Hospitable or Hostile? The Impact of Daily Deals in the Hotel Sector of the Hospitality Industry

Abstract

Daily deal promotions have been widely adopted by the hospitality industry and although academic interest is growing there is still a lack of hospitality based academic research of this phenomenon. The current literature suggests that there are three stakeholders of daily deal promotions: the website, the merchants and the customers. However, from a hospitality perspective, provision and receipt of services heavily relies on the employee as the influencing factor of customers’ perceptions of service quality and satisfaction. Despite this, only a very small number of studies noted the importance of the employees within the delivery of daily deal promotions. In those studies the employees were never the focus and the findings were based upon the managers’ impressions of the impacts the promotions had on their employees, rather than the employees’ views themselves. Therefore, the purpose of this study is to provide an in-depth, holistic multi-stakeholder view of the impact of daily deal promotions upon manager, customer and employee stakeholder groups. Based on a qualitative method design and constructionist worldview, the study adopted a hermeneutic spiral approach where with each turn of the spiral new construction of knowledge emerged, leading to a construction of a holistic perspective. With this in mind the data collection was split into three phases, each dealing with one stakeholder group, where the findings from previous phase were built upon the following phase of the study. Purposeful, typical case, criterion, snowballing and convenience sampling techniques were used for the purpose of this study, resulting in a total of 34 semi structured interviews, across three stakeholder groups. All data were thematically analysed. The study revealed that daily deals are an effective marketing tool, which if planned and executed correctly can expose small and medium hotels to wider audiences of customers, increasing customer numbers in the off-season, generating profit and providing word of mouth advertising. The results also suggest that there are six ways of defining a successful promotion and that success of the promotion is not always synonymous with profit. The third contribution of this study identified employees as vital stakeholders of daily deal promotions, with staff across front office, housekeeping as well as food and beverage departments being affected by the promotions. The study revealed thirteen pressure points which can result in staff being unable or unwilling to provide high quality service. The study identified that daily deal customers treat the discount received as a trade-off against some failures of service expected; however some service issues could not be excused, such as hygiene factors. From the industry perspective this is the first study that identified hotel staff as vital stakeholders of daily deal promotions. It contributed to both practical and theoretical knowledge by developing a five stage daily deal management model, which would enable daily deal promotions to be better understood and therefore designed, implemented and reviewed. The study also considered a number of recommendations, limitations and future research opportunities.