It's so rare to see something new in online travel. Expedia's Add-On Advantage appears to be a new wrinkle, and HotelTonight's Today's Daily Drop is a flash sale variation that disappears within 15 minutes. Both gives hoteliers new ways to target travelers, who may find some good deals in the process.
Suddenly there is a flurry of innovation — or at least ample twists on traditional practices — when it comes to the ways online travel players are delivering price-hidden, or opaque, hotel deals to consumers.
HotelTonight announced on Tuesday the global launch of Today’s Daily Drop, which offers users once daily — and for 15 minutes only — a discounted hotel stay for an initially unknown amount. Users have to swipe within the app to unlock the deal, and if they don’t book it within the 15 minutes, with a clock clicking down toward zero, then the deal is gone.
After that window closes, the only choice from HotelTonight is to book another regularly priced property, or wait for another Daily Drop to appear for 15 minutes the following day.
HotelTonight co-founder and CEO Sam Shank characterized Today’s Daily Drop as “our reinvention of opaque deals for a mobile era.” Traditionally, sites such as Hotwire that offer opaque hotel deals show the price, star rating, and neighborhood, but the guest only finds out the identity of the hotel after booking. The deals are available until inventory runs out, and there is usually no extreme such as 15 minutes to book or lose the deal.
To test this, Skift opened the HotelTonight app Tuesday morning in New York City and saw Today’s Daily Drop for “$???” atop its hotel listings. Swiping to view the deal revealed a $133 rate for a stay Tuesday night at the Lord & Moris property in Times Square. It supposedly regularly sells on HotelTonight for $215.
The deal enabled the property to offer a discounted rate without publicizing it to the world because its website was offering two bunk beds for $219 or a king bed for $239 (room types provided through HotelTonight are at the discretion of the property).
The total rate through HotelTonight, including taxes and fees, was $170, which was a bargain compared with the lowest published rate, $209.57 including taxes and fees, for the Lord & Moris the same evening from Hotels.com.
The HotelTonight app also allowed the addition of a second night for a base rate of $108.
Shank said that although the Daily Drop must be booked within 15 minutes, the stay can take place anytime within a 100-day window. He said some 1,000 properties are participating in Today’s Daily Drop, and they get personalized for the user according to previous booking patterns and preferences.
The user may feel “a mini endorphin rush” to book the deal before it disappears, Shank said.
Expedia’s Add-On Advantage
It’s rare that you find something new in online travel. Online travel agencies such as Expedia and Priceline have been offering dynamic packages — vacation bookings where users can choose flights and tack on hotel bookings for one package price, disguising any discounts — for decades.
But Expedia’s Add-On Advantage is offering a new wrinkle. Customers who book a flight, car, or vacation package can add a discounted hotel stay at any time “until the day of your trip,” Expedia says. That’s valuable for travelers who might have been indecisive about the details of their trip at the initial time of booking, saw their plans change, or just wanted to expand their trip plans by tacking on a discounted deal.
The hotels and rates are only visible to Expedia customers who have already booked a flight, car, or vacation package, and the hotels stays come with discounts up to 43 percent, Expedia says. So, as with HotelTonight’s Daily Drop, hotels participating in Expedia’s Add-On Advantage have a fenced-off area to offer travelers discounted rates without revealing that they are unloading rooms at lower prices in a sort of fire sale.
Expedia claims that travelers in 2017 saved a collective $39.4 million by booking a flight and then adding a hotel, thereby creating a vacation package, as opposed to booking the components separately.
Expedia Group CEO Mark Okerstrom addressed Add-On Advantage during the company’s second quarter earnings call Thursday, saying the early results were “very solid.”
“We’re seeing higher customer attach rates and higher room night growth than we otherwise would have seen,” Okerstrom said. “So we think that it is at least in part incremental. But it’s really hard for us to get conclusive on that. What we do know … it’s a highly differentiated product.”
Okerstrom argued that hotel participants see value in Add-On Advantage in that the program is “incredibly targetable.”
“And this gives our hotels the ability to, in a very specifically fenced way, to target customers, not out in the open, but to target customers that we know are going to a certain place with a special deal,” he said. “And so the hotels that participate, which is the vast majority of them, I think are finding it to be a great program, just like they have our traditional package program.”
Hotels like those fences, or anonymity, when offering discounts, and HotelTonight and Expedia are finding new ways of delivering these offers.
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Photo credit: HotelTonight launched Today's Daily Drop, enabling travelers to access a discounted hotel deal for 15 minutes once per day. Pictured is a HotelTonight ad outside Madison Square Garden in Manhattan. HotelTonight