The Double-Edged Sword of Hoxton Hotel's £1 Room Sale

so I've just bagged a room at the Hoxton Hotel  (the £17m establishment opened in 2006 by Pret founder Sinclair Beecham) in their sale...  a quarterly event which this time round offered 500 rooms at £1 and 500 rooms at £29 to the first to book them online from noon today.  the sale lasted 19 minutes.

as expected, online demand at the booking engine was high and much page refreshment was required before I finally got to the booking.  others didn't make it...  a friend messaging online commented on the frustration being felt (and verbally articulated) around his office.

these frustrations were acknowledged by the Hotel's General manager David Taylor, who in an online statement after the sale commented:

"The booking engine once again struggled to keep up with the huge number of people trying to book rooms ...  We are sorry if you were not successful, We are sorry of the booking engine stalled on you, We are sorry that not everyone could be a winner"

and that's the problem with sales like this, the CRM fall-out can be painful.  the website experienced 500,000 hits in the 19 minute duration of the sale, with only 1,000 'winners', that potentially leaves 499,000 disappointed potential customers.  but there's a flipside...  boy is there a flipside.

using the lowest standard room rate of £59 as a base, the sale cost the Hotel £44,000 worth of income.  but to recoup this income Hoxton has (only) to sell 746 rooms it otherwise wouldn't have done.  so of the half a million hits they received today, they only have to convert 0.0015% of them to get the money back.  which shouldn't be too tall an order at all.

but money aside, the sale is delivering across a number of other key metrics.  I'm willing to bet the quarterly spikes in the below Google Trends result for 'Hoxton Hotel' is driven by their quarterly sales.

added to this increase in website traffic is the surge of new email addresses and mobile phone numbers to their database (I surprised myself at how much personal information I was happy to throw at the website when the clock was against me), and of course the word of mouth effect that this generates...  I found out about the sale from a friend, who found about it from his friend, who in turn found out about it from his girlfriend who was already on the database.

it's one hell of a sales promotion that can generate this kind of response whilst almost certainly paying for itself...   a double edged sword it may be, but I'm sure it's one that this Hotel is more than happy to wield.