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A clear view of ‘blind’ travel sites

A clear view of ‘blind’ travel sites

Old Dec 18, 2003, 2:50 pm
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A clear view of ‘blind’ travel sites

Consumer Reports, Jan 2004 issue:

A new study by Consumer WebWatch, a grant-funded project of Consumers Union, looks closely at Priceline.com and Hotwire.com, “blind” travel Web sites that promise great deals and big savings but keep you guessing until the last minute about which airline, hotel, or car-rental company you’ll use. The study’s conclusion: These bargains may not be worth the trade-offs.

The WebWatch study, involving 135 side-by-side comparisons with “open” sites such as Expedia.com, Orbitz.com, and Travelocity.com, found that the blind sites provided the lowest rates no more than 53 percent of the time. But the blind sites also have some major drawbacks:

• The sites charge booking fees.

• Reservations are nonrefundable.

• The sites usually don’t allow you to earn frequent-flyer or guest points.

• Priceline.com, alone among these travel sites, may require you to change your departure or arrival dates, airport, hotel location, or type of rental vehicle before it accepts a bid.

<more details in the article>
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Old Dec 18, 2003, 2:53 pm
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http://www.consumerwebwatch.org/news/opaque/index.html

study link
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Old Dec 19, 2003, 10:10 am
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I'm glad somebody took the time to do this. I have friends who have never even tried travelocity or expedia. They just head to priceline everytime, naively thinking they are getting a great deal!
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Old Dec 19, 2003, 11:12 am
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I read the article, but they don't seem to be specific about a very important factor: How did they decide how much to bid on Priceline? I don't see how they can make comparisons without specifying that.

All I can say, after using Priceline many times, is that if they got better deals on Hotwire than on Priceline in many cases, then they were probably bidding too high on Priceline. But you can't figure that out precisely from what they say.

Ed
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Old Dec 19, 2003, 11:12 am
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Well the way I read page 26 is that Hotwire and Priceline combined provided the Lowest Rates for Hotel Tests - 83% of the time. Providing for an average savings of 24% (Hotwire) to 16% (Priceline.)

Quikbook had another 13% of the Lowest Rates.

Why would anyone use Orbitz, Travelocity or Expedia to book a hotel?
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Old Dec 19, 2003, 11:13 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by yorock:
I'm glad somebody took the time to do this. I have friends who have never even tried travelocity or expedia. They just head to priceline everytime, naively thinking they are getting a great deal!</font>
I ALWAYS check travelocity and expedia, among other web sites, and I ALWAYS get a better deal -- usually, MUCH better -- on Priceline.

Ed

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Old Dec 19, 2003, 11:37 am
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The authors of the CR study had their heads up their tuchuses. For one thing, they did not say what bidding strategies they used. A reasonably well-informed bidder ought to be able to easily save 50% or more on hotels using PL and not just 16%. Moreover, they never heard of biddingfortravel.com which qualifies them as online-bidding newbies.
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Old Dec 19, 2003, 11:54 am
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Using opaques without at least a cursory investigation of what transparent channels are providing is like chucking money down a Porta-Pottie.

It's not surprising that naive users have made Priceline's hotel operation ridiculously profitable. People think half off "retail" is a good rate for a hotel (think about the Entertainment! card discounts, half-off promos from FF programs, etc), and PL's "retail" pricing has been shown to be widely inflated (there's discussion here and at other bidding strategy sites). The messaging and marketing by Priceline is downright misleading (the infamous messages that your bid is far too low to possibly be accepted, so how's about raising that $10, huh?). People get caught up in the heat of bidding and keep raising. They bid too soon...there's just a zillion variables.

That said, I've spent a lot of time on this (literally dozens of stays totalling hundreds of room-nights), and I save a lot of money using PL - there's a property I stay at regularly where I get a PL rate of $32 and the negotiated corporate rates for a few major companies nearby are $109. The lowest non-opaque rate I see for this property is usually $89.

I use Hotwire when I can't get PL availability, and as a last resort, I go to other channels. But, with a bidding strategy, some recon, and an elementary knowledge of how PL accepts bids and hotels manage inventory, I honestly cannot see how an informed user can't beat direct booking or Orbitz/Travelocity/et al by at *least* 35% off their lowest displayed price, even taking into account booking fees (note that since taxes are a function of room rate, in some high-tax areas, the difference in tax between a PL bulk rate and a published rate that is only $20 higher can more than make up for the PL-assessed "booking fee", even on a single-night stay).

