How do Priceline and Hotwire notify the sellers?

[pluckypea]

Wondering how the sellers respond so quickly to the priceline and hotwire bids...I know there are minimum $ bids they will accept, but what if more than one hotel/car/airline company has the same minimum?? And how do they know whether or not a room/car/flight is available so quickly? (It just wouldn't seem cost efficent for them to be buying all of the excess cars/rooms/flights up and reselling them). Thanks!

[dahammer]

priceline or hotwire do not hold any inventory, they kind of work like the stock exchange, basically matching offers to sell (hotels with rooms, rental agencies with cars, airlines with empty seats) with bids to buy these items. A seller will inform priceline the minimum price they will accept and the buyer submits a bid to pricline for the maximum price he will pay. If a hotel starts to fill up, the management might remove inventory from priceline, essentially withdrawing its offer to sell, or may raise the price (as we have seen at the Jersey City Hyatt).

[thereuare]

dahammer has given the Stock Exchange analogy on the board before and here is one my replies to:

I think the Stock Exchange example is a perfect one (if you understand how wall street operates). A good one sentence answer: The hotel will be awarded to the hotel with the highest rate below (or equal to) the user's bid amount.

However, i see another potential 'problem here' (and we're really splitting hairs here and getting into 'complex behind the scenes stuff'... so new users should not feel the need to understand this in order to feel comfortable using Priceline):

Since hotels can, and do, load multiple rates, lets take this a step further and hypothetically load multiple rates into the system (lowest rate is shown outside of the parentethis, subsequent higher rates are shown in paranthesis):

a. Hyatt prices $47 (50, 57, 63, 65, 67, 70)

b. Omni prices $47 (50, 55, 60, 62, 64, 67, 70)

c. Hilton prices $60 (66, 68, 70)

Using the above hypothetical example, a bid of

$60 - Omni or Hilton

$61 - Omni

$62 - Omni

$63 - Hyatt

$64 - Omni

$65 - Hyatt

$66 - Hilton

$67 - Hyatt or Omni

$68 - Hilton

$69 - Hilton

$70 - Hyatt or Omni or Hilton

So although the above example is purely hypothetical, i think it shows how hotels loading multple rates can cause a user who bids higher for a specific hotel to have that plan 'backfire'. Of course in the real world example Ringman was only risking a few extra dollars and perhaps that risk was worth it, but this example shows how there just aren't any guarantees (and perhaps less of a 'lay-up' than most users would think).

The above is from the thread DON'T BID HIGHER FOR A SPECIFIC HOTEL but it also explains a bit more about the inner workings of priceline.

Bottom line is that priceline is not actually contacting each hotel to see if they'll accept your bid... the hotel (or airline or car rental company) load rates into a computer and then priceline compares your bid amount to the loaded rates to see if your bid is high enough to be 'accepted'.