Online Travel Booking and Bidding Agencies - Priceline's Negotiator is Found Alive

"After plunging off a bridge to his presumed demise, the Priceline Negotiator, aka William Shatner, has miraculously been found alive in a new TV spot that begins airing this week. To view the new spot, visit www.youtube.com/priceline."" "I negotiated my way out of that bus crash and into priceline.com's new commercial," said Mr. Shatner. "There's no limit to the Negotiator's skills."

Source: http://www.digitaljournal.com/pr/840025#ixzz23dGxJtY0

Of course, he never left the internet site: whenever I submit a bid he assures me that "it's in the bag" even if it is rejected.

Too bad as I am not fond of those commercials. Just MHO, of course.

I actual like them, but I have wierd taste.

I always preferred Mr. Spock . . .

Apparently, bidding is a big driver for Priceline mostly because they can show it differently on their financial statements versus a commission sale on the retail side. The fact that they removed Shatner affected their top and bottom lines.

Last week's earnings transcript reminds us of that:

http://seekingalpha.com/article/788431-priceline-com-ceo-discusses-q2-2012-results-earnings-call-transcript

Name Your Own Price services experienced challenges relating to supply for air and rental car. In hotels, Name Your Own Price faced increased competition in the discount space and a more challenging user experience from mobile devices often used for last minute bookings.

[..]

Strong growth in retail hotel room nights booked and higher ADRs as well as strong growth in retail rental car bookings were key drivers in year-over-year growth. However each of our Name Your Own Price businesses had a challenging quarter posting decreases in year-over-year unit costs. We believe our Name Your Own Price hotel room nights declined likely as a result of continued presence of competitive discount hotel initiatives and the emphasis on no bidding offerings in our offline advertising. We launched Express Deals during the quarter which allowed customers to enjoy substantial savings with the posted price. We believe that Express Deals will appeal to customers who want to save money but are not comfortable with the bidding process.

We’re still in the early stages and we intend to continue to experiment with various ways to operate Express Deals to customers on Priceline.com in coming quarters. Airline tickets booked were down by 2%, while average retail ticket prices were up by 7%. Name Your Own Price tickets declined to a greater extent to the limited supply resulting from airline capacity cuts. Name Your Own Price rental car days booked were down significantly due to limited availability of discount and supply and low retail prices that lessened the relative value proposition of our Name Your Own Price offering.

The decrease in our Name Your Own Price businesses has a more pronounced impact on revenue, and merchant revenue in particular, since these transactions are recorded gross in revenue, with supplier cost reported in cost of revenue while our other merchant businesses principally Agota.com and Rentalcars.com are recorded in revenue net of supplier cost.



Rasheed

Apparently, bidding is a big driver for Priceline mostly because they can show it differently on their financial statements

The inherent problem with NYOP is that Priceline is probably not going to make the sale if the bid is declined and then the customer can go to the competition. In a non-bidding method, you are not turned down. It would seem to me that Priceline would always want to make a counter-offer if the bid is too low so that they could sell something in that round. I wonder why they don't - they seem to prefer to take their chances on losing the sale when they make no counteroffer.

It would seem to me that Priceline would always want to make a counter-offer if the bid is too low so that they could sell something in that round. I wonder why they don't - they seem to prefer to take their chances on losing the sale when they make no counteroffer.

I find the problem on so many levels.

If I am 'too close' to getting a bid to hit ($1-2 away), I get no counter bid in many cases. If I am too low, no rebid (as you said). There are some tricks here and there. I think I get a different styled re-bid screen if I am closer, but I have not tested this enough.

I think Priceline feels that its frequent users do not need to be encouraged if they are close to an acceptable price. However, I think it is the cutback by the frequent users they will miss the most.

I really find the 'too low' bid interrupt page terrible especially when the bid still gets accepted (rental car is where this happens a lot). Priceline should never put up that page in those circumstances. They already get their fee bundled in.

Then, on the express opaque product, the prices are just way too high in most cases.

Personally, I am a big fan of opaque travel when it works well. I think for NYOP rental cars, it works as it should (although retail prices are rather low and with the right coupon and the Priceline over-profit in the fees, you have to be very careful). NYOP airfare needs better inventory which is unlikely. For NYOP hotels, I have been moving over to the Marriott LNF method for a much better experience and a rather similar price point. My opaque Priceline spend numbers (on behalf of friends and collegues) used to be rather significant, but if I making most of my Priceline reward points on retail purchases, Priceline is not making the money like it used to do.

Rasheed

I find the problem on so many levels.

If I am 'too close' to getting a bid to hit ($1-2 away), I get no counter bid in many cases. If I am too low, no rebid (as you said). There are some tricks here and there. I think I get a different styled re-bid screen if I am closer, but I have not tested this enough.

I think Priceline feels that its frequent users do not need to be encouraged if they are close to an acceptable price. However, I think it is the cutback by the frequent users they will miss the most.

I really find the 'too low' bid interrupt page terrible especially when the bid still gets accepted (rental car is where this happens a lot). Priceline should never put up that page in those circumstances. They already get their fee bundled in.

Then, on the express opaque product, the prices are just way too high in most cases.

Personally, I am a big fan of opaque travel when it works well. I think for NYOP rental cars, it works as it should (although retail prices are rather low and with the right coupon and the Priceline over-profit in the fees, you have to be very careful). NYOP airfare needs better inventory which is unlikely. For NYOP hotels, I have been moving over to the Marriott LNF method for a much better experience and a rather similar price point. My opaque Priceline spend numbers (on behalf of friends and collegues) used to be rather significant, but if I making most of my Priceline reward points on retail purchases, Priceline is not making the money like it used to do.

