The online daily deal market needs to change by Chris Orrell, MD HotelStayUK on 14-May-2012

We've all read the story of Rachel Brown, the owner of Need a Cake bakery in Reading, who underestimated the popularity of a deal placed on a well-known daily-deal site. The offer, which was bought by 8500 people, ended up swallowing a whole years’ worth of profit and nearly put the company out of business. Mrs Brown, who had been running the bakery for 25 years, was quoted as saying the experience was "without a doubt the worst ever business decision I have made".

"The daily deals market must recognise supply and demand issues before growth can be sustained," says Chris Orrell, founder and MD of HotelStayUK.

Whilst the rise (and rise) of daily deal companies has been well-documented, public opinion towards these sites has undoubtedly taken a nose-dive in recent months. And one quick Google search is all it takes to find out why. Complaints from customers who, having purchased a discount, were unable to redeem their voucher at a convenient time, are only one side of the story. The other - experience and product providers who simply cannot keep up with demand created.

"This business model is fundamentally flawed," says Chris. "We have been running since 2003 and the majority of our business and customer relationships have remained unscathed throughout the company’s history. The company’s steady, organic growth can be attributed to an unwavering commitment to one basic principle – supply must meet demand."

"For a business to be sustainable, you need to keep both customers and suppliers happy. Although our new consumer website HotelExclusives.com offers daily deals, these deals are based on relationships with hotels we’ve build up over the past nine years. This means that we know exactly what our partners can afford to offer and, as we offer as a closed member group, we can give the hotels an accurate estimation of how these offers will be received. This means that we avoid any nasty surprises once the discount goes live."

"All too often, customers who buy discounted vouchers for hotel stays will call up the hotel only to find that the voucher they’ve purchased can’t be redeemed against any convenient dates – this almost always means time and/or money is wasted. It leaves a bad taste in the mouths of both customer and hotel staff, who are forced to frantically deal with unprecedented demand and the complaints that inevitably follow it."

"Unlike our competitors, all the offers on hotelexclusives.com are date-controlled. This means that customers get exactly what they pay for, when they want it. Our customers trust us to deliver what we say we will and this trust leads to repeat custom. It’s a model I’ve built all my hotel discount offerings around and one that I know leads to truly sustainable growth."

For more information, please visit: hotelexclusives.com

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