Eric
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Old Dec 19, 2003, 12:58 pm
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In general, I agree with the premise of the article: specifically, Priceline and Hotwire typically yield the lowest cash cost, but not necessarily the best value.

For flights, Priceline has never been an option for me because I don't take Priceline-candidate trips (e.g., flights where I truly have zero opinion about when I fly, what airline I use, and what route is used to get me to the destination). Therefore, I've never even reached the question "Is it worth giving up FF miles/perks to save X dollars?"

For rental cars, I've simply found that Priceline usually can't beat the best combinations of corporate/promotion codes at one or more agency sites for most normal rentals. (Priceline's niche, IME, is specialty cars and the specific rental lengths that aren't well-supported by the agency sites, such as 5 days, 9 days, etc.)

That leaves hotels. I think we all agree that this is where Priceline has the big potential to save us some serious cash in exchange for giving up hotel points and perks. But just like a well-informed bidder can get the perfect Priceline win, saving 50+% off of the points-earning rate, a well-informed user of the other travel sites (both booking sites and research sites like FT!) can frequently find deals that are competitive with Priceline in terms of overall value.

For example, I have an upcoming stay in an area where 3* hotels cost $44 (give or take a couple bucks) + $6 fee on Priceline. There's my opaque baseline: fifty bucks for a perfectly acceptable Courtyard or Sheraton.

Then I go to Expedia and Travelocity and find their advance-purchase rates for similar hotels for $69 for a similar hotel. $19 more to lose the "opaqueness", but similar no-cancel and no-points rules. Priceline is still better.

Then I drop by FT and notice new thread about 5000 AA miles with a Sheraton stay. Hmmm. Then I browse the Marriott board and see which Promotional Codes are allowable for general public use (e.g., M11, M12, etc.).

Finally, I find an $84 room at the Sheraton that would quality for the 5000 miles and I find a $74 1-bedroom suite at a Residence Inn on a "Holiday Promotion" rate that includes free breakfast, evening cocktails, a 6PM day of arrival cancel policy, and Marriott Rewards points.

In this case, Priceline is clearly a distant #3, or perhaps #2 if we assume that the Average Joe doesn't value 5000 AA miles like we FT'ers do.

The point is: you have to investigate all avenues for all stays if you are truly concerned about best overall value. If Consumer WebWatch didn't do this skillfully for all sites involved, their statistics don't really mean much - even though their overall premise has merit.
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Old Dec 19, 2003, 1:48 pm
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I read that article to mean PL/HW got the best rate only about 55% of the time! Perhaps I misread it, I don't have it in front of me.

I also read it so say that between opaque sites, PL was best only about 2/3rds of the time. It surprised me to learn that HW beat PL ever. I have not had that experience. Some clueless CR editors is more plausible.

Interestingly, they did not mention the importance of sites like BFT.
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Old Dec 21, 2003, 2:45 pm
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I've used Priceline for over 200 hotel nights all over the world (USA, CDN, UK,Europe,and Asia) and I have only been able to get a better rate in Sydney Australia on another site other than PL.
PL has consistanly beatten all other sites.
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Old Dec 21, 2003, 2:53 pm
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Hotwire rocks with hotel rates. You know what you are paying before you give your CC information--a major differnce than how Price Line operates.

Airfares on Hotwire tend to be a lousy value unless you have to leave the next day and the airlines want to charge you 4 figures.
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Old Dec 21, 2003, 3:31 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
Hotwire rocks with hotel rates. You know what you are paying before you give your CC information--a major differnce than how Price Line operates. </font>
With Priceline's new tax/fee structure that went into place a few months ago, they now show you the total price on the final bid confirmation page.

I agree that PL can usually get better rates than HW, but HW does have one potentially significant leg up on PL: you know the amenities of the hotel you select. Knowing that my room will have a kitchenette, or that the hotel has a workout room, can be a big deal on some trips. For folks doing summer travel with with kids, I imagine knowing that a property has a pool may be essential.
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