Back in 2009, Gadling posted a list of tips on how to become a Priceline expert. In that article, we discussed things like “free rebids” and how to find the best way to determine how much to bid.
Now, two years later, a site has been developed that can take all the pain out that process. The Bidding Traveler knows everything there is to know about bidding on Priceline and all the tricks you can apply to booking a room with the Priceline “Name your Price” method.
Forget “The Negotiator” – when you start your booking process on The Bidding Traveler, it’ll walk you through the entire process. Once you’ve made your selections, you can manually enter them on Priceline.com, or let the site do it all for you.
You start by entering the city, followed by the dates you need. The site then presents the current known zone and hotel map for your destination. Pick the zone you want, then the star rating. Based on this, it’ll tell you the best numbers to bid. The site gets its information from previous users and successful/failed bids.
I’ve played around with this new site quite a bit, and find it utterly brilliant. Instead of having to do all your own research, The Bidding Traveler holds your hand and does all the hard work for you.
The site is still a work in progress, but everything I tried worked perfectly. Take it for a spin yourself next time you you need a hotel room and don’t mind gambling on Priceline.
American Airlines isn’t giving up. Despite having pulled out of Orbitz and been booted by Expedia, the company says it’s still talking to the two online travel agencies and is hopeful for a resolution. According to Dow Jones, these are “active discussions” and that American Airlines is “comfortable” with booking results.
“Ultimately we will see all travel agency volume going through Direct Connect,” Garner said, referring to the American distribution system at the heart of its dispute with parts of the industry. That would include the GDS providers, whose contracts with American are due to expire later this year.
What makes this interesting is the fact that American isn’t backing away from its primary reason for pulling out of Orbitz … which triggered the defensive move by Expedia. So, the words strike me as vapid, since the major issue isn’t being addressed (at least not in public).
There is a rumor that Priceline has signed on for Direct Connect, but all involved are keeping their lips sealed.
Online travel agencies have had a solid run over the past two years. They picked up some market share as would-be travelers were willing to poke around a little more to score cheap tickets. High rates of unemployment and under-employment and general economic uncertainty, of course, were enough to make consumers value every dollar a little more. This opened an opportunity for online travel agencies to advance in the marketplace, and chip away at the dominance of their suppliers (i.e., the airlines) on the web.
Yet, the market is turning. Next year is expected to be a strong one for the air travel industry relative to 2010, and 2010 was a vast improvement over 2009. For online travel agencies, this provides some benefit as a rising tide, but it’s likely to favor their suppliers, as customers are more likely to go with what they know over putting in some effort to find the largest discounts.
Online travel agencies will have to overcome this tendency by investing smartly and substantially in their own brands. This is what we’re seeing in the latest move by CheapOair, the one of the 10 largest online travel agencies in the sector, in its recent announcement of a marketing mix change, which teases a broader strategic shift given changing market conditions.
A Changing Travel Market
From 2008 to 2010, online travel agencies were able to chip away at the online market share of their suppliers, reducing the suppliers from owning 62 percent of the online business in 2008 to 59 percent in 2010, according to travel industry research firm PhoCusWright. Bargain hunters drove the market, which eroded the importance of brand loyalty.
From 2009 to 2010, PhoCusWright notes a “strong countercyclical performance for the OTA category.” In 2009, sales fell only 1 percent for the sector, compared to 5 percent for the total online leisure/unmanaged business travel market. And, online travel agencies have posted double-digit gains in 2010.
Stronger industry conditions, however, are better for the suppliers, and PhoCusWright observes, “With the rebound continuing, supplier websites will likely regain momentum as the OTA fight to hold on to their share gains.”
In regards to the actual travel experience, ostensibly, the airline’s brand matters most. When a passenger books through an online travel agency, the brand associated with the transaction lasts for a few minutes – or a few hours, depending on the diligence of the buyer’s search. Meanwhile, interaction with the airline’s brand starts during the search for a ticket, persists through the flight and ends sometime after the passenger hops into a town car to get to his ultimate destination. To register in the customer consciousness, online travel agencies need to develop the sort of presences that will keep them top of mind.
This runs counter to the traditional online customer acquisition models associated with the online travel agency business, which involve a combination of search engine optimization, online ads, affiliate programs and social media. These are transaction-oriented tactics, which speak directly to the brand-barrenness of big discounting.
More Than the Transaction
The largest online travel agencies have already moved past transaction myopia: everybody knows the Travelocity gnome, Priceline‘s William Shatner and the likes of “Cooper” from Expedia. For all but the top players, however, investments in mass media brand development (such as television) have generally been eschewed in favor of what’s been known to work. Speaking at Business Insider’s IGNITION conference last week, Buddy Media CEO Michael Lazerow noted that Travelocity grew to $4 billion in revenue through online means before it moved to television to get to the next level.
Yet, for the online travel agency sector to hold its ground – and even grow – in 2011, brand has to matter more, and this means casting a wider media net. This, plus the size of CheapOair relative to its competitors, is what caught my attention about its recent media diversification. The company is launching its first television ad campaign, “Get More for Less,” in an aggressive move to get out in front of the imminent online travel market shift.
