By Jane E. Fraser
Beware that picture of a palm-fringed swimming pool and a promise of 50 per cent off.
A little bit of research goes a long way to ensure there are no regrets when using the increasingly popular group buying websites to nab your next holiday.
Group buying websites can be a great way to snag a bargain, but you need to be smart about it. Here's what to watch out for.
There's a picture of a palm-fringed swimming pool and a headline promising a discount of 50 per cent or more.
Illustration: michaelmucci.com
You're sitting at your desk wading through boring emails or accounts and next thing you know you've bought a holiday.
Will it be the best-value escape you've ever had or will you get caught in the fine print?
And is that 50 per cent discount really the saving it says it is? Huge numbers of Australians have now used group buying websites such as Groupon, Scoopon, LivingSocial, and All the Deals, some of which offer heavily discounted goods or services on the condition that a minimum number of people take up the deal.
There might be a reason why there is plenty of availability.
Roy Morgan research presented at this year's Tourism and Events Excellence Conference indicates about one-third of Australians have used a group buying site to make a travel-related purchase, with Australian accommodation being the most common.
But this rapidly growing sector is attracting large numbers of consumer complaints.
Between July and the end of October, NSW Fair Trading alone received more than 2800 complaints about group buying sites, mostly related to non-supply or partial supply of goods and services.
There is no breakdown on how many of these complaints relate to travel but travel accounts for at least 15 per cent of sales for most group buying sites.
A spokeswoman for the consumer watchdog Choice, Ingrid Just, says while some group buying sites are responsible and work hard to ensure consumers receive what they pay for, others see themselves as little more than a portal and wash their hands of any problems that ensue. The development of an industry code of conduct has been a step in the right direction but all such codes come down to how well they are enforced, Just says.
Two group buying sites in Australia, Groupon and Scoopon, are registered travel agents, which means they comply with the same licensing conditions as any other online or bricks-and-mortar travel agency. Part of these licensing conditions is membership of the Travel Compensation Fund, which provides some consumer protection for travellers.
LivingSocial, which says it is a "marketing agent" rather than a travel agent and therefore does not need to be licensed, has taken the approach of offering a no-questions-asked refund within 14 days of purchase if consumers change their minds.
The director of travel content for the site, Richard Swanton, says it recognises that people are making impulse purchases and does not want customers to regret them.
Just says the biggest problems with group buying websites are the terms and conditions attached to the deals, and the capacity of the providers to handle the influx of queries and bookings.
With travel deals, the key things to look for are when you are allowed to take the holiday and whether there are any blackout periods or fine print, such as midweek stays or high-season surcharges. Just says travellers should also do their own research on the quality of the accommodation or experience and what it's really worth, as the "savings" might be calculated on high-season prices rather than everyday rates, or there might be a reason why there is plenty of availability.
"It's very easy to be attracted to that headline price, that 50 per cent off, but before you sign on, just take a deep breath and do some digging around," she says.
Just says the other thing to look for is the timing of when the site passes on your money, as this will affect your ability to negotiate a refund if there is a problem taking up the deal.
Some sites pass on the money straight away, while others pay only when you take the holiday.
Swanton believes group buying has already revolutionised the way we buy travel and the trend is only getting started.
Swanton predicts traditional models of travel distribution are facing extinction.
"I believe we're only playing with [travel] at the moment and there's so much more that this industry has to offer consumers," he says.
"This is the fastest-growing industry I've ever witnessed."
What are we buying?
Group buying deals are not just for weekends and short breaks.
Groupon says some of its most popular deals were a South African safari package including flights and a five-star trip to Cancun, Mexico.
Popular domestic deals include a Hunter Valley trip and a Great Ocean Road escape with a geothermal baths visit.
LivingSocial's most popular overseas deals have been to Thailand, Fiji, Bali and Hawaii. Its most popular Australian breaks have been Tasmania, the Blue Mountains, Phillip Island and the wine regions.
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