NORWALK, Conn. --
Priceline.com is making a bid to be a full-fledged
retailer competing directly with Expedia, Travelocity and Orbitz.
The company,
which pioneered the name-your-own-price opaque model, introduced
retail hotel and car rental offerings that are integrated into the
Web site.
It began retail
air sales, with disclosed fares and brands, more than a year
ago.
The revamping of
the site to incorporate domestic car and global hotel inventory
rounded out Pricelines retail offerings.
It includes air,
hotel, car, cruise (from NLG) and dynamic packages.
The retail hotel
inventory comes from two Priceline-owned companies, Travelweb and
Active Hotels, and Pegasus Solutions. The car rental inventory
comes from Worldspan.
Were aiming at a
much broader audience than Pricelines original audience of
mercenary, value-conscious travelers who would accept trade-offs to
get a good deal, Priceline President and CEO Jeffery Boyd told
TravelWeekly.com.
Chief Marketing
Officer Brett Keller added, The opaque-retail combination gives us
the strongest collection of offerings for consumers.
The difference is
we are a fully integrated site, Keller said. Travelocity does not
have an opaque option, and for Expedia and Orbitz, the opaque
option is a click out to Hotwire.
To promote the upgraded
site and boost market share, Priceline was slated April 11 to
unveil a series of William Shatner TV and radio ads but without a
major increase in ad spending.
As for Pricelines
classic auction approach, the name-your-own-price option will
remain prominent and will be featured more for hotels and car
rentals than for air. Thats because the availability of distressed
air inventory and margins have eroded.
In contrast, with
average daily room rates and revenue per available room rising,
Pricelines opaque hotel business is doing well, officials
said.
In 2004, with the
introduction of retail air, Pricelines airline ticket unit bookings
climbed 61% year over year.
Priceline does
not expect retail hotel and car rentals to climb at a similar pace
because the opaque product in these segments is
healthier.
Ultimately, our
differentiation on the hotel side as well as in our other products
is not really going to come from a promise that our retail prices
are cheaper than anyone elses, Boyd said.
It is really more
of a promise that you will not only have access to the best retail
rates but also to the lowest discount rates available through our
opaque product.
Asked if the
mixture of opaque and traditional inventory would confuse
customers, Boyd said, It [the integration] makes the opaque product
a better product, giving customers the information they need to
inform the bidding process if ultimately they want to
bid.
To contact
reporter Dennis Schaal, send e-mail to tweditorial@ntmllc.com.
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For more
details on this article, see "In the Hot Seat: Jeffrey Boyd."
Travelocity, Expedia: What, us worry?
NEW YORK -- Pricelines competitors are not surprised or worried that the auction site is broadening its horizons into traditional travel sales.
Travelocity President and CEO Michelle Peluso said, It makes sense that Priceline is expanding its niche because the opaque model is challenged and the market is saturated.
Peluso said that Travelocity is moving in the opposite direction. Travelocity emphasizes travelers reviews and connecting consumers to a hotel that we can tell you about, she said.
Travelocity partnered with and then dropped Priceline several years ago and doesnt have an opaque product.
Peluso noted that Travelocitys market share rose in 2004 and claimed that it has numerous advantages over Priceline because Sabre, its owner, is a much larger firm.
Meanwhile, an Expedia spokesman said the company prefers a multibrand approach with Hotwire rather than diluting the Expedia brand.
We found that you cant be all things to all people, the spokesman said. Our experiments with integrating opaque into our retail offerings confused consumers. -- D.S.