Priceline ups retail offerings with hotel, car rental bookings

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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 [email protected].

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For more details on this article, see "In the Hot Seat: Jeffrey Boyd."

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