The platform allows travel companies to fill unsold products. Granted, the prices are discounted. But some revenue is better than nothing.
Just as travel companies must make some sacrifices, budget travelers determined to use Priceline also must resign themselves to the advantages and disadvantages of bidding for unseen services that might not fit their needs.
Priceline Pros and Cons
It's fairly simple: You punch in dates for round-trip travel and how much you would like to pay. Sometimes airlines will accept your low bid because they face the prospect of an empty seat and no revenue. You can buy up to eight tickets for each trip. If you're rejected, you may try again at a different price or for different dates and destinations.
The downside: You cannot collect frequent flier miles, and you can be assigned any flight between 6 a.m. and 10 p.m. of your chosen day. Once Priceline picks your flight at your price, your credit card is charged. No changes. No refunds for any reason.
On hotels, Priceline now allows you to try again at a location where you've failed to land a room after 24 hours (the limit was once 72 hours). Re-bids are allowed immediately if you're willing to change dates and locations within a market.
Clearly, the people happy with Priceline's approach outnumber those with complaints. But finality is the sticky part of the equation. That is one place where scores of new competitors are making changes to the model.
Variations of the Priceline Model
The airlines themselves grew tired of webmasters filling their empty seats. In an unprecedented move, six majors formed Hotwire.com. Here, you get an answer to your price inquiry almost immediately. As with Priceline, you choose dates and destination areas and Hotwire provides options at various price levels without revealing vendor names. Unlike bidding on Priceline, you are under no obligation to buy. Same-day purchases are allowed on airfare, hotel, vacation packages and rental cars. For rental cars, however, the search must begin at least two hours prior to pick-up time at the desired rental location
There are the "old-fashioned" Internet auctioneers who sell to the highest bidder only. eBay is famed for this, but other auctions are growing. The attraction here might be variety: A routine search revealed no less than 458 lodging auctions, 254 separate auctions for timeshares, 644 for travel books and a whopping 1668 for travel tickets.
There were several other online travel auctions that tried to copy the Priceline model or at least modify it. They failed. In some cases, they didn't have the financial muscle to survive. In others, the consumers simply never found them in cyberspace. Hotwire survived as a strong challenger. Many others did not.
Getting Stuck in the Web
Some budget travelers will wind up unhappy with these ventures, just as they have with Priceline. A few will blame the trouble on deceptive advertising, surly service or print that is too fine.
In many of those cases, the real culprit will be a hasty mouse finger.
The nature of these deals requires speedy decisions. That is both their blessing and their curse. A customer who buys before understanding the rules will regret logging on that day.
The problem is that many of these new sites are very similar. Consumers get lulled into a secure feeling because they've mastered one, and therefore assume they understand them all.
Next, take a look at some major differences between competitors, because missing any one of these nuances could cost you money.
Opaque Pricing Outside Priceline and Hotwire
At one time, there were at least a dozen opaque pricing sites beyond Hotwire and Priceline. Most no longer exist, perhaps due in part to the merger and acquisition process so common in the online travel industry.
Travelocity made a big splash with its Top Secret Hotels offerings, which would appear atop destination searches. It's gone, but a former sister site, Lastminute.com still uses the concept and the trademarked name. Sabre once owned both Lastminute.com and Travelocity, but each was sold and it appears Lastminute was the place of choice for the franchise to land
Similar to the procedure for Hotwire, Top Secret Hotels asks you to pay a certain price for an unknown property, although you're given a description of amenities and general location. They'll show you a "regular" price and the sale price. A map will outline the zone in which the property is located. Purchases are non-refundable.
Booking.com once had a "Hidden Hotel" feature. It is now a part of the Priceline family of sites. But HotelDirect.co.uk offers an opaque service for four- and five-star hotels called "Hidden Gems."
Getaroom.com takes a slightly different approach. They ask travelers to call them "for secret unpublished rates" if an attractive price doesn't appear.
It appears ambitious plans to dethrone the leaders in this area tend to fizzle. Many times, they simply can't acquire the daily inventory of rooms available with the established opaque companies. Whatever opaque pricing option you choose, don't assume it's similar to other options you've tried. Read the terms carefully.
Opaque pricing options appear to be well-established, but as we've noted, upstart challengers often fail. Hotels, car rentals, and airlines aside, which services are most likely to try this approach?
Be aware that options like this will come and go, but the smart budget traveler considers opaque pricing only in certain situations and as part of an overall strategy. Above all, the most important consideration for these purchases is a thorough knowledge of the rules.