniversary, officials on Thursday announced a campaign to collect 100,000 signatures asking the Louvre to allow the painting to be displayed in Florence in 2013.
The painting traveled to the United States in 1962 and Japan and Moscow in the 1970s.
WINTER HAVEN, Fla. – Winter Haven is 100 years old.
The central Florida city celebrated its 100th birthday Wednesday. City officials wore period costume while listening to period music. They also had birthday cake supplied by Publix super market, whose founder opened the first store in Winter Haven.
The city is also home to Cypress Gardens, which was one of Florida’s first theme parks known for its water ski shows and botanical gardens. It is now home to Legoland, a 150-acre theme park scheduled to open its doors on Oct. 15. More than 50 million of the iconic plastic Lego building bricks are being incorporated into construction.
The Legoland park in Florida is the fifth in the world and the first one on the U.S. east coast.
Rancho Santa Margarita, CA, June 23, 2011 –(PR.com)– America’s leading website for people traveling with pets, Pet Hotels of America, has unleashed its start-of-summer travel deals, offering huge discounts on many of its 89,000 pet-friendly hotel. Travelers may also receive discounts on pet-friendly car rentals. These discounted prices are intended for people traveling with or without pets.
“We have approximately 89,000 pet-friendly hotels from which people may reserve on Pet Hotels of America,” said Lisa Porter, CEO Pet Hotels of America. “The deals we are offering are exceptionally low so all travelers, even those who didn’t catch the early-bird specials, have the opportunity to get a last minute deal. Now is the time for people to reserve at hotels and car rental companies that accommodate pets.”
Pet Hotels of America’s sales are mostly 20 percent discounted from the usual price.
A sampling of some of their specials include select rooms at: Hilton Tucson El Conquistador Golf and Tennis Resort $109 per night; Radisson Suites Tucson $77 per night; Orlando: Rosen Inn Closest to Universal $75 per night; Best Western Plus Orlando Gateway $102 per night, Wyndham Orlando Resort.
On the high end, Washington, DC travelers will find special prices at Embassy Row Hotel $325; Palomar Washington DC, A Kimpton Hotel $338, Topaz, A Kimpton Hotel $368 per night and The Dupont Circle Hotel $989. All hotel rates are subject to change, which is why Pet Hotels of America urges people to make their travel plans while these prices still apply.
“We are encouraging travelers to make their hotel and car reservations as soon as possible, as prices as low as these, especially for the high-end hotels, won’t last,” said Pet Hotels of America Chief Marketing Officer, Steve Wiideman.
To help with pre-planning a vacation with pets, Pet Hotels of America offers travel tips and information on trails to hike, pet-friendly beaches and parks and other pet-friendly places to visit within various cities and areas in the United States.
To simplify the travel-planning process furthermore, Pet Hotels of America has a page with direct links to each pet-friendly airline so people may read the pet policies and make reservations.
“We want to make sure everyone gets a chance to find a great deal on a hotel,” said Wiideman. “At Pet Hotels of America, early-planning isn’t necessary, however, these deals come along only once in a while, so travelers should take advantage of them while they last.”
A complete listing of America’s pet-friendly hotels, car rental agencies and airlines that accommodate pets can be found at Pet Hotels of America.
“Pet Hotels of America also gives pet owners a chance to submit their pets’ photo along with a description to qualify for its ‘Pet of the Week.’ The winning pet photo will be posted on most of our website pages and its owner issued a Pet e-gift certificate,” said Porter. “We encourage travelers to send in photos of their furry friends while vacationing. Submitting is easy and simply requires uploading a photo and posting a brief description about the pet.” Submissions may be made at http://www.pethotelsofamerica.com/pet-of-the-week.html.
Please visit the Pet Hotels of Americas website at www.pethotelsofamerica.com or call (877) 375-1946 ext. 1 or ext. 2 for more information.
Article source: http://www.pr.com/press-release/333956
WASHINGTON (TheStreet) — The explosions of ill-gotten Fourth of July fireworks are already reverberating through America’s streets and the wails of travelers who waited this long to plan a Fourth of July trip are just adding to the din.
With only one weekend between now and Fourth of July weekend, those trying to plan a last-minute holiday trip aren’t exactly alone in thinking a federally mandated three-day weekend would be a great time to get away. Though 61% of adults stayed home and tended the grill last Fourth of July, according to the National Retail Federation, 11.5% (or 27 million) decided to spend the holiday weekend traveling.
With only one weekend between now and Fourth of July weekend, there are still plenty of people trying to plan last-minute holiday trips.
Those holiday travelers fall right in line with the 68% of travelers that told American Express’(AXP) Spending and Savings Tracker they were planning an average of three weekend getaways this summer and taking an extra vacation for each trip. Considering that airlines including United(UAL), American(AMR), Delta(DAL) and U.S. Airways(LCC) have already put a $30 premium on Fourth of July weekend arrival and departure dates, according to FareCompare.com, procrastinators can expect to spend a lot of time eyeballing the taillights of many of their Fourth of July travelers.
