Daily deals site Groupon says that travel is its fastest growing business category, and today it is launching a new mobile app that it hopes will help it capitalize on that more. Getaways by Groupon, a free app for iOS and Android, bypasses Groupon’s wider focus on local merchant deals to focus only on travel packages and hotels (25,000 offers listed right now), similar to the Groupon site of the same name. Getaways squarely puts Groupon up against the likes of Hotel Tonight, Kayak, TripIt and others that help smartphone users plan trips.
Much like Mark Zuckerberg’s argument for why Facebook built a standalone Messenger app, there are extra features built into the Getaways app over time that you can’t get elsewhere. But for those who can’t face the idea of downloading yet another app, Groupon’ says they’ll still be able to see travel offers in the main Groupon app, too.
“Travel will still remain an integral part of the main Groupon app,” says Simon Goodall, VP/GM, Groupon Getaways.
All the same, Groupon’s trying to push more people to its Getaways app. Those who download it and book a trip through it can get a 20% discount until November 14 if they use the APP20 promotion code.
And it will have some extra features, too, including the ability to Browse by theme, perform map-based searches, a set to flash travel sales with up-to-60-percent-off discounts; and editorially selected “market picks” based on “quality and value” that give people Groupon Bucks to use for other Groupon purchases.
The Getaways mobile app, like many of Groupon’s newest products, will be available initially in North America only. In this case, though, Europe was actually an early mover for Groupon’s travel strategy: Getaways will sit alongside Blink, a European app that Groupon acquired last year when it purchased the Madrid, Spain startup of the same name.
“Like most of our launches, we’re making this available first in the United States and Canada,” says Goodall. “The plan [is] to expand it internationally, over time.”
As Groupon continues to build out its portfolio of services taking people beyond its original premise of email-delivered daily deals, it’s not surprising to see that its latest product is a mobile app, and one focused on travel.
Simon Goodall, VP/GM, Groupon Getaways, says that in the year between Q3 2013 and Q3 2014, Groupon had over $908 million in gross travel billings, just under 13% of all of Groupon’s total gross billings in that period. That represented growth of 69% between Q3 2014 and Q3 2014. He also notes that “hotel” is also one of the most popular search terms on Groupon.com and the Groupon mobile app.
At the same time there is room to improve how well travel is performing.
In that same period, the gross margins on travel purchases were 16.2%, versus margins of 20.4% across the whole Groupon’s business. Given the lukewarm response from Wall Street to Groupon’s quarterly earnings last week (which beat expectations), there still seems to be a feeling inside and outside that company that it should be doing better.
To that end, Groupon has been pushing hard on mobile services and mobile apps.
The company noted in its Q3 earnings that it’s passed the 100 million download mark for mobile apps, and that half of its sales come from these apps. Like other platform companies like Facebook, LinkedIn and Amazon, Groupon has been trying to tap into this by launching more, and more vertically-focused mobile apps to sit alongside its main Groupon app. Recent efforts include its new Snap coupon app, Ideel for flash fashion sales, and Breadcrumb for eating establishments to offer mobile payments.
One thing that is not getting wrapped into Getaways will be Groupon’s assets from SideTour, an activity app that connects consumers with bespoke events and other things to do.
But users will be able to get discounts on events when they do book travel-related deals on the platform. “The app is focused on hotels and travel packages,” Goodall says. “By creating a dedicated and focused experience around travel, we can help people find exactly what they’re looking for or inspire them to go somewhere. While traveling customers our customers are encouraged to use the Groupon App to find great things to do, places to eat and more. If they buy one of our thousands of market picks hotels they’ll be able to use their 5% back in Groupon Bucks through that app while on their trip.”