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Whi I Believe Priceline Will Fail


johnk
By johnk,
in

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I may be somewhat of a new breed, but I'm a businessperson that does their own travel arrangments, and I like to try to find the best price for either myself or my client. But often with business, and sometimes even when it's not business, things change. But change does not work for Priceline, especially when you have used their so-called better price feature. I have two examples of why I will never use Priceline again.

The first was when I booked a hotel through Priceline for a week long stay in Baltimore. I was attending a conference, and had additional business there. When my conference ended mid-week, I found that the other meetings got cancelled, and so I had three extra nights booked through Priceline that I did not need. I called Priceline, and they said they were unable to let me out of the last three nights stay, even though I would not need the room. When I asked, the customer service person said that they would not be able to get a refund from the hotel. I then went to see the manager of the hotel, who told me that they would absolutly refund the hotel amounts to Priceline so that I could leave early. They also felt it would be no problem booking the rooms again as it was the height of the season. Called Priceline back to tell them the good news, and they still said no. Obviously, Priceline wanted to keep their money, even though the hotel did not require and was willing to refund their part.

Second experience was with airline flights. I used the name-your-price feature for a business trip to Vancouver, and finally got a price I thought might be worth the flexible scheduling (the price turned out to be no better than had I gone directly to United to book the fare - another lesson). After booking, a conflict came up that required me to fly out later in that day. United could not help make any changes, since it was done through Priceline, but said that they would be happy to put me on a later flight if Priceline gave the ok. I calle Priceline customer service, and they said that they cannot refund or change when you name your own price. I told them I understood that was their policy, but in this case, changing the ticket would not cost them anything, according to United who was ready and willing to change the time. They said that didn't matter, that was their policy. The end. I couldn't believe it, and wrote to them about it. They wrote back, thanking me for the letter, but again assuring me that no change could be made to their policy.

Now, I have to completely reticket, since by not showing up for the first leg of the trip, it will cancel out the other half of the trip by United. I am out $465 because I cannot use that first leg of the trip, and because Priceline refused to help me change it, even when I offered to pay them whatever it might cost them to make any changes. Unbelievable.

So my question to Priceline...how can you hope to maintain any sort of returning customers, when you have such an inflexible policy. And, how can you have such an inflexible policy when the reality is that things sometimes change, and people can not always know if they can make the time and date they originally set. And why would you be so inflexible, even when the customer is going to lose the entire amount, and has offered to compensate you for any additional costs?

For these reasons, I will never use Priceline again, and I believe that their model is one that will eventually lead them to lose more and more business. This is a very short sighted approach by them, and for that reason I believe they will eventually fail and go out of business.

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So my question to Priceline...how can you hope to maintain any sort of returning customers, when you have such an inflexible policy. And, how can you have such an inflexible policy when the reality is that things sometimes change, and people can not always know if they can make the time and date they originally set. And why would you be so inflexible, even when the customer is going to lose the entire amount, and has offered to compensate you for any additional costs?

When buying hotel rooms, airfare, etc, through Priceline, the user agrees that under no circumstances may they alter the arrangements. No cancellations, no changing times, nothing. This is explicitly stated throughout the buying process on Priceline's website.

Now, in reality, yes, things change. If you expect that changes may be necessary, why would you book via Priceline? Or why not book the first few nights via Priceline, and the remainder via the hotel directly? This way, there is a way out of your last few nights. Priceline's "inflexible" policy is precisely why I've gotten $200 rooms for $37. If you aren't willing to risk it, perhaps Priceline is not for you. They should not be expected to alter their policies just because your plans change. If they begin making exceptions, they may lose their valuable inventory when the large hotel chains learn that their contracts have been broken.

For me, a "broke" med student who loves to travel, the benefit FAR outweighs the risks. I will continue to use Priceline, but only when my dates are solid. I will not use their airfare product, as I have NEVER found it worth not knowing my flight times ahead of time. I would not have been able to take half the trips I've taken without Priceline.

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Yes, I think you are a good example of the kind of return customers they will get. But they will lose many others for being so inflexible, and refusing to help when there is no loss to them. In my airline instance, they were not at risk of losing anything, only cooperating with United by allowing the change. But, they were simply not interested. Their follow up email was just as careless.

