Priceline Hotel: 3* Columbus Worthington $40 5/24 1nt 3rooms

By taalhiker,

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Sheraton Suites Columbus


201 Hutchinson Avenue

Columbus, Ohio 43235


Check-In Date: Sat, May 24, 2003

Check-Out Date: Sun, May 25, 2003

Your Offer Price: $30.00 (plus $10 bonus money / room)

Number of Rooms: 3

Number of Nights: 1

Subtotal: $90.00

Processing Fee ($5.95 per room): $17.85

Local Taxes and Fees: $18.00

Total Charges: $125.85

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The tax calculation here is quite interesting. Here is how I understand it.

Because the total amount you bid for the 3 nights was $90, Priceline cannot charge you more than 20% of the $90, which is $18, since they promise not to charge you more than 20%.

The actual tax rate in Columbus, Ohio is 15.75%, which Priceline would normally apply to the actual price it paid for the room. But given the relatively low room cost and the amount of bonus you got, Priceline cannot charge you 15.75% of whatever price it paid. You can deduce the room price that Priceline paid has to be more than $38/night, so this was an excellent bid and even better with the bonus.

Hope that makes sense!

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You can deduce the room price that Priceline paid has to be more than $38/night


I don't understand what you are saying here, although i do agree with your calculation.

Priceline bonus money is actually "paid" by Priceline, so dividing the nitely taxes paid by the tax rate: $6 / .1575 = $38.

I think that $38 is indeed the price that Priceline paid for the room. Why do you suspect that Priceline's cost has to be more than this?

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

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Priceline caps the amount of taxes they can charge, based on the amount you can bid. It can never exceed 20% of what you bid. It can't include the bonus money in this. In this case, 20% of $90 is $18 exactly.

If the price had been $38/night, then Priceline would have charged $17.96 in tax. A small difference, but it seems to prove the point here.

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