Priceline (NASDAQ:PCLN) is adding new features to its Name Your Own Price that allows customers to set up alerts when certain pre-set criteria are reached. This will help Priceline driver higher usage for one of the most popular features of its site and follows a trend that leading OTAs such as Expedia (NASDAQ:EXPE), Travelocity and Orbitz (NASDAQ:OWW) are following in adding more personalized services.
We value Priceline with a $506 Trefis price estimate of its stock is slightly ahead of its current market price.
Priceline’s new Hotel Bid Alerts feature is part of its Winning Bids service, which until now only showed the actual successful Name Your Own Price hotel bids (based on information like the city, bid amount, estimated percentage savings) made in the past by other customers. Customers can now create a personalized Hotel Bid Alert by entering the city, neighborhood, hotel star rating and bid amount, and whenever someone else’s bid meeting the criteria gets accepted, the customer receives an e-mail alert so that he can use it as a reference to refine his bid. [1]
This seemingly insignificant e-mail alert feature however hints at how online travel agencies are willing to adapt their systems and business models from simply offering the so-called ‘best deal’ to customizing offers that meet each customer’s budget constraints and specific requirements.
OTAs Have Been Partnering with Airlines
Leading OTAs have entered into private-label partnerships with the airlines by providing hotel bookings on the airlines’ websites. Expedia recently partnered with AirAsia, South African Airways and AirTran Airways. [2]
Priceline entered into a similar partnership with Jetstar Airways while Orbitz won the contract for Eurostar, the speed rail network between UK and continental Europe from Expedia. [3] Expedia also announced partnering with the leading daily deal site, Groupon, into providing deals on travel. [4]
OTAs have also targeted loyalty programs with Priceline partnering with Delta Airlines’ SkyMiles Frequent Flyer Program wherein travelers earn SkyMiles whenever they book hotels through Priceline’s Agoda.com. See a list of articles on these partnerships below. [5]
What more could come from OTAs in the future?
Leveraging established brand names with million of hits on their websites every month, the leading players in the online travel industry can match the travel deals with their registered members’ specific requirements in the future.
We foresee online travel agencies collecting preferred travel destinations, travel budget and preferred travel time during the year from the registered members, matching the criteria with their existing inventory of travel options and even renegotiating the terms with the travel suppliers (hotel chains and airlines) in an attempt to help liquidate the inventory of hotel-night stays and air tickets through a more dynamic and real-time process. Put simply, the online travel would gradually shift from the customers looking for travel options to OTAs looking for customers’ preferences.
View our detailed analysis for Priceline
Notes:- Priceline Launches Hotel Big Deal Days With Hotel Bid Alerts Feature, PR Newswire, June 15′ 2011 [↩]
- See Expedia Partners With AirAsia, After AirAsia, Expedia Now Partners With South African Airways. [↩]
- See Priceline Partners With Jetstar Airways As OTAs Race To pair Up With Airlines, Expedia loses Eurostar to Orbitz. [↩]
- See Groupon takes on OTA market with Expedia. [↩]
- See Priceline Partners with Delta Airlines as OTAs and Airlines Get Hitched. Expedia also launched its own loyalty program a few days back. See Expedia Reward Points Add Up To Peanuts. [↩]