And re: the hotel - I booked the whole week for the very reason they should have cooperated on the refund...there was no other space available anywhere else. I did not want to risk not having a room, but for that same reason the hotel was willing to refund them and resell at a higher rate. Again, no risk of losing anything on their part, and again, a very inflexible policy where the customer does not come first.

I have received good deals from them in the past, which is why I returned. But in the long run, for me as a business person where change is the rule, it's a very bad model.

From their heady $300/share price 5 years ago, the stock has gone no where in the last couple years, and as more people have these kinds of experiences, and as the competition figures out how to take care of a customer, their early lead will slowly dissapate and they won't be able to support their internal structure.

Trust me, I'm not the kind of person that whines about things, especially when I have been partly to blame. But in this case, when there was no downside to them helping, and they refused, I have to say something about it.

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Just because Priceline's model doesn't work for you doesn't mean it works for nobody.

Over the years I've made about 100 reservations, if not more, using Priceline. Almost all were one or two night stays. From time to time I've even bid on behalf of friends. I (and the people I've bid for) used Priceline fully aware of its terms and conditions. Usually once I'm bidding for a particular location, my plans are either 100% firm or I'm willing to eat the cost of the reservation if they change (or if I'm unhappy with the hotel, etc.). So far the latter has happened once: I booked a hotel for two nights and left after the first. I think I was out something like $30. It never crossed my mind to ask for a refund. Miraculously enough, I survived.

Regarding your plane ticket, you probably could have showed up at the airport for your desired flight pretending to be stuck in traffic or whatever. United almost certainly would have added you to the standby list without a problem, as long as it was the same day.

Just curious: what kind of change policy would be acceptable to you? For your plane ticket, if you had booked conventionally you'd still be out $100 to reticket, plus any excess would be in the form of travel credit (not cash or chargeback), plus if the fare had gone up you'd have to fork over the difference anyway. Is this what you want PL to do? You can't expect it to be MORE accommodating than the airlines, do you?

When "nonrefundable" is OK with me I use PL. When it's not, which does happen, I book conventionally. The savings I realize when I use PL have more than made up for the occasional inconvenience of having a nonrefundable reservation. Not everybody is like me in this respect, but enough are that Priceline survived the dotcom collapse. It's not going anywhere.

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You agreed to a non-refundable purchase, not "non-refundable unless your plans change."

From elsewhere on the board:

It is important for everyone to know when problems and customer service issues arise, but the majority of the users come here to see winning bid information... so please oblige them with this information before asking for them for help.

Please use this HOTWIRE and these PRICELINE LINKS: HOTELS, CAR RENTALS, and AIRFARE to begin your travel purchases

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Please do post your Baltimore hotel bid information. I'm betting the total cost to you (completely tax deductible or re-imbursed by your clients or company) for all the nights was less than you could have gotten for the 4 nights used. You didn't lose a thing over booking conventionally.

As for your flight, United is more guilty than Priceline. It's their airline, they can do whatever they want. They chose the easy way out by saying "it's OK with us if it's OK with Priceline." My wife and I have played that game with our kids forever.

Priceline won't miss your business. But I bet you end up using them again, regardless of your claim not to. The savings more than make up for the restrictions on many, not all, occassions. It's up to you to decide the risk to attribute to each trip.

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But change does not work for Priceline

That inflexability is the whole philosophy behind PL's business model and how they are able to offer such bargains. You must remember that PL is an auction house, and like any other auction, all accepted winning bids are final.

Contrary to your opinion of their imminent failure, they are actually on healthier financial footing than ever. PL recently reported a jump in first-quarter bookings double that of the online industry's average.

PL is not as attractive for airfare or car rentals. The airlines and car rental companies themselves are the best sources for bargains. As far as hotel stays, nobody can touch PL. However, if flexibility is important to you, then PL is not a sales venue you should be considering.

