A business model approach towards the understanding of daily deals within Internet distribution systems

Abstract

The business model (BM) approach is making a slow, yet steady footprint in tourism research, can offer a fresh perspective and a viable level of analysis for broader networks of Internet distribution systems (IDSs). To date, the researchers have devoted limited attention to studying the daily deal (DD) providers and their position next to the online travel agencies (OTAs). More importantly, the DD providers developed a unique BM characteristics, which contrary to early predictions, enabled them to proliferate post-recession and maintain their position. The current study uses the BM approach to observe the original dimensions and BM elements, to identify distinct characteristics of generic and niche DD providers, and to benchmark them against the established OTAs. The BM approach enhances the understanding of the overlooked niche DD providers within IDSs. Further, this article provides a comparison of the BM characteristics in IDSs to help facilitate the formulation of a unique value proposition for each of them. Ultimately, the authors acknowledge limited possibilities for cooperation between the providers and discuss future directions of DD and broader IDSs BM transformations.

Keywords

business model case study daily deals interview Internet distribution systems

Get full access to this article

View all access options for this article.

References

Accor Hotels (2017) AccorHotels acquires VeryChic, a European leader in the private sale of luxury and upscale hotel rooms and breaks | AccorHotels. Available at: http://press.accorhotels.group/accorhotels-acquires-verychic-a-european-leader-in-the-private-sale-of-luxury-and-upscale-hotel-rooms-and-breaks/ (accessed 4 April 2017).

Amblee

Bui

(2012) Value proposition and social proof in online deals: an exploratory study of Groupon.com. In: Proceedings of the 14th annual international conference on electronic commerce, Singapore, Singapore, 7–8 August 2012, pp. 294–300. New York: ACM.

Anderson

(2009) The Billboard Effect: Online Travel Agent Impact on Non-OTA Reservation Volume. Center for Hospitality Research Publications, pp. 1–12. Available at: https://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1001andcontext=chrpubs (accessed 15 October 2018).

Arabshahi

(2010) Undressing Groupon: an analysis of the Groupon business model. Available at: https://www.scribd.com/document/269309456/Undressing-Groupon (accessed 21 June 2017).

Berezina

Semrad

Steochenkova

, et al. (2016) The managerial flash sales dash: Is there advantage or disadvantage at the finish line? International Journal of Hospitality Management 54: 12–24.

Berger

Luckman

(1987) The Social Construction of Reality: A Treatise in Sociology of Knowledge. Middlesex: Penguin Books.

Beritelli

Schegg

(2016) Maximizing online bookings through a multi-channel-strategy. International Journal of Contemporary Hospitality Management 28(1): 68–88.

Boon

Wiid

Des Autels

(2012) Teeth whitening, boot camp, and brewery tour: a practical analysis of ‘deal of the day’. Journal of Public Affairs 12(2): 137–144.

Bratec

(2018) The Digital Economy of Tourism. The SAGE Handbook of Tourism Management, pp. 322–354.

10.

Braun

Clarke

(2008) Using thematic analysis in psychology. Qualitative Research in Psychology 3(2): 77–101.

11.

Bryman

(2008) Social Research Methods, 3rd ed. Oxford: Oxford University Press.

12.

Buhalis

Kaldis

(2008) eEnabled internet distribution for small and medium sized hotels: the case of hospitality SMEs in Athens. Tourism Recreation Research 33(1): 67–81.

13.

Bui

Jeng

DJF

Lin

(2015) The importance of attribution: connecting online travel communities with online travel agents. Cornell Hospitality Quarterly 56(3): 285–297.

14.

Byers

Mitzenmacher

Zervas

(2012) The Groupon effect on Yelp ratings: a root cause analysis. In: Proceedings of the 13th ACM conference on electronic commerce, Valencia, Spain, 4–8 June 2012, pp. 248–265. New York: ACM.

15.

CNBC (2018) Secret Escapes just got a $60M funding round, led by Google. Available at: http://www.cnbc.com/2015/07/24/secret-escapes-just-got-a-60m-funding-round-led-by-google.html (accessed 2 August 2018).

16.