If latecomers are going to celebrate America’s independence by trapping themselves in bumper-to-bumper traffic, the least they can do is make sure they’re crawling to and from some place tolerable. Vacation rentals are going to be tough to come by, but TripAdvisor is still offering properties such as the Calm Waters Desert Oasis home near Palm Springs, Calif. Built in 2007, this $3,200- to $3,800-a-week two-bedroom home features a spa, heated black-bottom pool, a skydeck with views of the mountains and floor-to-ceiling glass walls that give the pool a view of the 50-inch HDTV inside. If that’s too modest, a four-bedroom beachfront estate on California’s Seal Beach is not only available, but has a 90-foot lap pool, Jacuzzi and outdoor bar and barbecue area built into its $6,900- to $9,900-a-week price tag.
If travelers are looking for a less do-it-yourself weekend getaway, they’ll have to do a bit more digging. Members-only vacation site HauteLook Getaways, for example, has rooms at the 52-acre Long Bay Beach Resort and Villas on the island of Tortola in the British Virgin Islands available for less than $300 a night starting July 2. If you’re not so keen on bringing airfare into the discussion this late in the game, Haute Look also has $165-a-night rooms available at the Fontainebleau on Miami Beach starting Sunday. Travelers within driving distance can get its 12 restaurants and lounges, 10 swimming pools and spa treatments without having to break the bank on last-minute fares.
If travelers need things to be just a bit more traditional — and most do, as the National Retail Federation says more than 42% of Americans went out to watch fireworks last year and another 12.2% went to Fourth of July parades — there are still some deals to be had. SniqueAway, a members-only hotel site that’s part of the Expedia(EXPE) TripAdvisor family, has $245 rooms at the Ames Hotel in Boston blocks from all the fireworks, Boston Pops and Lionel Richie on the Charles River and right along the Freedom Trail going for $175. In Philadelphia, where the Fourth of July is expanded to an 11-day celebration of pyrotechnics, The Roots and hoagie eating, $269-a-night rooms at Kimpton’s Hotel Palomar Philadelphia are going for $169.
SniqueAway has slightly more posh and exotic options available, including a stay at the $360-a-night The Inn at Thorn Hill Spa in Jackson, N.H., for $225 and a discount at the Fairmont Hamilton Princess in Bermuda that knocks the starting price of a room down to $235 from $379. Getting a room for around $100 a night on a holiday may be an even greater luxury, which is why an $89-a-night room at the Ace Hotel Swim Club in Palm Springs, Calif., going for $65, a $139 vacancy at the International House Hotel in New Orleans starting at $89 and a $169 place at the Allerton Hotel in Chicago being reduced to $115 aren’t offers to scoff at slightly more than a week from Fourth of July weekend. While the folks behind SniqueAway are glad to tell customers that last-minute deals like these exist, they don’t recommend counting on procrastinator-friendly offerings too often.
“People can still find great deals and affordable getaways for the Fourth, but SniqueAway is not just for last-minute travel — our sales can often be booked months in advance,” says David Krauter, the site’s general manager.
– Written by Jason Notte in Boston.
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NEW YORK – A jet carrying 286 passengers slammed on its brakes and aborted a takeoff this week at Kennedy Airport after another plane began taxiing toward the runway it was using, the Federal Aviation Administration said Wednesday.
Lufthansa Flight 411 was cleared for takeoff and EgyptAir Flight 986 was instructed to stay behind a “hold line,” 250 feet behind the runway, at 6:50 p.m. Monday, said FAA spokeswoman Kathleen Bergen. The EgyptAir crossed the line but did not enter the runway, she said.
“When air traffic control saw that, it canceled the takeoff for Lufthansa,” Bergen said, adding that the Lufthansa plane stopped “a considerable distance” from the EgyptAir jet.
In radio recordings posted on the website LiveATC.net, a controller in the JFK tower is heard giving takeoff clearance to the Lufthansa flight while another controller directs the EgyptAir plane.
“No! Whoa-whoa-whoa-whoa!” shouts someone in the tower as the EgyptAir plane crosses the hold-short line.
“Cancel takeoff! Cancel takeoff plans!” a controller shouts to the Lufthansa jet.
The Lufthansa plane, an Airbus A340, slammed on its brakes and came to a stop. Then it taxied off the runway. The pilot told controllers he was worried his brakes may have overheated, so controllers sent a Port Authority crew to help check the plane’s landing gear.
“That was quite a show. Thought it was going to be a short career,” a pilot who witnessed the aborted takeoff remarked on the radio.
The FAA was looking at “pilot deviation” because the EgyptAir plane, a Boeing 777, didn’t follow air traffic instructions.
