Gerald Annable had to think quickly when he found an ad for a 12-day Holland America cruise of Italy, the Greek Islands and Turkey. The special rate, $1,559 per person, could be his if he acted now, according to his travel agent.
“They told us it was a ‘flash’ sale, and they said we had to book on that day. They told us we had to pay for the cruise in full that day.”
Annable forked over the money promptly — a total of $3,738 for him and his wife, Judith. But that evening, he discovered another ad for the same cruise and the same cabin class. The price: $1,399 per person.
He asked his agent whether Holland America would honor the lower rate, but the cruise line declined. That’s how Annable discovered the problem with “flash” sales: Although the deals are often good, additional restrictions often apply, and the price you get might not be the lowest available. The only real beneficiary is the travel company offering the sale.
Are the discounts worth the hype?
A recent study estimated that flash sales, which offer discounted inventory for a limited time, accounted for more than $2 billion in annual sales, although the exact numbers are unknown. But the discounts might not be as generous as advertised: The fine print may render some unusable, and companies may bend a few facts to encourage you to buy.
A deadline-focused sales pitch can yield immediate results for a company. Robert Kissell Jr. is a marketing specialist for Southern Shores Realty, a vacation rental company on the Outer Banks of North Carolina. On Black Friday, his company held a flash sale to “turn the heat up” on prospective customers, offering a wide selection of rentals with inventory even on hard-to-get weekends and holidays, such as the Fourth of July.
“The results were incredible,” Kissell says. “Southern Shores Realty boosted revenue by more than 200 percent, and our revenue per booking was up 16 percent,” which Kissell said he found hard to believe.
It isn’t. A recent survey by the hotel flash sale Web site EveryLodge.com suggests that the average flash-sale discount is about 39 percent. Although the actual discount is probably about 10 percentage points less than that, because hotels mark the price down from so-called “rack” rates that customers rarely pay, it’s still a deal.
Mastering the art of flash sales
But there’s a right way and a wrong way to entice customers into making a fast purchase decision, said Marlene Towns, a marketing professor at Georgetown University’s McDonough School of Business.
Generally, travelers know what they’re getting when they buy a vacation package or a hotel room via a flash sale, she says. They’re booking hotel rooms or event tickets at an aggressive markdown, with little or no chance of a refund.
“With airlines, it seems trickier,” Towns adds. “There are hefty change fees if the purchase is refundable at all, so there is real pressure to make the correct purchase decision. If there is fine print, it discourages consumers from becoming informed and limits their ability to gain full disclosure.”
Confusing verbiage isn’t limited to airlines, of course. The Lansdowne Resort in Leesburg, Va., discovered that keeping the fine print to a minimum on its limited-time offers is key to a successful — and complaint-free — flash sale, said Patrick Matheson, the hotel’s director of revenue optimization. “It’s best to keep the offer simple regarding availability terms and the inclusions of the sale,” he says.
Excessive fine print may be a sign of trouble, experts say. But travelers are also turned off by come-ons that force them to push the “buy” button now. These can include ticking clocks, countdown timers or notifications that there are “only” one or two of the desired items left for sale.
Deciphering the fine print
“These are, by definition, cheap sales gimmicks attempting to use the power of time to the advantage of the seller and manipulate the buyer,” says Marvin Gerr, a retired marketing executive from Tigard, Ore., and a frequent traveler. “Any intelligent buyer will look at any offer and decide not to play the game by the seller’s rules.”
The takeaway? Time-limited offers in travel can be a good opportunity, but not always. They benefit the companies but not necessarily their customers. Responsible flash sales avoid ticking sales clocks and onerous terms. Don’t let yourself be pressured.
Annable is unhappy that neither Holland America nor his travel agent could adjust his fare. After all, even airlines allow a 24-hour grace period for cancellations. I contacted Holland America on his behalf. “A representative said that they reviewed his records and found that they had advised Annable of the restrictions on his fare before he booked his vacation.” (Here’s our guide to finding a travel advisor.)
Erik Elvejord, a spokesman for the cruise line, said they review the cancellation schedule associated with the promotion at the time of booking and deposit. As a gesture of goodwill, Holland America offered Annable a cabin upgrade. (Related: A travel agency was fined $200,000 for falsely advertising “free” flights with Sandals vacations.)
Incidentally, Holland America is right. The terms of its flash sales, disclosed on its Web site, are clear: “Flash fares are non-refundable and full payment is due within 24 hours,” it warns in the fine print. Also: “Restrictions may apply.”
“I think we were treated very poorly,” Annable says. “Needless to say, this will be our last cruise with Holland America.”