Groupon and Expedia Team Up For Groupon Getaways

Travel is the new fashion, it seems, judging by the number of websites jumping into the space lately. Today Groupon became the latest site to strike out into the discounted travel space with Groupon Getaways (a partnership with Expedia).

After Gilt and Hautelook demonstrated near immediate success with the daily fashion sale model, it seemed a new company following the exact same model appeared every week faster than you could say 70% off. Gilt was the first of those sites to bring travel deals into the mix with their Jetsetter website; but today there’s the American Express backed Vacationist and Exclusively.in (a Gilt style site targeted towards Indian fashion and design), who recently expanded to include Asian focused travel deals.

Unlike fashion, there’s no Vente Privee (who American Express also recently partnered with) – that is an established behemoth who’s been making money off the model for a while. That’s the good news, now the critical look.

While startups like Airbnb are having success as an un-hotel travel coordinator for the value conscious, we do have to wonder if discount travel will eventually run into some of the same issues of discount fashion: luxury fashion sales bounced back, brands got smarter about manufacturing which means less inventory to discount in the first place and a focus on full priced sales. Make no mistake, while Gilt and others continue to do brisk business in discounted apparel, the leading US flash retailer is looking for growth in retail at regular price.

According to Pegasus, a hotel reservation system provider used by 90,000 hotels around the world, hotels in the US and around the world are seeing growth in spite of regional crises.

“March global bookings and revenue reached the second highest growth pace over the last twelve month period, increasing by +10.8% and +15.5%, respectively, over prior year.” {the Pegasus View March 2011}

While we have no doubt that Groupon’s massive audience will buy into the travel deals, and those seeking travel deals will buy into Groupon’s regular offerings, we wonder how long it will be before the same discounted dates are bouncing around on the various sites. What’s wrong with that? Limited inventory plus three different options for filling it means that the discounts may get to be less attractive over time.

The one advantage Groupon may have though is their international reach. Groupon Getwaways is starting in the US, then Canada with an international rollout after that. Unlike fashion, in addition to there not being a clear behemoth there aren’t any sites outside the US who’ve successfully developed travel flash sales.

 






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