Which Promotion Time Frame Works Best for Restaurant Group-buying Deals?

Abstract

Given the perishable nature of tourism products/services, an increasing number of tourism and hospitality companies, such as restaurants, hotels, travel agencies, and spas, are using multiple distribution channels to increase the market exposure of their brands and products. This study investigated the impact of promotion time frame (i.e., time lapsed and time to go) on the sales performance of tourism and hospitality group-buying deals. We also evaluated if the days of the week affect the sales of these deals. We analyzed 603 observations of 101 restaurant deals from the top 25 group-buying websites in Hong Kong and conducted an analysis of covariance to analyze the collected data. Results showed that the daily sales of restaurant deals are affected by the lapsed time, time to go, and day of the week. Given the combined effects of time lapsed and time to go, restaurants can achieve optimum sales of their group-buying deals by observing a five-day promotional period. The deals made available on Thursdays were found to achieve the highest sales. The results of this study will help restaurateurs and group-buying websites to determine the ideal promotional time frame for generating sales from group-buying deals.