Written by Guy Besley, Latitude Travel Services,
Group buying sites have absolutely FLOODED the travel market. Is this a good thing? and who for?
Well, yes of course its a good thing because it gives an opportunity for astute property marketers to off load stock at a traditionally quiet period, it gives them cash in their pocket within 14 days (generally) to assist with cash flow and it gives the consumer a super super cheap rate (always a lot lower than the last minute rates). Oh, of course the real winners are the group buying sites; or are they?
Group buying sites now number about 200 in Australia alone. My motivation for this post was due to Groupon Inc. the founder of the group buying fad, they reported in the States over night. Of course their profit was solidly lower than market expectations, but what is most interesting is in the last 12 months the share price of Groupon has fallen from a high of over $25.00 to $3.90 (as of yesterday), that’s nearly 85% of its value wiped in 12 months. So why is that? Isn’t the idea a ripper (in theory, yes). Like I said above, everyone is a winner right? WRONG! They have killed their own market, while also hurting tourism (like it needs more hurt) along the way.
Why? Saturation! simple! It has been so over done that the consumer no longer absorbs any of the content that is being, eamiled, posted, blogged and shared. All the customer will see is yet another supposed special deal for travel. So not only is the tourism industry going to start feeling the pinch from this latest attack (I don’t really mean to make it sound negative, but it was the only word that came to mind) but all Internet marketers in Digital Media are feeling the pinch of this.
All of a sudden the majority of online content that is trying to sell has lost value and credidibility because of this total over saturation. The idea of a great “online special offer’ is no longer special; because there is sure to be another one from a different group buying site in the next few hours.
Although I will say Facebook are doing OK out of this; it appears the best way to promote these deals easily is via a Facebook Promotion (which of course costs money). As an example of this at work; about 12 months ago we ran a competition via a Facebook Promo, it had 1.9 million reach and 55,000 claims! A month ago we ran another competition (with a higher value prize incidentally) it has been alive now for nearly a month and has ONLY 200 claims, and that is with a paid promo as well. Oh yea, the last one only ran for 3 days….
So simple, over saturation has made travel product no longer special. So whats the answer? Sorry, don’t have that, it will just have to run its course.
BUT I tell you what scares me the most about this, I absolutely guarantee that very soon one or more of these business will fold, and when they do the providers of product will be left with the baby. No doubt about that unfortunately.