Andrew Sullivan had a very bad hotel experience with Priceline. He delayed his trip a day and the hotel wouldn’t let him start his stay when he arrived. He lost all his money. Frustrating, but his analysis of Priceline’s business model is just wrong:
- the profit margin is obviously highly correlated with suckers and incompetents like me.
Priceline doesn’t make more or less depending on whether someone shows up for their reservation. Priceline makes money from their booking fee, from a commission charged to the hotel, and from any overbid (the difference between a successful bid and the highest applicable rate that bid allows Priceline to book). (Link via Spot On.)