Travelocity does a 'reverse-Priceline,' building opaque-hotel product


*logoTravelocity is in the midst of building an opaque-hotel product called Top Secret Hotels, executing what might be called a reverse-Priceline.

That is, Priceline started with its Name-Your-Own-Price bidding product for distressed inventory and years later built its own retail travel business.

Travelocity, on the other hand, has its retail and wholesale travel business, where you know what brand you are booking in advance, and now has decided to construct a discount hotel product. Travelocity is taking a page from sister company, which offers Top Secret Hotels in Europe.

With Travelocity's Top Secret Hotels, as with Priceline's Name-Your-Own-Price and Hotwire, consumers don't know the hotel's identity until after they book.

Of course, Expedia took an entirely different route when its then-parent IAC/InterActiveCorp acquired the opaque inventory seller Hotwire in 2003.

At that time, the acquisition tack broke new ground. In the beginning of the online travel agency era, some of the OTAs chose to partner with opaque-inventory sites instead of buying them.

In 2001, Orbitz partnered with Hotwire, soon after the airline-owned site, Orbitz, launched. Actually, Hotwire, majority-owned by Texas Pacific Group, had some airline ownership, too.

Even earlier, in 1999, Travelocity and Preview Travel partnered with Priceline in linking their respective retail and opaque offerings.

There was no press release or fanfare this week about Travelocity's Top Secret Hotels. Tom Botts, a partner in the strategy firm Hudson Crossing, broke the story about Travelocity's new hotel program in the Hudson Crossing Travel Industry blog.

Asked about Orbitz's introduction this week of Orbitz Hotel Price Assurance, Travelocity spokesman Joel Frey told "We are monitoring their move, but, big picture, we're focusing on what we believe to be more impactful cost-saving initiatives for consumers with longer-term implications, such as Top Secret Hotels, which we are currently building out on the site. Products like this are also more helpful for our supplier partners, particularly in this environment."

Top Secret Hotels is unavailable in most markets, but you can find it when searching for hotels in Orlando, for instance.

No word yet on whether Travelocity plans an all-encompassing opaque product, including flights and cars, in addition to the higher-margin hotel business.


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