American Express Enters the Private Sale Travel Market with Vacationist

American Express became the latest company to enter the private sale market this week. Vacationist, a site launched in partnership with Luxury Link, offers 25 to 40% off of published room rates alongside profiles from Travel + Leisure (an American Express publication) editors. {the Independent}

In fashion the private sale space is pretty crowded, with companies like Gilt, Rue La La, Hautelook and Ideeli among many others prompting questions about the sustainability of the luxury sample sale model past a certain point. Even though most of the sites have offered household items and other non-fashion sales, Gilt was one of the first to establish separate destination sites for different markets. Gilt Fuse offered a destination for mass market brands, Gilt Man split off the guy focused offerings and Jetsetter became the first site to apply the online private sale model solely to travel.

The move was seen as a smart one for a way to increase revenue amid concerns over limited quantities of unsold designer goods. Vacationist only marks the second site to focus on the travel market – compare that to more than 10 sites who battle it out for unsold apparel, but we have to wonder if the same issues will come into play.

The recession hit almost every consumer sector, and hotel bookings sank in line with consumer demand, so many hoteliers were willing to offer discounts to fill empty rooms. Though the economy is still not completely out of the woods, there have been signs of spending in some areas picking up. Starwood Hotels, the group that operates 4 and 5 star hotel chains like W, Sheraton, Le Meridien and St. Regis, reports a pickup in occupancy rates for the first quarter of the year and rates beginning to rise this month. {Reuters}

Expedia has also reported an increase in worldwide hotel revenue, even though the per room rates are down 5%. {WSJ} Though bookings may have been helped by discounts, special promotions and other offers to fill more rooms, once occupancy begins to increase it’s not a stretch to assume that hotels will offer less substantial discounts as they try to return to more solid growth.

Unlike clothing, where a designer can use lower cost fabrics and less costly detailing to bring prices down for discount collections, hotels don’t have the same options. Sure, they can take away the continental breakfast that comes with a rack rate or charge extra for amenities based on the rate type, but the person who cleans the rooms are paid the same regardless of if you’ve booked at full price or a discount and many other operating expenses stay the same.

So while the discounts on sites like Jetsetter, Vacationist, or even old favorites like Priceline and Hotwire will still be there, as things get back to normal don’t count on them being as deep or available as often.

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