<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by hedoman:
There have been many rapid changes in all sorts of industries the past two years. Why cry about programs increasing the cost of a free room, especially when you were smart enough to use the rewards? I think we're lucky to have the Priceline alternative in 2002/2003. I really don't expect the same deep discounts to be here in 2005.
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Just curious: what makes you think that the Priceline model will go away? From what I can tell, more hotels are making inventory available to Priceline every day.
The one thing that I believe will happen is that Priceline rates will creep up as the economy grows. As room supply and demand starts to move back into balance, hotels won't be as eager to dump excess inventory for quite so little in return. And I can see where bidding certain zones will be very hard in a bull market. (For example, I got a $65 three-star room on a Tuesday night in Silicon Valley earlier this year. In a strong economy, bidding that zone for a midweek stay might not be possible.)
But even in 2 or 3 years, hotels will still look to discounters to dump weekend rooms or rooms at other off-peak times. The cost will creep up, the availability may creep down, but Priceline will still be a win-win for hotels with excess capacity and travelers that are a little more flexible than most.