Rasheed

The fact is, Priceline does NOT want to encourage you to NYOP if you are going to cut it so fine that you tend to hit the threshold price on the nose, or within a buck or two - because they make the least money that they can in that model - that's their breakeven point. What they really want you to do is to over-bid, because the entirety of your overbid is pure profit for them. The fact is, people were getting quite qood at using available resources to NYOP right on the nose. That's not a very profitable model for them. From a profit standpoint, they'd rather have 1 person who buys the hotel room at the list price, or 3-4 that over bid for it, than have 10 people who bid the exact minimum threshold price.

The fact is, Priceline does NOT want to encourage you to NYOP if you are going to cut it so fine that you tend to hit the threshold price on the nose, or within a buck or two - because they make the least money that they can in that model - that's their breakeven point.

We will just have to respectfully disagree on this item. Here are my views on that:

1) The fee they charge for successful bids no matter how close you are to the nose price are rather significant from a percent perspective in many cases. They also keep any higher calculated tax rate as profit as well versus what they actually pay the property. If for some reason they miscalculate the taxes and underquote, the bid does not go through.

2) As quoted from their analyst calls, opaque sales allow them to book the entire sales as revenue while retail sales only allow the commission to be booked as revenue. No matter how close you are to the the actual inventory price. This helps drive their outrageous stock price.

3) Whatever the reason, they are closing less auctions and disappointing their investors. They need to be as aggressive as allowed by supplier contracts to complete bids.

Anyway, in summary, Priceline makes money even if you bid the same amount as requested by the supplier.

Rasheed

William Shatner. That is one obit I am not looking forward to.

"After plunging off a bridge to his presumed demise, the Priceline Negotiator, aka William Shatner, has miraculously been found alive in a new TV spot that begins airing this week. To view the new spot, visit www.youtube.com/priceline."" "I negotiated my way out of that bus crash and into priceline.com's new commercial," said Mr. Shatner. "There's no limit to the Negotiator's skills."

Source: http://www.digitaljournal.com/pr/840025#ixzz23dGxJtY0

Of course, he never left the internet site: whenever I submit a bid he assures me that "it's in the bag" even if it is rejected.

I For NYOP hotels, I have been moving over to the Marriott LNF method for a much better experience and a rather similar price point.

Rasheed

Could you enlighten us about the "Marriott LMF method"? I have never come across this acronym before. Thanks!

Could you enlighten us about the "Marriott LMF method"? I have never come across this acronym before. Thanks! It's LNF - Look No Further. It's Marriott's guarantee that they give the lowest web price on their web site. On the hand, LMF is an acronym for an obscenity gangs use as a tag. I'd like that one better. Anyway, I have no idea how LNF becomes a method. You can find discussion threads where people complain that they don't get the price match because of details. And they won't beat the price the Negotiator gets you on NYOP because opaque site prices are out. These price match guarantees are not what they appear to be. Budget car rental has one. I booked with them and then saw a lower price on Expedia. Budget's response was that the Expedia price is a contracted price and that doesn't count for a match. So I cancelled the Budget reservation.

Correct me if I am wrong, but the LNF will give you a 25% discount if you can find a site that provides a cheaper price for the same room and property. On the Marriott board there is a discussion on going of using the LNF for a $.02 difference in price. As stated below, sites like PriceLine NOYP are excluded since you can't see the property name before wining the bid.

It's LNF - Look No Further. It's Marriott's guarantee that they give the lowest web price on their web site. On the hand, LMF is an acronym for an obscenity gangs use as a tag. I'd like that one better. Anyway, I have no idea how LNF becomes a method. You can find discussion threads where people complain that they don't get the price match because of details. And they won't beat the price the Negotiator gets you on NYOP because opaque site prices are out. These price match guarantees are not what they appear to be. Budget car rental has one. I booked with them and then saw a lower price on Expedia. Budget's response was that the Expedia price is a contracted price and that doesn't count for a match. So I cancelled the Budget reservation.

It's LNF - Look No Further. It's Marriott's guarantee that they give the lowest web price on their web site. These price match guarantees are not what they appear to be.

It would be very invalid to compare your experience with other travel price matching programs to Marriott's LNF program. Anyone who is good at bidding research would excel at the Marriott program (and not over 2 cents either). Read some of the successful LNFs on other parts of this forum and you will see that this is a very viable channel. I recognize many opaque specialists in the LNF threads these days (seems to be a much better use of our pricing knowledge and research in some cases). The further 25% discount is of major importance. I just want to point out options to those frustrated by Priceline instead of deviating from the main part of this conversation.

Rasheed

My own personal use of Priceline's NYOP (for hotels) has fallen dramatically in the past 12-24 months, thanks in a very large part to Marriott's LNF program. Like Rasheed, I've scored a number of near-Priceline NYOP prices with their BRG program. My next Marriott stay is in Vancouver (4* property) with a $122 LNF rate I secured several months ago. And that's for no advance purchase with a 24-hour cancel policy. As the stay draws nearer, I've been bidding Priceline to see if I could beat the rate, but so far no bites up to $115. I'll probably just stick with the LNF rate, gaining Marriott Rewards credits in the process.

I play most all the BRG games (Marriott, Hyatt, SPG, IHG) and have the best success w/Marriott.