Booking Holdings is still making considerable money from Priceline.com's bidding service for hotels. But the service has outlived its usefulness, and will likely fold within a year or two. Take a look at how Priceline.com markets other ways to book hotels on its site. Enough said.
Priceline.com ended its Name Your Own Price bidding service for car rentals Monday, as it did for flights in 2016.
When Priceline.com debuted more than 20 years ago, it was the only way you could book a flight on the site. Users would specify when they wanted to fly and submitted a fare they would accept, and then Priceline.com would approve or reject the bid. The customer would only find out the identity of the airline if Priceline accepted the offer.
With the demise of Name Your Own Price for flights and cars, customers can opt to use Priceline’s Express Deals feature, which presents discounted rates with no bidding required. Customers learn the name of the airline or car rental company only after they book the deal.
For now, there are no publicly articulated plans for Priceline.com to end Name Your Own Price for hotels, which is a larger business than was the bidding feature was for flights and car rentals.
“Priceline isn’t going to speculate publicly on the future of Name Your Own Price for hotels,” said spokesman Devon Nagle. “There are no plans to sunset it for hotels.”
But the handwriting is on the proverbial wall because, in many ways, the online booking and competitive environment have overtaken Priceline.com’s Name Your Own Price for hotels.
Travelers who are looking to book a room for the night when they are leaving a bar or when their plans changed last-minute, these days are used to finding a hotel option quickly. They don’t have the patience for submitting bids, waiting for an answer, and resubmitting bids with the inefficiencies inherent in tapping around on mobile devices.
Name Your Price Promotions Have Gone Missing
Priceline.com’s homepage basically confirms that premise, although not explicitly. For example, the homepage on Monday offered an an ad atop the page touting Express Deals where consumers could save on “Hotels up to 60% off.” Name Your Own Price promotions were nowhere to be found on the page other than in small type at the bottom of the page.
It is noteworthy, too, that Express Deals offer discounts of up to 60 percent these days. When the search launched several years ago, the company touted maximum discounts of 45 percent — the larger discounts were the reserved for the Name Your Own Price feature.
The mobile revolution, including the advent of apps such as HotelTonight, which facilitate discounted hotel ratings in a few taps, have also made the Priceline.com bidding process for hotels virtually obsolete. Who needs to deal with placing bids, having them rejected, and then offering new bids with altered parameters — such as in a different section of a city — and all on a mobile device when you can book hotels from other companies without all of the hassle.
In addition to Express Deals for hotels, Priceline.com also offers mobile-only Tonight-Only Deals, which shows the name of a handful of hotels and the discounts up-front for deals that way.
Commenting on the demise of Priceline.com Name Your Own Price service for car rentals, Brian Harniman, who worked on the service when it launched in 2000, said it confirms that the retail market — namely published rates for car rentals — “is preferable for Priceline’s users.
Priceline.com’s sister brand, Rentalcars.com, “provides global coverage and competitive rates,” said Harniman, who is managing director of advisory firm Brand New Matter.
Harriman argued that there was no sense for parent company Booking Holdings to operate a published model and an opaque model such as Name Your Own Price, when the car rental commissions were comparable.
“Lastly, there’s probably a hint of Lyft and Uber usage creeping into this space that makes Booking Holdings want to be as efficient as possible with regard to personnel and development costs,” he said.
Harniman, though, believes the bidding service in hotels has some staying power.
“I think there’s still a small, loyal base here,” for the Name Your Own Price service for hotels, Harniman said. “Operating the product might also allow them to bid on more keywords with multiple listings — so even if people don’t buy a NYOP hotel, they slide into Booking.com’s retail products.”
Sam Shank, the co-founder and CEO of a competitor, HotelTonight, thinks Priceline’s bidding service is anachronistic.
“Making consumers choose blindly to get a deal is a gimmick that’s no longer relevant,” Shank said. “In a mobile world that increasingly books last-minute, the specifics of what you’re booking matter — is there a rooftop bar that looks fun? Will it be open when I arrive?”
The whole “experiences” trend comes into play, Shank believes.
“Today’s booker isn’t looking for a commoditized roof over their head,” Shank said. “They’re seeking unique and memorable experiences.”
Meanwhile, Suzanne Markham-Bagnera, a former hotel general manager and currently an clinical assistant professor at Boston University’s School of Hospitality Administration, said Name Your Own Price served hotels well, but has outlived its usefulness at a time when most large hotels are pushing direct bookings.
“Indeed this model has served well for a long time, but as frequently noted, the bidding process is time-consuming and guests are looking for speed in addition to the continued rise of last-minute booking options,” Markham-Bagnera said. “I would anticipate the shelf life for the NYOP option would soon be phased out as the speed for which an Express Deal option exists.”
As with Name Your Own Price, she said, with Priceline’s Express Deals, the brand identity “is masked until booking so that the large brands would still be able to play in the sandbox and continue to use Priceline as a distribution channel.”
The Daily Newsletter
Our daily coverage of the global travel industry. Written by editors and analysts from across Skift’s brands.
Have a confidential tip for Skift? Get in touch
Photo credit: William Shatner used to star in Priceline.com's ads for its Name Your Own Price service. He's shown here several years ago with actress Kaley Cuoco in a Priceline.com advertising campaign. Priceline / Reuters