Coombes

Nicholson

(2013) Business models and their relationship with marketing: a systematic literature review. Industrial Marketing Management 42(5): 656–664.

17.

Cox

(2012) The consumer experience of holidays booked via daily deal promotions: an online content analysis of traveller reviews. In: Australia and New Zealand Marketing Academy conference (ANZMAC 2012), Adelaide, Australia, December 2012, pp. 1–8. Available at: http://anzmac.info/conference/2012/papers/341ANZMACFINAL.pdf (accessed 4 February 2014).

18.

Cox

(2017) Sealing the deal: factors influencing guest satisfaction with accommodation daily deals. Journal of Hospitality Marketing and Management 26(5): 532–551.

19.

DaSilva

Trkman

(2014) Business model: What it is and what it is not. Long range planning 47(6): 379–389.

20.

Dholakia

(2010) How effective are Groupon promotions for business? Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1696327 (accessed 12 March 2017).

21.

Dholakia

(2011a) Why employees can wreck promotional offers? Harvard Business Review 89(1/2): 28–28.

22.

Dholakia

(2011b) What makes Groupon promotion profitable for business? Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1790414 (accessed 24 March 2017).

23.

Dholakia

Tsabar

(2011) A startup’s experience with running a Groupon promotion. Available at: https://ssrn.com/abstract=1828003 (accessed 12 August 2018).

24.

Edelman

Jaffe

Kominers

(2016) To Groupon or not to Groupon: the profitability of deep discounts. Marketing Letters 27(1): 39–53.

25.

eMarketer (2011) Groupon and the Online Deal Revolution. Available at: https://www.emarketer.com/Article/Groupon-Online-Deal-Revolution/1008427 (accessed 3 October 2018).

26.

Erdoğmus

Çiçek

(2011) Online group buying: What is there for the consumers? Procedia-Social and Behavioral Sciences 24: 308–316.

27.

Farahat

Ahmed

Dholakia

(2012) Does daily deal promotion a signal distressed business? An empirical investigation of small business survival. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2171901 (accessed 5 January 2016).

28.

Fiegerman

(2016) Groupon buys rival LivingSocial for a heavy discount. Available at: https://money.cnn.com/2016/10/26/technology/groupon-buys-livingsocial/index.html (accessed 15 November 2018).

29.

Gassmann

Frankenberger

Csik

(2014) Revolutionizing the business model. In: Gassmann

Schweitzer

(eds) Management of the Fuzzy Front End of Innovation. New York: Springer, pp. 89–98.

30.

Green

LoManno

(2012) Distribution channel analysis: a guide for hotels – trends and research. Available at: www.hsmai.org (accessed 20 September 2018).

31.

Guba

Lincoln

(1989) Fourth Generation Evaluation. London: Sage.

32.

Gustafsson

Öström

Johansson

, et al. (2006) The five aspects meal model: a tool for developing meal services in restaurants. Journal of Foodservice 17: 84–93.

33.

Hassanien

Dale

(Ed.) (2013) Facilities Management and Development for Tourism, Hospitality and Events. Wallingford: Cabi.

34.

Huang

Chen

(2009) What kind of marketing distribution mix can maximize revenues: the wholesaler travel agencies’ perspective? Tourism Management 30(5): 733–739.

35.

Hughes

Beukes

(2012) Growth and implications of social e-commerce and group buying daily deal sites: the case of Groupon and LivingSocial. International Business and Economics Research Journal 11(8): 921–933.

36.

Hughes

Breytenbach

(2013) Groupon’s growth and globalization strategy: structural and technological implications of international markets. International Business and Economics Research Journal 12(12): 1589–1604

37.

Ibrahim

(2006) Handbook of Research on Mobile Multimedia . Idea Group Inc, IGI.

38.

Joffe

Yardley

(2004) Content and thematic analysis. In: Marks

Yardley

(eds) Research Methods for Clinical and Health Psychology, 1st ed. London: Sage, pp. 56–89.

39.

Kim

Vogt

Knutson

(2013) Relationships among customer satisfaction, delight and loyalty in the hospitality industry. Journal of Hospitality and Tourism Research 39(2): 170–197.

40.

