x Abu Dhabi, UAETuesday 23 January 2018

The hard part is not finding a great online coupon - it's redeeming it

Consumers have embraced the world of daily deal websites, but there's so many people buying the offers that many are left struggling to actually redeem their purchases.

Paul Wynne, a Dubai-based director of a recruitment consultancy, booked his stay at the Hilton Ras Al Khaimah Beach Resort and Spa (pictured) through a daily deal website in May. But he wasn't able to redeem his package until two months later because the deal was so popular. Jeffrey Topping / The National
Paul Wynne, a Dubai-based director of a recruitment consultancy, booked his stay at the Hilton Ras Al Khaimah Beach Resort and Spa (pictured) through a daily deal website in May. But he wasn't able to redeem his package until two months later because the deal was so popular. Jeffrey Topping / The National

When Paul Wynne, a director of a recruitment consultancy in Dubai, booked a hotel stay at the Hilton Ras Al Khaimah Beach Resort and Spa through a daily deal website, he was hoping to redeem his holiday package almost immediately.

The deal, which Mr Wynne booked through Cobone (www.cobone.com) in May, was for a watersports package for two people and included bed and breakfast. He snapped up his weekend break for an impressive Dh899, a 50 per cent discount on the original price.

But it wasn't until July that Mr Wynne, 39, could redeem his bargain holiday. The problem? He found it difficult to secure a reservation for the weekend he actually wanted to stay at the resort. But this was compounded by the fact that he had to make the booking through a third-party company, which he was unaware of.

"Upon contacting the hotel directly, we were informed a third-party company, Arabian Diver, was the managing agent for the voucher booking process for the Hilton and I was told to contact them," says Mr Wynne.

"I phoned the third-party company to arrange the booking - the contact person said there was no availability for approximately six weeks on weekends. He asked that I send him the voucher number via e-mail, which I did on three occasions, and he would get back to me in a week's time to confirm as they only had small number of spaces per weekend from Hilton."

Mr Wynne was finally able to make his booking for July 8, when there was a guaranteed space.

The growing number of deal websites operating in the UAE, such as Groupon, Cobone and GoNabit, has seen thousands of people snap up impressive discounts on a range of offers.

Often, these group buying websites offer great value to the consumer. Many hotels, for instance, use the websites as a platform to promote their properties and to fill empty rooms, with particularly attractive deals being launched during the summer months. But there are also potential pitfalls to look out for, as Mr Wynne discovered.

Consumers could find themselves at the mercy of possibly hundreds of others who also bought the same deal, which means having to wait their turn.

Mr Wynne says his overall experience at the hotel was good, but the difficulty in redeeming the voucher has put him off using deal websites in the future.

Adel Khatib, the co-owner of Arabian Diver, says consumers need to be aware that not everyone is going to get their first choice of dates. By their very nature, these websites are based on volume purchases and most people tend to want to use the vouchers at weekends.

"This is a promo deal, so we ask that you have alternative check-in days," Mr Khatib says. "Every guest wants the first immediate Friday."

Mr Khatib says there is transparency on the daily deal websites, which show the exact number of people who have purchased the vouchers - in this case, 331 people also bought the same watersports package that Mr Wynne had purchased.

"We had a validity from May to the end of August," Mr Khatib says. "Ninety per cent of the voucher holders want a Friday check-in. When we don't have availability that specific Friday, we have to move them to the next Friday.

"We study very carefully the amount of vouchers sold in accordance with the validity period and we actually stop the sale accordingly when we find it has reached our maximum capacity. We don't ever want to have any guest who is going to turn around and say we don't have time to avail this voucher.

"I don't think there's anything wrong with these deals. It's great for the summer. It's great for the guest and everyone benefits."

Brad Crewe, a 37-year-old visual merchandising manager in Dubai, bought a discounted hotel stay for the Kempinski Hotel in Ajman through GoNabit with a group of friends for a birthday celebration.

"We had a lot of trouble using the voucher as there were a number of us trying to book the hotel for the same time so we could all go together," Mr Crewe says.

"I would not recommend doing this if there is more than one of you travelling together as a group as it was very difficult to get enough reservations.

"Through persistence and calling every week leading up to the weekend, we ended up being able to take a last-minute cancellation, which meant we could join our friends on the weekend away."

However, Mr Crewe says the offer was restrictive in many ways.

"It was very busy with check-in and check out. If a hotel was expecting big numbers of guests due to these vouchers being redeemed, I would think they could put more staff on or brief the staff on being more efficient ... or having everything prepared so that it was all at hand when each party checked in.

"The food side of the package was average. It was a buffet-style, which meant you could not choose another restaurant and you were left with no choice but to have the buffet. I would have rather had a choice for dinner, despite it costing more. The hassle of finding a weekend that you can use the voucher is difficult and I would rather just be able to book when I want to."

GoNabit says its hotel deals have been successful, but admits there is some fine-tuning needed because the concept of buying hotel stays is still relatively new.

"We work with the hotel at the beginning of the process of putting a deal together to ensure that the best possible availability for our clients is always there," says Naz Musa, the general manager of GoNabit Getaways.

"We've had two [UAE hotel] deals that have sold 850-plus rooms in 72 hours. If you have 850 people buying a hotel room over the course of two or three days, then obviously the strains on [a hotel's] call centre and on your reservations are significant. We've got dedicated merchant service staff now employed to work with the hotel before the deal goes live, during the deal and then after the deal to analyse what's happened."

Often it is not the availability of rooms that is an issue, but the availability of the services offered in conjunction with the deal.

"For example, we sold 581 rooms at the Kempinksi in Ajman in a couple of days and part of that was a massage at the spa," Mr Musa says. "Now if the validity of that deal was over eight weeks and there are 580 people going over eight weekends, there is only a finite availability of spa facilities available in the hotel and masseurs. Between us and the hotel, we came up with some solutions, including giving vouchers to come back another time for the spa treatments and using a nearby spa that wasn't part of the hotel, which we paid for from our earnings of the deal."

Guests also have to remember that if the voucher only covers a night's accommodation, costs can quickly add up if they are checking into a remote resort, where they will inevitably have to buy all their meals and pay for activities.

Analysts say the positives of hotel deals offered on deal websites include the extremely attractive prices for consumers. However, the hotels often reap little direct financial benefits through the promotion.

"While the hotel's profit margin is low in such deals, they can be extremely useful in promoting the hotel," says Karima Berkani, a research analyst at Euromonitor International.

"Although most consumers who see the advert for the deal will not purchase it, the deal is advertised to a massive distribution list, offering invaluable exposure for the hotel.

"It encourages consumers to try hotels, take trips they wouldn't otherwise take because it reduces financial risk in trying something new. But, at the same time, given that the user buys the voucher up front, there are also limitations."