How
Much to Bid for a Priceline.com Hotel
Save massively by following these
guidelines
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Don't get caught by 'auction fever'.
Carefully plan your bidding strategy so you know how
much to start with, what your maximum should be, and at what
rate to increase your bid.
Part 2 of a series on How
to book hotels at the lowest price on Priceline - please
also visit
1.
An introduction to Priceline
2. How much to bid
3. How to rebid in less than 24 hrs
4. The true cost of a Priceline bid
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Priceline has the potential to
save you huge amounts of money on your hotel stays, but if you
don't bid carefully, you'll end up paying much more than you
need to, while getting no extra benefits or bonuses in return.
While Priceline tries to
obscure what the minimum successful bid may be for your stay, it
provides some clues. Best of all, two independent websites
are full of information about what other people have bid and won
hotel rooms for.
Using these information
resources will massively reduce the amount you need to pay for
your hotel stays.
When Are Rates Lowest on
Priceline
This is a question that
- of course - neither Priceline nor the hotels that sell their rooms through
Priceline want you to know the answer for.
However, there are some
general answers to this question that are probably correct.
The rates on Priceline depend on whether or not participating
hotels think they will need extra help to sell their rooms.
If they expect to be full, they'll not even put any rooms on
Priceline. If they expect to be nearly full, they might
put a few rooms on Priceline, but not at very low rates.
And - of course - if they believe their hotel will be not nearly
full enough, they'll put low priced rooms on Priceline.
So the question becomes -
when will hotels perceive if they will be full or not full on
any given night?
Clearly, at some times of year a
hotel knows for sure if it will be full or not full. A
corporate hotel knows it won't have many people staying at it
over Thanksgiving. A leisure hotel knows it will be full
over long weekends. If a hotel has a booking from a large
group, it knows it will be full. And if there is a special
event in the area, the hotel again expects to have more guests
than normal.
But for much of the rest of
the year, hotels (just like airlines) make use of sophisticated
computer modeling programs that project ahead to make estimates
about likely occupancy levels. The closer to the actual
night, the more accurate these estimates become.
Generally, it seems that
most hotels don't start to discount their rates until perhaps
six months prior to the date of stay - before then they don't
necessarily have a very accurate understanding of likely
occupancy levels prior to then, although if there is something
like an overabundance of hotel rooms in the area and depressed
economic conditions, they can guess that they'll be low (and, to
the opposite, if the economy is booming, lots of people are
traveling, and all hotels are usually full, they can confidently
expect to be full).
There are also some other
events that impact on a hotel's perception of its occupancy
levels. Some hotels allocate a portion of their rooms to
travel companies, and require the travel companies to 'give
back' rooms they won't need at certain points (usually starting
at three months and then more at two months and one month), and
as these reviews and potential givebacks occur, they get a more
clear understanding of what their actual occupancy levels will
be.
Bottom line - generally, rates don't get
very discounted until perhaps the last three months prior to the date of
stay. Once
you're within 90 days, rates start to become better, and when
you're within a month, hotels are then starting to offer their
best rates.
On the other hand, there is
a danger that, as you get closer to the date of stay, hotels
might have sold all the extra rooms they need to sell, and then
start to withdraw their best rates. So there's an element
of swings and roundabouts. I've watched availability and
rates sometimes improve, but sometimes also get much worse, and
there is no obvious way of predicting which way things will
trend.
There's one other issue to
consider. Remembering that Priceline bookings can not be
changed or canceled, you probably don't want to book very far in
advance for fear of something happening that might interfere
with your plans, or perhaps because some other better deal might
come along in the meantime.
So our feeling is that the
best rates and best compromise, while still giving you some flexibility can
be found in the last two months, and probably better still
within the last month prior to your planned date of stay.
And, to take matters to the
extreme, we've also had good experience
bidding for great rates even only a day before travel (and on
one occasion, on the actual day of travel itself), but in
general, you probably want to have your travel details confirmed
sooner than that.
This also ties into how much
time you'll need to make multiple bids
through Priceline for your hotel room (discussed in part 3).
If you are in a situation where you can do multiple bids, one
after the other, you don't need as much lead time as if you're
in a situation where you can only bid two or three times a day.
