Built on its recent acquisition of UrbanEscapes, LivingSocial has launched travel deals: “LivingSocial Escapes.” CEO Tim O’Shaughnessy jokingly called the new travel offering “weekend in a box.” He told me there are three options that will be made available within the Escapes program:
- Urban escapes (in town essentially)
- Nearby Gateways (drivable “nearcations”)
- Destination trips easily accessible “from your city” (direct, short flights)
This is very smart and helps differentiate the LivingSocial brand from Groupon and others in the space. Based on my own informal reaction to the program I think it will be a winner and quite successful for the company.
The structure of these Escapes deals is similar but not identical to the daily deals LivingSocial offers. The time frame for consumer action is longer (7 days); it’s a more considered purchase. The margins and the pricing aren’t going to always be the same as the daily deal structure, but discounts (value) will be significant. In addition, in some cases LivingSocial is putting its own personnel on the scene as guides. A five-day mostly all-inclusive trip to Mexico is an example.
O’Shaughnessy said the brand is about offering “really cool things to do at great value” and this new travel experience is consistent with that notion. LivingSocial has also tried to position itself as more merchant friendly than other daily deals vendors.
I joked with O’Shaughnessy that LivingSocial was Avis to Groupon’s Hertz. Speaking of which, there were reports over the past couple of days that Groupon was seeking more funding at a $3 billion valuation and that Yahoo might be trying to buy the company (again) for up to $4 billion.
Groupon has a solid business but that’s too much money for Yahoo to spend. LivingSocial would be a better deal, so to speak. However now with Escapes LivingSocial is evolving into a different kind of company that might be inconsistent with Yahoo’s ambitions — they probably don’t want to be leading tours to Mexico.
Yet it’s this sort of diversification — and we’ll see more of it — that will help LivingSocial sustain after “daily deal fatigue” sets in for both consumers and merchants.