Deal or No Deal?
Daily deal (or “flash sale” sites) like Groupon, LivingSocial, and Rue La La, are quite popular with both hoteliers and their potential guests, providing, as they often do, slashed rates and an easy method for getting heads in beds during times the hoteliers want them there the most. Unfortunately, these channels may not provide the benefits they seem to, and they pose a number of legal and practical risks that may make them even less attractive.
• Illegal Voucher Expiration Dates. Most of these providers issue vouchers to purchasers for redemption at hotels, which vouchers are considered “gift certificates” under most state and federal laws. Despite language in the standard contracts proposed by the providers, and despite hoteliers’ agreement (or desire) to limit redemption periods, the law may require vouchers be honored well beyond the time the hotel intended it to be. Some states have laws prohibiting the expiration of gift certificates period, some have mandated long validity periods, and federal law requires most gift certificates to be valid for 5 years.
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.