Travel in your inbox: What to watch for with flash sales

By Stephanie Oswald, Special to CNNPublished 18th November 2011
Booking travel through flash sales can yield great savings if you check the fine print.
A quick scroll through the mail on my smartphone yields attractive offers to stay at a Victorian estate on the California coast, check in at a chic New York boutique hotel for less than $125 per night or escape to Tanzania for a six-night safari.
Those are just a few of that day's flash-sale deals. Programs that started out e-mailing daily discounts on tooth whitening and kids' art classes have shifted into the bigger arena of travel, and they've captured consumer attention.
The discounts can be heavy, but the deals are very specific and require immediate payment for travel to happen at a later date. Flash sales can disappear within hours or days and usually have some strings attached. But shop carefully, and you may score a great travel experience.
The pros: Infinite options
The parade of websites competing for your time, opinions and travel dollars just keeps growing, and daily flash-sale deals have become a standard feature on major travel sites. The kings of online booking, Expedia, Orbitz and Travelocity, all experimented with flash sales this year.
Bringing the trend even more mainstream, e-commerce giants such as Groupon and LivingSocial now make it easier than ever to quench travel bargain thirst. In the current travel landscape, with a few clicks, the deals begin to swarm.
The limited-time-only travel deal has been around for a while. Jetsetter.com launched in September 2009, setting the bar as a flash-sale website selling upscale travel experiences at exclusive prices, with dates booked at the time of purchase.
Two years later, flash sales are only one part of a much larger travel picture for the Jetsetter crowd, who generally opt for high-end, customized experiences. Despite the lagging economy, Jetsetter reports a revenue growth of 100% over the past year.
Meanwhile, group coupon programs targeted at cost-conscious consumers with smaller budgets have flooded the field of travel flash sales.
LivingSocial just celebrated one year of its Escapes program, an offshoot of the Daily Deals service it started in July 2009. And the deals are reaching a huge audience. Whereas Jetsetter has 2 million members, LivingSocial has 50 million.
"We're sending out inspiration every week," said Doug Miller, senior vice president of new initiatives at LivingSocial. For Miller, the thrill is in creating demand rather than responding to it.
"Seventy percent of the people who buy from us tell us that they had no intention of traveling," he says. The Escapes program sells non-time-specific vouchers, and in a year, nearly 600,000 room nights have been sold.
LivingSocial says its success comes from providing a handcrafted overall travel experience, not just an inexpensive place to lay your head. Fueled by rising occupancy rates and flourishing social media, Miller says, the business will grow into more exotic destinations and continue to focus on creating liaisons between its travel partners and the public.
"We are getting out there and telling the story of properties. And that's very different than being in a line listing on hotels.com," he said.
Expedia jumped on the flash-sale bandwagon on multiple platforms this year. Expedia ASAP (A Sudden Amazing Price) launched in February with two deals every weekday, available for a 12-hour period. The company says the "amazing" prices are 50% or more off regular rates. As with Jetsetter, these offers require immediate booking.
The company doesn't share sales numbers, but here's an indication that it's profitable: This month, Expedia ramped it up and is now offering up to 10 ASAP deals per day.
Expedia also partnered with Groupon to yield Groupon Getaways with Expedia. Those flash sales launched in July and follow Groupon's established model (started in November 2008) in which customers purchase a voucher for a date to be determined.
Jon Guljord, senior director for Expedia.com, says each program has unique appeal in that some travelers prefer immediate confirmed bookings while more "opportunistic" customers would rather choose dates later.
"ASAP customers are probably like a friend of mine in college who said, 'Jon, I plan time to be spontaneous,' whereas Groupon Getaways with Expedia customers are probably more like a friend I backpacked through Europe with who didn't care that we didn't have a place to stay in Barcelona until we got off the train."
The cons: Buyer beware
Critics support the adage "the devil is in the details" and say flash sales can fail when it comes to expectations.
"There's a big disconnect between what consumers think they're buying and what the hotels think that they're selling," said Rocky Agrawal, a principal analyst at reDesign Mobile.
Agrawal bases his claim on personal experience. A savvy traveler who generally stays in four-star hotels, he says he was treated like a second-class citizen when he called to book a room at one popular Santa Monica hotel. All was well until he mentioned that he was using a Groupon.
"Sorry, we don't have rooms available for Groupon customers that weekend," he says he was told. Agrawal found another hotel for that trip but still hopes to use the voucher.
"I certainly wouldn't book your air travel before you've confirmed your hotel reservation if you're planning to use a Groupon or a LivingSocial voucher," he said.
When it comes to hotel rooms, availability comes in many forms. Just because there's an empty room doesn't mean your discount voucher will get your head in that bed. On any given night, properties have a select number of rooms available at the lowest-tier rate. Once those rooms are booked, the next pricing level applies.
When flash-sale shopping, read the small print.
Vivienne Chapleo, co-founder of the online magazine WAVEJourney.com, is a fan of flash sales, with a few caveats.
"Most important, know the date the deal expires. Find out if there are extra charges such as taxes, resort fees and other mandatory surcharges that may be added upon arrival," she said.
And here's a news flash: You don't always need a flash-sale website to get the deal.
"You really have to comparison shop," Agrawal said. "Just because it's advertised on a flash-sale site and they say it's 50 or 75% off doesn't mean that's the reality. I very often find that if I go to the hotel's website directly, I'll get as good or better pricing than what was on the flash-sale site."
Being lured by inflated savings is another potential trap for deal-hungry consumers.
"One of the common tricks is to throw in a bunch of things that people might not necessarily use or discounts on bigger purchases to inflate the kind of discount that you're getting," Agrawal said.
"For example, you'll get a $25 spa certificate. Well, that's not really worth $25, because you have to spend $100 to use it. But they'll include that in the calculation of how much you are 'saving.' "
The value of perks such as valet parking or breakfast can be exaggerated. So before you start typing in your credit card number, conduct a reality check on the bargain at hand. If your calculations show that it's still an attractive deal, go for it.
The ultimate impact
Guljord says the flash-sale phenomenon is about new choices, not a new type of traveler.
"I wouldn't say some kind of Darwinian evolution is going on with travelers. Man has been traveling ever since man walked upright. Rather, I'd say travelers just have new and better ways to travel more with less."
The deals are more about filling a need, Chapleo said, "for hotels to have better occupancy rates and keep employees working and for consumers to see their hard-earned dollars stretch further in difficult economic times."