Originally Posted by yyzlhr
As a General Manager for a London hotel I will give a quick way it works.
A hotel gives a net price to Priceline this price is at least 30% below rack rate--- in my experience we reduce price to Priceline by 50%. If someone bids for a £X.00 for a hotel , four star, downtown, etc Priceline will allocate a hotel that meets the criteria and they still manage to get a margin themselves which would be at least 10% (standard travel agency commission in NA). If more than one hotel meets that criteria the hotels with the similar rates, location etc will rotate on who the reservation will be allocated to. Hotels give an allocation of rooms for each day to Priceline so even though a hotel may be full on their website Priceline MAY still have their allocation remaining. Once a booking is made with the hotel the hotel immediately charges a Priceline credit card and regardless if the guest shows or not the hotel gets their money.
A hotel may lower thier rate at anytime to Priceline-- they also may increase their allotment. Therefore last minute bookings could result in a better hotel and a lower than anticaipated price.
Thanks, that is very helpful. I knew that sometimes sold-out hotels can still give out Priceline rooms, and that helps explain it.
Do you know if the 10% margin can include the service fee that is bundled in with the taxes? I, and other posters, have sometimes seen Priceline's rate charged to the hotel (or what looks like it) and often there isn't a 10% margin based on our bid and the taxes alone.
Is the 30% below rack rate a hard and fast minimum discount requirement?
Do you only provide Priceline one single rate, or do you have multiple rates?
Please don't feel obligated to answer. I can understand if you feel that it would give too much away to say.