Time of Day to Bid
Some people wonder if there
is a better time of day to bid, or a worse time of day to not
bid.
As best we can tell, there seems to be no difference at all in terms of
times of day to bid or not bid.
How Much Does Priceline Pay for
the Rooms?
Occasionally a hotel has
accidentally disclosed how much Priceline is being charged for
the room I'm staying in, and I'll show such information here.
Before I wrote the series I
found out that Priceline had about a 15% margin on a hotel room
in Vancouver.
In November 09, I had a bid
accepted to stay one night at the Doubletree Hotel at JFK
Airport (terrible hotel, by the way), with my winning bid being
$90 plus $26.64 in taxes and fees. An earlier bid,
immediately previously, for $85 was not accepted, so the $90 bid
was obviously very close to the bottom line price that would be
accepted.
The hotel accidentally gave
me a copy of the invoice it was sending to Priceline. It
was charging Priceline $90 a night, too, but only $16.78 in
fees. So Priceline's entire profit was in the fees -
$9.86. That is still a good profit for Priceline, while
being a very good price for me (the hotel's lowest rate online
elsewhere was about twice this).
How Much to Bid
Priceline doesn't want you
to read this, and seeks to obscure the information we're passing
to you as much as possible.
Priceline, and the hotels it
is representing, naturally want you to pay
as much as possible for the hotel rooms you're bidding on.
It encourages you to bid high by limiting the number of bids you
can make, and by presenting information on typical rates that
hotels might be selling their rooms for without Priceline type
discounts (to encourage you, by implication, to bid higher than
perhaps you need to). Priceline also doesn't give you any information
about what other people are successfully bidding for hotel
rooms.
If you bid an amount higher
than the minimum that Priceline and one of its hotels would
accept, you still have to pay the full amount of your bid.
Priceline does not say to you 'Good news - you bid $150, but we
only want $125 for this hotel room night'. Instead, it
takes the full $150. Sure, if the room normally sells for
$250/night you might be pleased to get it for $150, and probably
you might never know that it was available for $125.
For example, recently one
person placed a bid of $120/night which was accepted to stay at
the Westin in Seattle. A second person placed a bid to
stay at the Westin, for the same night, but at $70, and this was also accepted. Don't you want to
be the person paying $70/night rather than the person paying
$120?
Generally it seems that most
bids are accepted for rates in the order of 25% - 60% off the
regular hotel rates you might see on Expedia or Orbitz.
But that's a very big range of bid levels, isn't it. That
means a hotel which normally sells for $150 might be available
for as little as $60, or might cost as much as $115.
Warning - sometimes you
might find that Priceline offers no discount at all, and due to
the addition of their fees on top of the apparent rate you are
paying, you actually could end up paying more for a hotel
through Priceline than you would if booking directly.
You not only need to know
what sort of realistic minimum to set your bid pricing at, but
you also need to know the going market rates for hotels
ordinarily.
Read on for advice on how
much to start your bidding at.
Knowledge is strength - see
what other people are paying
Fortunately, there's a
wonderful help to all of us who wish to maximize our savings on
Priceline. There are two different websites which collect
and display information from people who have successfully bid for rooms on
Priceline, and you can see from their postings what types of
bids are proving to be successful. These two sites are BetterBidding.com - you can directly access their calendar of
successful bids
here, and
BiddingForTravel.com.
Go to the listings of
successful bids, at both sites, for the destination you're
planning to stay at, and see how much people are paying to stay
on the dates you're planning to visit. It is important
that you find information on exactly the place and also exactly
the dates you wish to stay yourself - there's not
necessarily any link between the rates a hotel will accept on a
different date and the rates the hotel will accept when you want
to stay - indeed, if you read through the messages, you'll
see a wide variety in successful bids, even for the same hotel.
Understand also that hotels
not only have always varying levels of occupancy, but also will
typically have some days, every week, when they have higher
occupancy levels than others. Corporate hotels will be
busiest on Monday - Thursday nights, so you'll get the best
rates at such hotels on Friday - Sunday nights. The
opposite is true for leisure hotels, who will fill their weekend
nights first.
