Be careful. The auction part of the side is what it is. If you understand how it works, I don't think it's a scam. Sort of like gambling since your bids cost you real money.

If you lose the auction then the only way to use the money you spent on bidding is to book a room through their hotel booking site. You should know that if you see a cheaper rate elsewhere - including on their own site - you have to point it out to them 3 full days before your reservation starts or you're out of luck. Asked customer service if they'd at least give me the last 2 days of our reservation at the lower rate, since that was 3 days out but all I got was no. So, take that into account when booking through them. You're locked in 3 days out. Better off booking directly with your hotel if you ask me.