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The Gay Traveler: Flash Sales Take On The Hotel Industry

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Few things are just plain fact: A Republican president will never openly support gay marriage, Ryan Gosling was clearly robbed of his Sexiest Man Alive title and the gay community loves to spend money. And in these still conservative economic times, our money, dubbed "the pink dollar," is becoming gladly accepted the world over. But a recession is still a recession, and even the fabulous among us like to find a deal, particularly when it comes to our travel plans. Enter the latest fad among flash sale sites: The luxury hotel package.

Online booking sites like Priceline.com and Hotwire.com have been helping hotels fill empty rooms at steep discounts for years now. But with recessionary times, come recessionary opportunities to take advantage of consumer's penny pinching desires, and a rash of companies are jumping in the game, from big names like Living Social (Living Social Escapes) and Overstock (Overstock Vacations) to new upstart contenders like Jetsetter.com, Yuupon.com, and Itiniere.com. In the later part of last year Groupon, the mother of all group-buying sites, teamed with Expedia to start Groupon Getaways, while the travel review behemoth TripAdvisor is leveraging its vast connection with hotels to offer members-only deals on its top rated destinations through its new venture Sniqueaway.com.

So how do these sites work?

Unless you've been stuck with dial up for the past several years, the model for group buying is, by now, pretty familiar to most consumers. For hotel packages it isn't much different. A room rate is offered at a certain discount, typically between 30 and 75% off the standard rate. A package is often included in the deal: a room upgrade, free meals with your stay, discounts on spa services, free parking, etc. The sale goes for a limited time, and usually once your purchase has gone through they are non-refundable.

For all of the sites you must sign up or become a member to receive alerts and be able to partake in the sales, and for some sites exclusivity is one of the main selling points. Jetsetter, for example, has to approve your membership, or you can be invited to join by a friend who is already a member. Once you get past the velvet rope, even if you don't partake in one of their flash sales, you can search for trip packages based around different interests, activities or locations, still offered at an exclusive discount.

So will this model be the new industry standard for hotels to fill their rooms?

Many industry insiders are skeptical. For one, they say it can be a bad move for hotels to rely on flash sales sites to fill their vacancies. The economics of the model just don't work out. Mark Starkov, President & CEO of HeBS Digital, a full-service digital marketing firm for the hospitality industry, points out that one problem is that on flash sales sites, the discount rate is displayed for the customer, which can lead to serious price and brand erosion. The idea that you're willing to discount your product so steeply doesn't necessarily jive if you're billing your hotel as super-luxe.

Also, this lack of opaqueness in pricing sets an impossibly low price standard. Once a customer has paid the discounted rate for a hotel room or package, they most likely will not be willing to pay the standard price on a return visit. And quite simply, discounts of up to 50% off or more are not viable in any sort of market where profits need to be made.

But does it build a loyal customer base for your hotel? That's a common misconception, according to Starkov. "Flash sales site users," he says, "are loyal only to the 50% off rack rate" religion, not even to each individual site. These customers would have never stayed at your hotel if it weren't for the promotion and would never repeat their purchase at the hotel rack rate.

There is also a consensus among industry vets that these flash sale sites are simply a recessionary phenomenon. There is nothing unique about the open discount business model they use or the technology they employ. Looking at a list of new sites published by USA Today seems to show that most of the sites around today started up after 2008, when the economy took its first -- and hardest -- turn in decades.

So is it still a good deal?

It's hard to say if these sites will be around forever. Fingers crossed that eventually our economy will right itself again -- and soon -- and maybe then people will be willing to lavishly spend on their travel again. But while the idea of the flash sale for hotel packages may not seem like best practices for the industry, it's still an attractive alternative for travelers who are looking to hit the road without breaking the bank, and still have a fabulous vacation.

While the major travel sites don't seem to specifically or exclusively cater to the gay community (potential niche!), it is quite easy to find some of our favorite destinations at pretty reasonable discounts. So search around, and if you find a deal that piques your interest, happy trails!

Here are but a few examples:
  • Palm Springs, Calif.: a two-night stay for two in a pool-side King or Queen room at the Alcozar Palm Spring for $125 (a 51% discount) on Groupon Getaways.com.
  • Puerto Vallarta, Mexico: a three-, five- or seven-night stay for two in a Superior room at the Fiesta Americana Puerto Vallarta (a 50% discount), with 50% off of resort spa treatments and drinks at the on-site bar from LivingSocial Escapes.
  • Chicago: A King Deluxe room at the Hotel Monaco on the Magnificent Mile for $99/night (regularly $149) on Sniqueaway.com.

Looking to fly your rainbow flag abroad? Here are some tips on following the pink road to foreign destinations.

In a time of roller coaster economies, skyrocketing unemployment rates and timid consumer spending habits, one bright area of consistency has shone through, the spending habits of the gay community, or the "pink dollar."

Even in recession, with the consistently steady "pink travel dollar," everyone likes to find a deal. But is the new fad of the flash sale good for the industry as a whole? Is it here to stay?