The Wonderful World Of Priceline

This is an updated version of a blog I posted on another forum a few months ago.

I have long been an enthusiastic advocate of Priceline. (Priceline, if you are reading this and are in the market for an attractive new sidekick for William Shatner – I’m your woman :)).

I like Priceline for three reasons. Firstly, I get fantastic bargains through it and am able to stay in hotels I couldn't usually afford. Secondly, I enjoy the research, detective work and strategic bidding that go into getting a bargain. Finally, I love the suspense and thrill of seeing what I end up with.

Briefly, for anyone who doesn't know, Priceline is a travel website just like Expedia that provides the additional option of bidding for hotels, flights and rental cars. It enables you to get them at up to half off the going rate. However, this blog will be concentrating exclusively on bidding for hotels.

How this works is that you choose an area of a city and a star level and then make an offer. If it is accepted, you are allocated a hotel in that area and of that quality. You don't get to choose a specific hotel.

Priceline has utilised market segmentation to great advantage. People are willing to pay a premium for a hotel they have stayed in before, or is part of a chain with which they are familiar and have status, or is at a precise location. Hotels will charge as much as they think people will pay. However, they generally have rooms left unsold, which they want to offload, but they don't want offer huge discounts that undercut their going rate. Priceline is the perfect solution for them as they can sell the rooms at a small profit to people willing to buy "blind", without compromising their full rate business.

I know some people are very nervous about bidding on Priceline because they are worried about getting something awful. However, investing in a little research and planning will ensure you get something that at the very least is acceptable and great value, and at best, amazing.

Some cities are better for Priceline than others. What you want is a city that is divided up into lots of small areas so you can target your hotel location quite precisely. Big cities like London and Chicago are good for this, small cities like Santa Fe are not. Secondly, you want to ensure that there is quite a narrow price span for the star level you want to bid for. I discovered that Madrid was not a good candidate for Priceline. 4 star hotels there can range from $80 - $400 a night so you are in danger of bidding more than the going rate for the hotel you actually get.

I would not recommend Priceline for anything less than 3 star hotels. For 2 star and under, the quality varies widely depending on the age of the hotel and you are better off choosing a particular property. Plus, these hotels are operating on much lower margins so cannot offer the deep discounts that more upscale hotels can.

So, you know what city you are going to, you know what area you want to stay in and you know what star rating you want. What price do you bid? Check out the going rates on Expedia, Travelocity etc. then take off at least 50% and bid that amount. Also check out Hotwire. Like Priceline, Hotwire sells blind and you only find out what you have got once the transaction is completed. However, unlike Priceline, there are set prices. Look at their prices and then shave off a few more dollars for your bid.

You can only make 1 bid for a particular area/rating in a 24 hour period so try and start well in advance, bid low and don't get panicked into offering more than you need to.

My advice is to ignore a lot of the advice that Priceline gives you. For example, they will say that the more areas you bid for in one go, the better your chances. I say, make a bid for just one area. If that bid is rejected, you can immediately go back and add a second area (if that is acceptable to you) raise your bid and it will search the second area and also re search the first one. If you bid on all in one go and it is rejected, you will have to wait a day before you can try again.

Ignore the little warnings that come up saying "based on recent data your bid has little or no chance of being accepted and you should consider increasing your offer". Also, if your bid is rejected but they say that if you increase your offer by $20 they have a guaranteed hotel for you, take no notice. These are all little ploys to make you pay more than you need to. Patience is key. If all is rejected, you can always come back the next day.

Do be creative in your thinking. This past July I went to New York City for three nights, arriving on a Saturday. Saturday is a premium night in a city like New York ie. Expensive! Sunday is a universally cheap night for hotels and Monday is variable, depending on how much they cater to business people. I could not get a four star hotel within my budget for the three nights because the Saturday night was skewing the prices so I split my bid.

I got the charming Benjamin hotel in Midtown East for Sunday and Monday for $120 plus $26 in taxes and fees per night and then went back and bid for a three star in the theatre district for the Saturday night. I ended up with the well appointed boutique Hotel Mela just off Time Square for $100 plus $25 in taxes and fees. Even with the fees, I got both these hotels for slightly less than half their advertised internet rates.

Caveats:

Your credit card is charged in full at time of purchase and there are no refunds. You can purchase cancellation insurance for $5 a day but I never have and I believe it has a lot of restrictions.

The person who books needs to show their ID and credit card when you check in, so if you are booking a room on behalf of a friend/relative with whom you are not travelling, you will need to use their name and card details in the booking process.

The booking fees are higher than when you book a hotel the regular way through a travel site, so you need to factor that into your calculations.

Seasonal availability will affect how great a discount you will get. Don't expect to get anything in a major city on New Year's Eve!

Here are a few examples of the wonderful bargains I have got through Priceline over the years:

The Wyndham St Anthony Hotel, San Antonio, 4 star. Going rate at the time was $120 and I got it for $60.

Hotel Monaco, San Francisco, 4 star. Going rate at the time was $160, I got it for $80.

Le Meridien Piccadilly, London 5 star. I paid $130 and was put in a suite that the desk clerk said usually went for 350 POUNDS!

Eaton Hotel, Hong Kong, 4 star. The going rate was about $150 and I paid $70.

The Hilton London Olympia at $90 was the most uninspiring hotel I have got through Priceline. Supposedly 4 star but quite shabby. Unfortunately, unless you go 5 star, London hotels tend to be very worn, with tiny rooms. But, I would rather pay $100 for a worn hotel than $250. The last two years in a row I have stayed in two different four star Marriotts in the Regent's Park area for $115 and these were much more spacious and nicely decorated than what you can find in the Mayfair/Soho area.

St Martin's Lane Hotel, London, 5 star. I can't remember the going rate but I got it for $170. Cool Philippe Starck design, but the hotels in this chain (which includes SF's Clift) are just a little too pretentious and pleased with themselves.

Double Tree Resort, Key West 3 Star. Hotels in Key West are so incredibly expensive! I got this for $130 and was upgraded to a suite so it turned out to be a great bargain.

www.priceline.com