Kracht

Wang

(2010) Examining the tourism distribution channel: evolution and transformation. International Journal of Contemporary Hospitality Management 22(5): 736–757.

41.

Kumar

Rajan

(2012) Social coupons as a marketing strategy: a multifaceted perspective. Journal of the Academy of Marketing Science 40(1): 120–136.

42.

Lappas

Terzi

(2012) Daily-deal selection for revenue maximization. In: Proceedings of the 21st ACM international conference on information and knowledge management, Maui, Hawaii, USA, October 2012, pp. 565–674. New York: ACM.

43.

Lee

(2012), Social shopping promotions from a social merchant’s perspective. Business Horizons 55(5): 441–451.

44.

(2012) Measuring effects of observational learning and social-network word-of-mouth (WOM) on the sales of daily deal vouchers. In: 46th Hawaii international conference on system sciences, Wailea, Maui, USA, 7–10 January 2015, pp. 2908–2917.

45.

Law

, et al. (2014) Which promotion time frame works best for restaurant group buying deals? Tourism Recreation Research 39(2): 203–219.

46.

Lynch

(2005) Sociological impressionism in hospitality context. Annals of Tourism Research 32(3): 527–548.

47.

Magretta

(2002) Why Business Models Matter, Harvard Business Review, May.

48.

Massa

Tucci

Afuah

(2017) A critical assessment of business model research. Academy of Management Annals 11(1): 73–104.

49.

May

(2014) Secret Escapes acquires Travelist, wants to get flashy elsewhere in Europe, Phocuswire. Available at: https://www.phocuswire.com/Secret-Escapes-acquires-Travelist-wants-to-get-flashy-elsewhere-in-Europe (accessed 2 February 2017).

50.

Minor

(2017) Hospitable or hostile? The impact of daily deals in the hotel sector of the hospitality industry. PhD Thesis, Cardiff Metropolitan University, UK.

51.

Minor

Ritchie

(2018) The impact of hotel engagement with Daily Deal promotions upon working environment of hotel front office staff in small and medium hotels, presented at Council for Hospitaity Management Education 2018, Bournemouth.

52.

Mintel (2015) Eating out the digital customer. Available at: http://academic.mintel.com.ezproxy.cardiffmet.ac.uk/display/736313 (accessed 6 April 2016).

53.

Mintel (2018) Short and City Breaks – UK – July 2018. Available at: http://reports.mintel.com/display/859335/?__cc=1 (accessed December 11 2018).

54.

Nam

Ekinci

Whyatt

(2011) Brand equity, brand loyalty and consumer satisfaction. Annals of Tourism Research 38(3): 1009–1030.

55.

Osterwalder

(2004) The business model ontology: a proposition in a design science approach. Available at: http://www.qpt-consulting.com/cms/upload/documentos/20130213115948.osterwalder_phd_bm_ontology.pdf (accessed July 4 2018).

56.

Parsons

Ballantine

Ali

, et al. (2014) Deal is on! Why people buy from daily deal websites. Journal of Retailing and Consumer Services 21(1): 37–42.

57.

Patton

(2002) Two decades of developments in qualitative inquiry: a personal, experiential perspective. Qualitative Social Work 1(3): 261–283.

58.

Phocuswright (2016) Channel Surfing: Where Consumers Shop for Travel Online. Available at: http://www.phocuswright.com/Free-Travel-Research/Channel-Surfing-Where-Consumers-Shop-for-Travel-Online (accessed 8 August 2016).

59.

Piccoli

Dev

(2012) Emerging marketing channels in hospitality: a global study of internet flash sales and private sales. Cornell Hospitality Report 12(5): 6–18. Available at: https://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1108andcontext=chrpubs (accessed 21 April 2017).

60.

Raab

Berezan

Christodoulidou

, et al. (2018) Creating strategic relationships with online travel agents to drive hotel room revenue: an OTA perspective. Journal of Hospitality and Tourism Technology 9: 121–135.

61.

Reinhold

Zach

Krizaj

(2017) Business models in tourism: a review and research agenda. Tourism Review 74(4): 462–482.

62.

