Question on inner workings of Priceline.com

[spragujl]

I was reading on another site where a poster had his bid rejected, then added a 2nd zone and rebid at a lower price. He had the lower bid accepted in the 1st zone. The implication was that Priceline might be applying advanced logic to squeeze out more profits.

I

[thereuare]

My take is that their system still has some 'glitches', and this was shown in a report from a firm they hired to analyze their business a few months (or longer) back. I'm sure they fixed many of these issues, but it probably still occurs (don't now the timeframe of the example you gave), although less often then it did before the report was done. Anytime you have a fully automated system, eventually something will 'break' or you'll find something didn't work exactly as intended under every possible scenario.

Of course, it could also just be 'luck' and the hotel re-priced their inventory between the two bids, but more likely some random glitches remain.

[spragujl]

Thanks Thereuare for the feedback. Yeah, I'm sure glitches do occur.

It sounds like you have good insight into Priceline's workings - If you know, it would be interesting for me to hear how Priceline's client hotels feed in their minimum acceptable price and number of rooms available. Is it some form of software calendar where they input numbers of rooms and prices?

I assume it would have to let the hotels change the numbers of rooms on the fly - depending on their real-time conventional bookings. But what happens if they overbook?

Plus, it seems to me that some hotels like ESA and Residence Inn would prefer multiple night reservations over single nighters. It would make sense if they could award multiple nighters lower costs than single nighters.

There really could be lots of permutations!

[thereuare]

My understanding...

Most hotels use third party software to manage and database their inventory, for which they enter room rates on a calendar type basis. They can enter multiple rates, black-out dates, 'closed to arrival', minimum stay requirements, number of rooms offered at each rate, etc, etc. To change rates or any other criteria they simply log in for their hotel and change whatever info they would like, all in realtime.

Booking agencies (Orbitz, Expedia, HOTWIRE, Travelocity, Hotels.com, priceline, etc) then access the database maintained by the third party software supplier (in the case of priceline and hotwire the rates are 'desginated' to be accessed by these services only) to display rates based upon the criteria on their own website. Naturally, as rooms are booked information is passed between the booking service and the database, automatically reducing the available inventory.

Technology :)