So if you see a midweek low
rate for a leisure hotel, but you want to stay on a Saturday
night, don't expect to pay the same low rate.
Another reason for
this variety in successful bid rates is that some people have bid better than others -
as mentioned above, I saw on one occasion two people
successfully bidding for the same hotel and the same date, but
one paid $70 and the other paid $120. Which leads to an
important part of how to analyze the information in these
messages.
Some of the posts on these
two websites are more helpful than others. When you see
information on a successful bid for the dates you are planning
to stay, this does not necessarily tell you the minimum bid that
would be successful - for example, if a person simply says 'Got
the Sheraton for $100/nt' while this does tell you that a $100
bid was successful, you don't know if maybe a $90 or $80
bid would also be successful.
On the other hand, the more
helpful posts tell you the person's bidding history - eg 'Bid
$80, rejected; bid $85, rejected; bid $90, rejected; bid $100,
accepted'. Now you know that the minimum bid is somewhere
between $90 and $100, so perhaps you might start bidding at $92
yourself.
Note that of course the bid
levels that Priceline will accept vary from day to day - hotels
may increase or lower their rates depending on how anxious they
are, and maybe some hotels might sell out and stop selling
through Priceline. So these messages are helpful but not
necessarily 100% accurate.
One last very important
thing - when you've completed your own Priceline experience, go
back to these two sites and post a helpful message about your
own bidding experience. What goes
around, comes around, and by helping keep these two sites alive
and helpful, you'll in turn benefit when you need to use them
yourself.
Priceline's own 'helpful'
suggestions - 1
Priceline will tell you
the median retail price of hotels in the area you're bidding on,
and suggest you use this to calculate your bid amount. But
should you bid at a rate that is half this number, or two
thirds, or what?
The best advice is to ignore
this number entirely and instead use the information from the
two websites above. But if you really want to know, we've
had bids accepted for considerably less than half this rate, so
if you have no other information to go on, perhaps you should
start your bidding at one third the retail rate and slowly go up
from there (depending on how urgently soon you need to get a
hotel room confirmed and how many bid combinations you can try).
Priceline's own 'helpful'
suggestions - 2
Sometimes you may find
Priceline comes up with a warning message after you've entered
your bid amount. This message will either say 'Based on
recent data, your price has only a small chance of being
accepted.' or it might say 'Based on recent data, your price has
almost no chance of being accepted.
If you get the message about
almost no chance of being accepted, you should probably heed
this message and not waste a bid at what is probably a foolishly
low price.
If you get the message
about there being only a small chance of being accepted, keep adjusting the price until you see the point at which
this message is/is not triggered, and perhaps - if you have no
other information to guide you - you might want to start your
bidding at a price slightly into the range where this message
occurs, and then grow your bid up from there as necessary.
I've never had a bid
accepted after getting either warning message, and I've had
plenty of bids not accepted even though no warning message at
all was generated, so these warnings are probably both valid
rather than just being 'shill' messages to try and trick you to
increase your bid.
Priceline's counter-offer
Sometimes you'll find your
bid is refused, but Priceline will come back with a suggested
higher 'counteroffer' price that they say would probably be
accepted.
It seems that you can
usually bid
slightly less than halfway between your bid and the counteroffer and have a high
chance of having your bid accepted.
By way of example, recently
(Sept 09) I bid $70 for a hotel room. Priceline responded
and said I could rebid at $92 and might be more successful.
The halfway point would of course be $81. I rebid at $78
(using the strategy in part 3) and the bid was accepted.
How Long Does a Priceline
Bid/Booking Take to Complete
It used to be that Priceline
did not answer your bids instantaneously, but this has now
changed, and you can expect your bid to be responded to with an
acceptance or rejection almost immediately - within a minute or
so of you sending the bid in.
Read more in the rest of this
series
This is part 2 of a series on
How
to book hotels at the lowest price on Priceline - please
also visit
1.
An introduction to Priceline
2. How much to bid
3. How to rebid in less than 24 hrs
4. The true cost of a Priceline bid
Related Articles, etc
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Originally published
14 Aug 2009, last update
30 May 2021
You may freely reproduce or distribute this article for noncommercial purposes as long as you give credit to me as original writer.
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