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In A Flash

Apr 7

Written by:
4/7/2010  RssIcon

What is a flash sale?

The answer is a time dated offer that arrives unexpectedly and requires an immediate response to book the featured promotional fare or rate. For example, the email may announce a "12- hour" fare sale on selected routes flown by an airline. Alternatively, it might announce 50% off the entire room inventory at a featured hotel or resort over a forthcoming weekend. In either event, the offer is: 1) generally restricted to individuals with whom the travel service supplier has an established relationship (e.g., member of a frequent flyer or frequent guest program), 2) one that features a compelling discount and/or premium, and 3) one that may only be booked if acted upon within the stated time frame.

Flash selling emerged as a low-cost alternative to other forms of business development used by a growing number of travel service suppliers during the depth of the Great Recession. Not surprisingly, the technique is controversial because it may compromise rate integrity, not to mention raising the ire of meeting planners and/or clients who may be bound contractually to pay higher fares/rates. Nevertheless, the decision about whether or not to launch a flash sale frequently boils down to the expected incremental income, even if the calculation contemplates the cost of alienating some existing customers/clients along the way.

Do flash sales work?

According to the results of our soon-to-be released 2010 Portrait Of American TravelersSM:

  • Almost three out of ten (27%) active travelers took at least one "last minute" leisure trip last year;
  • One out seven (14%) purchased a travel service as a result of receiving an unexpected email from a travel service supplier;
  • Almost half (47%) of those who purchased a travel service as a result of receiving an unexpected email booked an airfare and/or lodging, while fully four out of ten (38%) purchased a complete vacation package, and one out of five booked either a cruise or car rental.

Millennials and GenXers appear to be more responsive to these unexpected offers than their older counterparts. And it is interesting to note that affluent travelers (annual HHI >$125K) appear to be more responsive to such offers than households with more modest incomes as revealed below:

 

AGE

INCOME

All

18-30

31-44

45-63

64+

$50-$124k

>$125k

Ever purchased a travel service as a result of receiving an unexpected email from a travel service supplier that required an immediate response to book the featured price or offer.

14%

17%

18%

13%

7%

14%

21%

 

 

AGE

INCOME

All

18-30

31-44

45-63

64+

$50-$124k

>$125k

Travel service purchased as a result of receiving the unexpected email:

 

 

Airline Ticket

47%

52%

42%

50%

33%

46%

50%

Hotel/Lodging

47%

57%

57%

38%

30%

47%

47%

Vacation Package

38%

50%

39%

34%

16%

37%

41%

Cruise

21%

29%

17%

21%

37%

20%

29%

Car Rental

20%

25%

24%

16%

0%

19%

20%

Whether or not "flash selling" will become a standard component of future travel service marketing programs remains the source of considerable speculation, particularly as demand for travel services continues to improve. Nevertheless, the appeal of the technique in the current market environment is evident.

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