“The pilot was instructed to turn onto another taxiway but did not,” Bergen said.
She said the FAA is investigating and will determine how close the two planes came.
EgyptAir officials said they had no knowledge of the close call.
The Lufthansa flight was heading to Munich, airline spokesman Martin Riecken said. After the takeoff was halted, the captain returned to the gate for a maintenance check while the passengers remained on the plane. The fight departed about two hours later, Riecken said.
There were no reports of injuries.
The New York Post reported that the EgyptAir flight was bound for Cairo. It was not immediately known how many people it was carrying. It departed about 90 minutes afterward.
Bergen said investigators will listen to air traffic communications and look at radar replay.
Aviation authorities are increasingly worried about the danger of runway collisions as planes get bigger and airports more congested. In December a JetBlue plane took a wrong turn at Boston’s Logan Airport and nearly taxied onto a runway where another plane was taking off.
The deadliest crash in aviation history was a runway collision. In 1977 a KLM Boeing 747 crashed into a Pan Am 747 on the same runway in Tenerife, in the Canary Islands, killing 583 people.
Associated Press writer Chris Hawley contributed to this report.
LE BOURGET, France – Airbus racked up huge orders for its fuel-saving A320neo jetliner on Wednesday, even bagging the biggest single sale in aviation history, and overshadowing the arrival of Boeing’s much-hyped and much-delayed 787 Dreamliner at the Paris Air Show.
As airlines around the world worry about skyrocketing fuel prices, demand has surged for low-consumption planes.
Airbus’ A320neo, which the company claims is 15 percent more fuel-efficient than rival Boeing’s 737 thanks to an improved engine and modified wingtips, was the undisputed star of the Paris Air Show, the industry’s biggest annual event.
Airbus notched an order for 180 aircraft from Indian low-cost carrier IndiGo, the biggest single order a company has received in terms of planes.
Other orders for the A320neo came from Chilean carrier LAN Airlines and Kuwaiti leasing company ALAFCO, while U.S. carrier Frontier Airlines and Latin American carrier AviancaTaca made commitments for 131 more.
Airbus has now racked up more than 600 orders and commitments for the A320neo since it began marketing the jet last December.
Airbus’ top salesman John Leahy told reporters that orders for the A320neo could top 1,000 by the time the Paris Air Show ends this weekend, providing powerful confirmation of Airbus’ decision to adapt its workhorse A320 to meet airlines’ growing concerns over fuel costs.
The jet’s success also poses a direct challenge to Chicago-based Boeing, which has yet to decide whether to respond with an upgraded 737 itself or to launch an entirely new aircraft.
Indigo ordered 150 of the A320neos and another 30 of the standard A320 single-aisle short and medium haul jets. The firm order follows a memorandum of understanding signed by the two companies in January. Airbus said then that the deal was worth $15.6 billion at list prices, though airlines usually negotiate discounts.
The deal topped the previous record for biggest aircraft order held by China’s Central Aircraft Sales Corp., which ordered 150 aircraft from Airbus and the same number from Boeing in 2005.
Boeing was hoping to draw attention away from the Airbus’ order tally to its wide-bodied 787 jets with a launch order from All Nippon Airways, who will take deliver of the first model as early as August.
At a joint ceremony at the Paris Air Show, the two companies showcased the new plane — known as the Dreamliner — saying it will allow carriers to open up a number of new long-haul routes.
“Its delivery is planned for August or September this year,” said Shuichi Fujimura, vice president of All Nippon Airways, or ANA.
Developmental problems have delayed the new-generation jet’s introduction into passenger service by three years. More than 800 have so far been ordered by over 50 airlines.
Fujimura said ANA expects to receive 14 Dreamliners by next March. ANA has a total of 55 787s on order.
“We have a target to expand our route network, and the 787 will play a significant role in that plan,” said Fujimura, who was speaking at a news conference together with Scott Fancher, Boeing’s 787 program head.
The twin-engine 787 is made mostly of carbon fiber and other composite materials, which make it lighter and therefore more fuel-efficient than other mid-sized airliners. Its twin-aisle passenger cabin accommodates up to 250 passengers.
Because of the 787′s improved range, ANA plans to use it on a number of new long-haul routes that were not previously commercially viable because there were not enough passengers to justify using larger aircraft such as the Boeing 747, Fujimura said.
The plane made its debut at the Paris Air Show when it arrived direct from Seattle late Tuesday.
Airbus’ competitor with the 787, the A350, is scheduled to enter service with Qatar Airways in 2013. Airbus has racked up nearly 600 orders for the new jetliner, which is also mainly made out of carbon-fiber polymers.
Boeing expects to deliver up to 20 787s by the end of this year. By 2013, it plans to achieve a delivery rate of 10 planes a month from its production lines in Everett, Washington, and Charleston, North Carolina.
Greg Keller can be reached at http://twitter.com/Greg_Keller