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John, jeez, where do I start??? I'm not one to pile on, but I just have to add my two cents.....as has been mentioned, the purpose of this message board is to help others by posting recent wins, which would be great if you could share these with the rest of the board. With the summer travel season, Baltimore is a great one or two day stopover and has lots to offer someone that may be intending to stay here (like Aprilmay). Just click on "my trips" on the priceline web page and you can see the results of your win. Hotel rates in the Baltimore "Inner Harbor" area are usually in the range of $250 per night, so hopefully you paid less than if you booked directly with the hotel. Also, hotels have instituted an "early check out charge" of $100 or more if your plans change. Just about every major airline and hotel chain's website has a best rate guarantee of some sorts, this has driven some business away from Travelocity, Orbitz, or Expedia becuase you can get a "same as or better" price directly. These direct sites also have instroduced "non cancellable" reservations as well, which ultimately serves the hotel by guaranteeing revenue and increasing occupancy rates. This leaves a big opportunity for opaque services like Hotwire, Priceline, and EasyClickTravel to fill rooms that might remain otherwise empty. The hotel can keep staffing levels constant and raises revenue because opaque sales evens out occupancy levels. I have used PL and HW successfully for about three years now, I make all of my hotel arrangements and in the era of tight T&E budgets, this works for me. I typically save at least $60 for each bid and shave $3000 or more off my annual hotel expenses. I also get to stay in accomodations such as Hiltons, Hyatts, Marriotts that would normally raise an eyebrow back at the home office. Priceline is rigid because if they made an exception for one, they would also have to make an exception for all. A empty hotel room or empty plane seat is like a piece of fruit that rots if not sold. These opauqe booking websites will continue to be a success because they match sellers with buyers. Only with the continued support from visitors to this site who use the Travel Links to Help Support BetterBidding will we see the bargains and low hanging fruit that is available for the picking.

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I think what may kill PL are the hotels that are offering rooms that are discounted 50% in exchange for being pre-paid and non-changeable. The rates are similar to a PL rate and even though you can't cancel the rate I think you'd have a lot better luck with the hotel than with PL if an emergency comes up. The savings for being opaque has to be significant to be worth the risk of getting a mis-rated hotel.

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I have never found a direct rate that came close to Priceline's rate. Even the pre-paid rates are much higher than most of Priceline's offerings. I haven't researched 1* or 2* hotel prices, though, so maybe those direct rates are more comparable to Priceline's.

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I too find Priceline's "customer service policy" (or lack thereof) occassionally exasperating. It often feels they don't really give a damn about their customers -- problematic in the travel biz, where stuff certainly does happen.

That said, when using their hotel product, the savings are usually tremendous. Over the years, I'd guess that on average, I've paid slightly less than 50% of what it otherwise would have cost me for comparable accomodations (and, mind you, that's not a 50% discount off rack rates, that's a 50% discount off the otherwise cheapest rates). So until somebody builds a better mousetrap -- perhaps one with comparable prices AND good customer service -- I'm going to be using priceline for all the hotel stays I can.

As many have said, the airfare and car rental discounts are not remotely close to the hotel discounts. I've never successfully bid for an airfare (I've occassionally made lowball offers that were rejected) and rarely use the car rental feature. Priceline's inflexibility simply doesn't work for me for those modest discounts. But save me half on hotels and I'll put up with some "attitude." :)

My guess is priceline's inflexibility strikes newbie users hardest because they don't really believe that priceline will enforce the inflexible rules they claim they have. Afterall, we've all been successful in getting travel companies to bend rules that seemed onerous or unfair or even inconvenient. Now you've learned your lesson that priceline isn't one of those flexible companies. While I sympathize with your plight, I can't be too upset at a company that simply enforces its clearly stated policies.

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I think what may kill PL are the hotels that are offering rooms that are discounted 50% in exchange for being pre-paid and non-changeable. 

I have never seen a pre-paid rate offered by a hotel that came anywhere near being a 50% discount. Perhaps I'm not dealing with the right chains. I'd love to see some anecdotal evidence.

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  • 4 weeks later...

I actually totally agree with the quote in the immediately preceding reply. If Priceline fails, it will be because of changes in hotel booking policies and practices, not losing customers like the OP. That type of business travel was never their customer base profile anyway. If you want guarantees and flexibility - hey, go to the hotel websites directly, or places like Travelzoo (as long as you're careful to read the rate details to make sure that THOSE don't have penalties associated with cancellation). Heck, there are a number of instances when booking through those routes proved cheaper (or as cheap) than going through Priceline. As far as the 50% savings goes, if you're talking about 50% less than the GA rate for a hotel - I've done that LOTS of times. How about a few minutes ago when I got a July 14-15 booking at the four star Hyatt in Fairfax, VA for $50 + about $12 in taxes and fees? The "going rate for that night is $189 (I assume before taxes). Seems like at least 50% to me...

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