College prof probes hotel sales techniques

Katerina Berezina, an assistant professor of hospitality management at the University of South Florida Sarasota Manatee, is analyzing the impacts of hotel flash sales.

According to a statement, Berezina will investigate whether flash sales, defined as time-limited deep discounts on bookings, can really help drive revenue at hotels. Berezina is looking into the revenue impact of discount sales through sites like Groupon or Jetsetter. In one study Berezina, over a year, interviewed 46 hotel managers at lodgings ranging from small independents to branded hotels and large hotel management companies

Berezina has drawn two main conclusions so far: Heavily discounted rooms are preferable to empty rooms, and flash sale customers spend equally as much, if not more, than regular customers.

Hotel managers cited seasonality as the primary reason for turning to flash sales, the statement says. After advertising expenses and commissions paid to the broker sites, flash sale rooms may generate one quarter of their usual booking revenue.

“Managers from different segments of the hotel industry suggested that flash sales may be an effective tool to increase a hotel's exposure, raise brand awareness, sell distressed inventory and, therefore, lift up occupancy levels during difficult times,” Berezina says. “Those managers who have participated in hotel flash sales also warned the industry about the need to carefully design the deals and being mindful about the deep discounts and commissions.”