Hotel Daily Deals: A Revenue Management Perspective

Purpose—Daily deals (DDs) form part of the current hotel e-distribution landscape and revenue management tools, yet academia and practitioners lack an understanding of their proper use. This study explores DDs through a revenue management lens and outlines the key aspects for successful revenue optimisation through DDs. Methodology/Design/Approach – Using a combination of grounded theory and case study research strategies, the paper qualitatively explores the reasons behind the use of DDs, and maps out how, why, and when they can be used while generating examples from a comparative case study of Wales and Slovenia. Findings – The paper highlights the strategic use of DDs to achieve multiple goals, e.g. boosting occupancy, covering fixed costs and attracting new customers. The paper finds that the hotel managers’ perceptions of success depend upon the goals originally set out and the type of DD websites used. Additionally, DDs are valued for supporting occupancy and/ or value-led sales, by a mix of advance and last-minute selling tactics, especially from the perspective of generating, or safeguarding overall revenue. Lastly, the paper identifies that performance monitoring and success of the DDs use is measured with a combination of revenue and non-revenue factors. Originality of the research – This is the first to study the use of daily deals in a cross-country, European context. It used the lens of revenue management to investigate engagement, effectiveness and evaluation processes of daily deals for hotels in Slovenia and Wales.