With the economy slowing in Europe, Priceline is talking about the possibility of marketing those floors of unoccupied hotel rooms through a new name-your-own price auction service in Europe. At Priceline.com in the US, consumers have the option to place a bid on a flight, hotel or car-hire, and if accepted, they then learn the…
Priceline plotting online auction system for Europe
With the economy slowing in Europe, Priceline is talking about the possibility of marketing those floors of unoccupied hotel rooms through a new name-your-own price auction service in Europe.
At Priceline.com in the US, consumers have the option to place a bid on a flight, hotel or car-hire, and if accepted, they then learn the brand of the supplier. Consumers specify the location and star-rating of the property and the price they would pay.
Hoteliers and other suppliers can unload distressed inventory without taking a hit to their brand.
For example, this reporter recently placed a bid on Priceline.com and successfully got a night at the Hyatt Regency in Tampa, Florida, for $55. The retail rate for the stay was $199.
Priceline.com chief executive Jeffery Boyd said the company might contemplate starting such a service in Europe next year.
“We have name-your-own-price hotel inventory in Europe and in some other international destinations, which we sell to US resident customers and we also use it in our vacation package products so we are in that business right now,” Boyd told financial analysts Nov. 6.
“We also at Priceline.co.uk have the ability to sell UK point of sale opaque hotel. It is not something we have invested a lot of time or money in.”
“Given the marketplace there may be some more demand on the supplier side of that and certainly the consumers are looking for bargains, so I wouldn’t rule that out as something we might get back into and invest some more time into next year but it is not something we are doing right this minute,” Boyd said.
One thing that certainly is on track is Booking.com’s growth in Europe, including Eastern Europe, and elsewhere internationally, officials said.
“The fact we have had a little bit of a slowdown doesn’t change our strategy at all,” said Priceline chief financial officer, Robert Mylod.
“It may make us a little bit more careful about how we manage forward-looking expenses, but we still think there is a very big opportunity.”
He said part of that opportunity occurs because “there are still plenty of people who are moving from offline means of purchasing their travel to online means. Again, we are going to have some headwinds no doubt about it. But the fundamental thesis that we are pursuing internationally is, as I said, intact.”
In reporting its earnings for the three months that ended Sept 2008, Boyd said Priceline’s gross bookings internationally grew 58.6 percent (actually 45 percent growth when accounting for local currency).
Booking.com‘s hotel inventory also grew 50 percent to 57,000 hotels in the quarter, compared with the third quarter of 2007, he said, and Booking.com and Agoda.com are going strong in Asia..
Boyd said soft occupancy and demand present Priceline with the opportunity to further build its hotel base with “the larger chains that have not been focused on getting new online distribution channels to get them to recognize the value of the distribution we can bring to them from around the world.”
And, on the air side, Boyd said Ryanair’s recent fare sales should spur demand and benefit Priceline and the other online travel players.
