Expedia has added a Groupon Getaways tab to its website as part of its partnership with the flash-sale website. The tab allows Expedia users to tap into the Groupon voucher model, which allows travelers to book a hotel room or package at a rate that is sometimes up to 50 percent off and then travel when they want. The move comes more than seven months after Expedia announced a partnership with Groupon in July 2011.
With Groupon Getaways, users sign up after clicking on the tab and then Groupon emails them hotel, flight and car deals once a week. Consumers choose the trip they want and then redeem it when they’re ready to travel. Expedia’s Groupon Getaways tab debuted with such Valentine’s Day specials as a stay at the Westport Inn, an Ascend Collection Hotel in Westport, Ct., for one night at $89 and a bottle of Champagne, a 50 percent discount, for travel by May 24, 2012. Also featured was a two-night stay at the Oasis Suites in Nags Head, N.C., for $209 (normally a $471 value), for travel through March 31, 2012.
Some observers have suggested that Groupon may eventually seek out additional travel partners beyond Expedia in order to expand Groupon Getaways, including cutting deals with suppliers directly. They also say Expedia is taking a chance by promoting a brand on its website other than its own. Indeed, Expedia already has its own “deals” feature, Expedia Last-Minute Deals, which it launched in January. With Last-Minute Deals, Expedia posts the best deals found by other travelers anonymously for flights and hotel rooms based on the customer’s location for three time periods. So it would appear on its face to be competing with the Groupon Getaways tab on its own website.
For its part, Expedia Inc. last week reported that its fourth quarter profit declined slightly from last year, as higher costs and expenses offset a 7 percent increase in revenue. It reported net income for the fourth quarter of $70.3 million compared to $71.3 million for the same quarter last year. Income from continuing operations for the fourth quarter was $59.7 million compared to $63.4 million for fourth quarter 2011. Gross bookings for the fourth quarter increased 10 percent from a year earlier, mainly driven by 19 percent growth in hotel room nights at Hotels.com brands, Expedia Affiliate Network, Hotwire and Egencia. Hotel accounted for 73 percent of total worldwide revenue in the fourth quarter, while air accounted for 9 percent and all other revenue sources accounted for the remaining 18 percent.
Meanwhile, Groupon, which went public in November 2012, last week reported a net loss of $42.7 million for its fiscal fourth quarter, narrowing from a net loss of $378.6 million in the fourth quarter of 2010, but disappointing Wall Street analysts’ expectations that the company would post a profit. On the other hand, Groupon's revenue of $506.5 million in the fourth quarter, nearly triple the $172.2 million in the year-earlier period, beat analysts’ expectations. Groupon uses social media to move products as well as draw an audience. Other leading flash sale sites offering travel products include JetSetter.com, LivingSocial.com, RueLaLa.com and TripAlertz.com. But whether the marriage of a traditional OTA and a flash sale website can work remains to be seen.