The hotels (and Priceline) also have to consider elasticity of demand -- in other words, some consumers simply won't pay to stay in a hotel for certain occasions unless they can get it at a price below some (very low) threshold. These are not customers who would have paid the full rate anyway, but customers who would never have bought the room without Priceline.

In my case, there are certain situations where it is convenient but not absolutely necessary for me to stay in a hotel; and for those situations, I can accept the few inconveniences of using Priceline (including "opacity," non-refundability, and the possibility of not even making a successful bid) in exchange for a super-duper-low price (in my few experiences, about one-third to one-fourth of the absolutely cheapest rate otherwise available on the web -- in other words, discounts of 65 to 75%).

I suspect that as time goes on, the rates available through Priceline may gradually creep up, while remaining good bargains. I gather to some extent this has already happened (fewer bonuses now, for example).

Kathy

[This message has been edited by KathyWdrf (edited 04-09-2002).]