Assuming you are asking about Priceline's Name Your Own Price service, I think the process works like this:

1) Hotel loads private Priceline rates into the Worldspan GDS

2) Customer makes a bid.

3) PL's system finds a compatible rate in Worldspan and grabs the room

4) PL immediately charges customer's credit card for room+taxes+fee (including PL's profit)

5) PL immediately sends electronic payment to hotel's bank account

Since the reservation is already paid for, if the guest no-shows, the hotel keeps the payment.