thereuare |
Jan 20th, 2003 04:57 AM |
XX,<BR><BR>A business model like you are talking about would NOT work for the simple reason i stated... nobody would book thru the hotel at their posted rates if they could always get it cheaper by bidding on it (or at least the same price by eventually bidding the posted rate)<BR><BR>The reason why Priceline works is b/c you don't know the hotel you are getting, therefore the hotel is not losing out on higher margin customers that are willing to pay the "going rate" in order to stay at that specific hotel.<BR><BR>By giving excess inventory to Priceline, the hotel is able to potentially win over a new customer once they stay at the hotel WHO MIGHT HAVE NOT EVER CHOSEN THAT HOTEL (that's the key part, it's getting revenue from a customer that might have been staying down the blcok at a different hotel)<BR><BR>Why would a hotel want to sell rooms cheaper than their "going rate". Room prices ARE based upon supply/demand, so if the hotel is VERY empty they just run more sales/promotions for that time. However, there is a certain floor to prices because they don't want to cheapen their product in consumer's eyes (and they don't want to "give away the ranch" to customers that CHOOSE to stay at their property)<BR>
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