Rosselló

Riera

(2012) Pricing European package tours: the impact of new distribution channels and low-cost airlines. Tourism Economics 18(2): 265–279.

63.

Ruggles

(2012) 1 Day Deals. Nation’s Restaurant News 46(2): 1–1.

64.

Sarantakos

(2013) Social Research, 4th ed. Basingstoke: Palgrave MacMillan.

65.

Schutt

(2012) Investigating the Social World: The Process and Practice of Research, 7th ed. London: Sage.

66.

Shiau

(2013) Using curiosity and group-buying navigation to explore the influence of perceived hedonic value, attitude, and group-buying behavioural intonation. Journal of Software 8(9): 2169–2176.

67.

Sigala

(2013) A framework for designing and implementing effective online coupons in tourism and hospitality. Journal of Vacation Marketing 19(2): 165–180.

68.

Sigala

Christou

Gretzel

(2012) Social Media in Travel, Tourism and Hospitality: Theory, Practice and Cases. Farnham: Ashgate.

69.

Stangl

Inversini

Schegg

(2016) Hotels’ dependency on online intermediaries and their chosen distribution channel portfolios: three country insights. International Journal of Hospitality Management 52: 87–96.

70.

Statista (2018) Number of Groupon’s active customers from 2nd quarter 2009 to 2nd quarter 2018 (in millions). Available at: https://www-statista-com.ezproxy.cardiffmet.ac.uk/statistics/273245/cumulative-active-customers-of-groupon/ (accessed 12 December 2018).

71.

Strachan

Yellowlees

Quigley

(2015) Generic practitioners’ assessment of and treatment decisions regarding common mental disorder in older adults: thematic analysis of interview data. Aging and Society 35(1): 150–168.

72.

Štulec

Petljak

Vouk

(2011) The role of internet in empowering consumers: the case of group buying. In: Proceedings of MSKE 2011 – Managing services in the knowledge economy, Famalicão, Portugal, 13–15 July 2011, pp. 730–741. Famalicão: Universidade Lusíada de Villa Nova de Famalicão.

73.

Subramanian

(2012) Theory of social coupons. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2103979 (accessed 25 March 2015).

74.

Suddaby

(ed.) (2010) Editor’s comments: construct clarity in theories of management and organization. Academy of Management Review 35(3): 346–357.

75.

Teece

(2007) Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal 28(13): 1319–1350.

76.

Teece

(2010) Business models, business strategy and innovation. Long range planning 43(2-3): 172–194.

77.

Teece

(2015) Intangible assets and a theory of heterogeneous firms. In: Bounfour

Miyagawa

(eds) Intangibles, Market Failure and Innovation Performance. New York: Springer, pp. 217–239.

78.

Teece

(2018) Business models and dynamic capabilities. Long Range Planning 51(1): 40–49.

79.

Tomat

Bratec

Minor

, et al. (2018) Daily deals in the mediterranean region: A data analytical approach. eReview of Tourism Research 16(2-3): 13–23.

80.

Vaughan

(2012) Digital discounting – the offers you can’t refuse. Available at: http://www.caterersearch.com/Articles/16/04/2012/343230/Digital-discounting-The-offers-you-can39t-refuse.htm (accessed 16 June 2015).

81.

Wirtz

Pistoia

Ullrich

, et al. (2016) Business models: Origin, development and future research perspectives. Long Range Planning 49: 36–54.

82.

Kimes

Dholakia

(2012) Restaurant daily deals: the operator experience. Cornell Hospitality Report 12(16): 6–18.

83.

Wang

Aperjis

, et al. (2011) Collective attention and the dynamics of group deals. In: Proceedings of the 21st international conference on World Wide Web, Lyon, France, 16–20 April 2012, pp. 1205–1212. New York: ACM.

84.

Yin

(2003) Case Study Research Design and Methods, 3rd ed. Great Britain: Ashford Colour Press.

85.

Zach

Krizaj

(2017) Experiences through design and innovation along touch points. In: Fesenmaier

Xiang

(eds) Design Science in Tourism. Cham: Springer, pp. 215–232.

86.

Zott

Amit

Massa

(2011) The business model: recent developments and future research. Journal of Management 37(4): 1019–1042.