sylvia hennesy

I got 50% less than the retail, RT, Den-KOA the other day; impulse buy/opportunity. If I had taken the first "offer" instead of waiting a day, it would have been almost 60%.
But, I'm sure it wouldn't be so great if it wasn't last minute.

rasheed

You are in the right thinking, but we cannot promise that Priceline wont change things around. Those who have been around long enough know this is what happened in the hotel product (bundling) when people were too smart in understanding local tax rates and figuring out the exact price.

My thought is that air ticket pricing laws prevent the same situation from happening, but I cannot be so sure.

I have already started to see taxes/fees over $50 for domestic routes when I start a bid, so something strange is happening already -- maybe even from this discussion.

Rasheed

rasheed

To help strengthen the importance of NYOP air, on the Earnings Call for Priceline, it was stated by the CFO that the growth in number of air ticket sales (they do not break out NYOP versus retail I believe) was "mainly from strong growth in Name Your Own Price airline tickets". Interesting stuff.

Read it here: http://seekingalpha.com/article/2682...all-transcript

Now, air ticket sales (retail and NYOP/opaque) are way smaller than hotel sales (retail and NYOP/opaque). I think that is driven by inventory issues (higher retail prices, ability for airlines to sell seats without going to opaque), but I think Priceline does not advertise this product properly for the potential it could get for flexible leisure travelers.

I also believe that demand drives opaque inventory. I think hotels are the best proof of this response. The fact that millions of rooms are booked via Priceline drives suppliers to use that as an important channel for bookings at all times. For example, even during peak times (high retail prices), suppliers still make rooms available on Priceline opaque down to the last room available (I have seen bids accepted for hotels that even had a sold out listed on their own website before the bid). Even if the opaque price is significantly higher than the lowest bidding strategies, they are still a significant savings from the retail options. I do not know if this was necessarily the original business case for providing inventory to Priceline.

The more people bid for tickets (successful or not), the more airlines pay attention. I am not sure if many of you have seen the failed bid report that hotels get, but it indicates what people are willing to pay in those fail bids for that region. I am sure some of the lowballing data is useless, but bids that might be okay for them to consider in the future may result in some inventory being made available at those lower price points. I think the same could be said for airlines if they had more data points to review for city pairs and what people are willing to pay.

Rasheed

rasheed

I just got the transcript and read over the SEC filing for the latest on Priceline happenings in the NYOP space. Here are the notes:

Good news:
"Growth in opaque air tickets again helped the domestic top and bottom line as airlines used the opaque channel as a revenue management tool while they increased fares." (which is what I have said happens in a rising retail fare environment)

"Airline tickets booked were up by 7% in the quarter, resulting mainly from strong growth in Name Your Own Price airline tickets. A 4% increase in average retail ticket prices also contributed to gross bookings growth. Opaque rental car performed well due to improved access to discounted rates compared to the first quarter."

"The other thing that I would mention, though, is I think our air team at Priceline.com has done a very nice job of continuing to build the position and relevance of the opaque product, so that when airfares are going up like they have, the airlines, I think, are using the product as a tool to revenue-manage and keep their loads up as prices are going up. And that's worked well, I think, for the airlines, but it's also worked well for our opaque business."

(However, I will not give credit to the NYOP air team at Priceline. From the awful false paper ticket fees pricing upfront, the lack of options on first bid, and the lack of promotional support to help people maximize this service -- any growth here is from people who are very comfortable with NYOP and not from casual travelers who want to see if they can improve upon a potential retail purchase while Priceline is already facing a reduced conversion rate.)

Bad news:
"Name Your Own Price hotel room night growth decelerated, likely as a result of competitors' initiatives in the opaque hotel arena."

http://seekingalpha.com/article/2848...all-transcript

More Bad news:
"AirTran has participated in our Name Your Own Price® system on only a limited basis, but Southwest Airlines has never participated. In fact, Southwest Airlines does not currently distribute airline tickets through any online travel agent or permit its fares to appear in comparative fare displays. If AirTran fares are taken out of the online marketplace as a result of this acquisition, those fares would no longer be available to us. Similarly, United Air Lines has historically participated in our Name Your Own Price® system at a high level, while Continental Airlines has historically participated at a much lower level."

http://sec.gov/Archives/edgar/data/1...14037_110q.htm

The United issue is very important. UA has made significant unsold inventory available to NYOP while CO has made last minute fare reductions (G class inventory or similar) on their website to fill rather than move it to an opaque channel. If CO management is in charge of revenue management (I have not followed the merged family tree as yet) at the new UA, this could be a huge pinch in potential seats available for NYOP use.

