Travel is turning big in group-buying bargain

BANGALORE: Amitabh Srivastava's holiday package was an accidental discovery online. Srivastava stumbled upon a compelling offer — a 4-day stay at Singapore's Santa Grand hotel at Rs 14,000 per person. The senior VP at Persistent Systems lapped up the deal on Vamoose .in, a travel-focused group-buying site that offers deep discounts to a set number of customers subscribing to the deal."I got a 45% off on the deal. The entire experience was very smooth including the backend delivery,” he said.
Travellers planning their vacation in advance can get heavy discounts in such group deals. It could include other attractions like hotel transfers, concierge services, good bargains on sightseeing and dinners at restaurants that travellers wouldn't have otherwise considered.
"Holiday destinations are high-ticket size deals unlike a spa or restaurant voucher. So we add value on the price and experience. We also back this with our experience internationally and customize it to India,” said Ananya Bubna, MD of Groupon India, the Chicago-based ecommerce portal that acquired group-buying site SoSasta.com in India.
SoSasta, as also India's biggest group-buying site Snapdeal.com, recently started the travel vertical, offering weekend, domestic and international holiday packages. These portals liquidate perishable inventory for hotels , especially when they find it difficult to maintain a healthy occupancy rate. They get new customers as a trade-off for offering steep discounts.
Discounts on holiday packages range from 20-90 % in some cases. Snapdeal currently has on offer a beach vacation for two people at the Bogmallo Beach Resort in Goa for Rs 4,599 per night that is actually worth Rs 7,300. Vamoose is offering a 4-day stay at a 4-star hotel in Hong Kong (with a Disneyland visit) for Rs 17,190; the original price is Rs 26,446. Groupon India has an agreement with Ginger Hotels to offer 70% off on stay at the hotel. Deals can be
redeemed within 3 to 6 months. The sites change their travel selections on a weekly basis.
The travel vertical gives higher margins than the restaurant and spa vouchers that daily deal websites have so far focused on. Many sites feature the same set of vendors but on different days, replicating the same deals. They earn between 10 to 20% as commission on coupon sales. Margins in the business have been shrinking with me-too group-buying sites mushrooming. "They should have a strong differentiator to sustain in the long run. Otherwise we will see consolidation in the space,” said Kiran Gopinath, CEO of internet ad network Ozone Media.
Some of them differentiate themselves from online travel agencies by offering customers focused choices. "We don't tie-up with 200-300 hotels. We zero in on 25-30 hotels and customers can choose from a range of budget to premium properties. The limited choice of hotels gives them greater clarity,” said Manoj Gursahani, MD of Vamoose. Vamoose has extended the redemption period from 6 to 9 months. The site sells 25 deals daily with an average ticket size of Rs 8,000-8 ,500.