The move to television is an aggressive one, and it comes a bit ahead of “schedule” for CheapOair, if you use the Travelocity number as a reference point. Expedia pulled in close to $3 billion in revenue last year, for example, and Priceline at $2.3 billion. Travelong/CheapOair generated $825 million in revenue in 2009 and has grown at a year-over-year rate of 45 percent this year, resulting in forecasted 2010 revenues of $1.2 billion.
The company’s CEO, Sam Jain, says, “TV is a new strategy for CheapOair and as we head into our 6th year we believe this is the right time to expand our marketing efforts. TV is a natural evolution from our current digital marketing and will help build awareness among a larger audience and introduce more people to the brand.” The countercyclical tendencies of the online travel agency market relative to travel as a whole reinforce this point.
Pointing to the potential for a virtuous cycle, CheapOair’s Sr. Vice President of Strategic Partnerships, Bill Miller, adds, “This new TV campaign should draw in more customers for us which in turn will bring more value to our supplier partners. Our suppliers — airlines, hotels, car rentals —- want valuable and efficient distribution partners. I believe we are all that and more and this TV campaign is just another example of how we can extend our marketing reach on the behalf of our supplier partners.”
Fashion versus Reality
It’s been fashionable among the digerati to claim the death of other forms of media, and I’m as guilty as the rest. But, the reality is that SEO and online ads (a la Google’s pay-per-click model) are becoming increasingly crowded and competitive. Since they are focused on the transaction rather than the brand, they don’t provide for a relationship with the customer that results in a gradual reduction in cost per revenue over time. It’s strictly “pay by the drink,” and that can get pricey.
With the travel market starting to tip in favor of the travel suppliers over the online travel agencies, the costs associated with traditional online marketing will become even higher, as brand brings customers back to the suppliers and online travel agencies chase a shrinking share of bargain hunters. For online travel agencies to compete effectively, they have to make their own investments in branding – a commitment that lacks the predictability of other forms of marketing.
Strangely, television may become the key to winning on the web in the travel industry in 2011. A better market translates to the amplification of the importance of brand, and commercials are still a critical aspect of this in the consumer world.
A battle of the brands is about to break out. The good news is that it’s for your benefit … and you’ll get to watch it on TV!
It looks like the internet is no longer a fad … at least not in Europe. Forecasts from travel market research firm PhoCusWright put 2010 growth in the European online travel industry at 10 percent, a smile-inducing turn from the 1 percent gain posted last year, not to mention 11 percent decline in 2009 for the entire European travel market (which is up only 2 percent this year, it appears).
“For travelers who may have been hesitant to book online, the recession provided the extra push they needed,” says Carroll Rheem, director, research at PhoCusWright. “Deal seekers turned to the Internet, and online travel agencies in particular, to find affordable options.”
The strength of the online travel agency sector was noted as a reason for last year’s resilience, according to a statement from PhoCusWright, “The buoyancy of the online market is due largely to the strength of the online travel agency channel, which grew in 2009, while supplier websites slipped.”
Rheem adds, “Hotel bookings are fueling online travel agency growth in Europe, with brands like Priceline‘s Booking.com maintaining extraordinarily high growth rates.” Further, it looks like online travel agency action is “on track for strong double-digit growth in 2010.”
I’ve been a huge Priceline fan ever since I scored my first $20 five-star hotel room back in 2001. The ability to “name your own price” and hope for the best may seem scary, but after your first couple of rooms, you learn to have faith in “The Negotiator”.
Up until now, accessing Priceline required a desktop or laptop, or a lot of patience on a mobile browser. Thankfully, iPhone users can now download the free Priceline app for their device.
The application is very slick – you can complete the entire booking process on your phone, using the name your price feature. Best of all, the app makes it very simple to locate nearby properties, ensuring you don’t end up with a hotel 40 miles from where you actually wanted to be.
If you have used Priceline in the past (on the web), you’ll instantly recognize the process. If you have never used Priceline, all you need to know is that you can’t pick an exact hotel when you name the price you are willing to pay. The only two things you can request are the star rating and the location.
This location is based upon a region Priceline specifies. For a city like Chicago, the map is split into eight different areas. Each area is mapped inside the application, so you get a general idea where you could be staying. To start the booking process, you pick your star rating, check-in date, number of rooms, and of course the price you are willing to pay. Priceline gives you a number they think is the “average”, but you should obviously try starting a little lower. After providing your name and a credit card number, the Negotiator starts looking for your hotel room, at the price you gave them. If accepted, you’ll have a reservation. If not, you can re-bid, but the process gets a little more complex. I recommend reading our “mastering Priceline article” to learn the best way to utilize your free re-bid.
If you’d rather not gamble, you can book hotel rooms the old fashioned way. In fact, the Priceline app has a very competent regular booking system built right in. Like any mobile hotel booking application, you pick a location and get a list of all the hotels in that particular city. You can then filter the rooms by rating and location.
The hotel listings provide quite a bit of information – you can locate them on a map, read about their amenities and read customer reviews. To book, you can click to call the Priceline reservation line, or make a booking directly in the application.
All in all, another very well made iPhone app. Programs like this are what make the iPhone such a travel friendly device. If you are a fan of the Name Your Own Price method of booking, you’ll love how easy it is to book within the program. The application is free and can be found in the App Store (iTunes link). Even if you don’t want to gamble on naming your own price, you can use the application as a great hotel finder.