At some point, Southwest has to figure out how to maximize things, and I cannot believe at this point not being at least listed on some sites long-term is the way to go (despite all of their advertising). It is known that Priceline will bypass the GDS for any airline who requires it, so I do not see Southwest having to become a GDS airline -- instead just offer a direct connect to other websites who want to offer the Southwest fares. I know other websites will do whatever restrictions/advertising necessary to offer the fares (including differentiating its free bag policy).

I think Southwest could benefit from NYOP, but it is just not in their current mindset I guess.

Summarizing, continue to consider NYOP when fares are high as there are people who are booking such hidden fares, and it is GROWING.

Rasheed

BEAV

Very interesting read and thanks for posting.

I actually had the occasion to use NYOP for airline tickets a few weeks ago when a co-worker needed to fly cross-country immediately due to a death in the family. Although the savings only amounted to about 20%, it took a little sting off the $900+ price of a last-minute, conventional ticket. Flight times/connections were quite decent, and despite the comments about CO not releasing a lot of NYOP inventory, he was assigned flights on CO!

dakam

Wish I saw this thread before bidding...now I'm thinking that I could have started with a new lower bid for 6/14 (my original bid was for a 6/15 departure)....every little bit counts. This is part of thread I started a few days ago...when I bought my priceline flight. I'm wondering how much I should have started to bid on a 6/14 departure. I jumped on this one b/c previously the counteroffers were about $20 more for each tix.


"LAX to HNL for 6/14-7/4 for $573 AI, times 5 tickets.
Been watching this flight since October and it has only gone up. My fault for not buying back then when it was at $600, now the $700 range has been making me ill, so I took a chance on PL, traveling one day earlier than we wanted and I hate that we're not going to earn any miles on this...and I'm going to be pounding my head against the wall if there is an outrageous summer fare sale that's going to be announced in the next month. We're used to the fare of yester-year (sub $400), and the last few times we flew that route were on BA and AA miles.

On United, nonstop and the flight times are actually ones we would have picked for ourselves...I hope we did okay."

dakam

Does an L class fare on UA earn miles? I'm sorry if this is a newbie question...I don't trust my own web search skills (I thought I saw that it does earn 100%).

Looks like L class fare earns mile, but maybe by booking opaque PL flight...I won't be earning those miles? Still worth updating our MP# for the flight, just in case it does go through...right?

jabez

dakam
Never expect miles,points, etc. when booking through a third party.

dn4192

Okay I have never purchased an airline ticket via anyone but the airline directly. I don't fly that often, maybe once a year. this coming Aug I am wanting to fly from Indianapolis to Philly, leaving out on a friday to return the following WED. Right now I am looking at RT tix being about $260 the chepest, what are the odds/chances of getting anything cheaper then that via this NYOP method on Priceline? It wouldn't matter to much when on those days I flew, and don't care about points or anything, just looking to fly the cheapest possible.

6rugrats

UA will not give you mileage for these "name your own price" tickets.

rasheed

In the old Ua Mp system, you would definitely not get miles with a Mp number on a NYOP bid. In the new system, not sure. Someone who has gotten Co miles before might be a better source on a NYOP purchase.

So, don't count on it, but you might get lucky.

Rasheed

rasheed

Apparently Priceline's NYOP opaque air product now has Spirit Airlines as an option. Please be very careful when bidding a route where Spirit is possible, you will likely be overpaying for something not very ideal.

It is not in the FAQ/help for Priceline, but now shows up for destinations where they offer you a special air+car package (no flight time selection).

Rasheed

Romelle

I agree with your advice. It falls under the first rule of Priceline bidding - Know What Your Next Best Alternative Is.

Romelle

dakam

I think it must have been b/c of the UA/CO merger...but we all earned miles on this flight (DH even earned some type of booking bonus that I probably signed him up for). Just not sure if they'll be taking them back at some point?!

rasheed

Just an update of the list of partners can be found here:

List of Partners FAQ

I also got a Hawaiian Airlines flight recently as part of a UA NYOP itinerary, so I still encourage people to try a bid when retail is much higher than lowest retail for that route.

Some carriers are no longer listed by the way (and some are new).

Also, people are trying for NYOP, but Priceline is having difficulties in fulfilling requests because of tight inventory (flights are already full). We have known this problem for awhile, cheap seats are hard to find.

http://seekingalpha.com/article/5756...pt?part=single

Because of how they treat opaque revenue and the reduction in that revenue, this likely accelerated their new express hotel offering (show prices first with no bidding). This product does exist for air by the way (it is the air plus car packages you see at the top of the retail results pages).

Rasheed