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Web 3.0 and Priceline

Posted on Wednesday, May 2nd 2007

We have been discussing the online travel industry and have covered Yahoo! Travel, TripAdvisor, Travelocity, Orbitz and Expedia from a Web 3.0 perspective earlier. Here we will take a look at Priceline’s offering.

Priceline founded in 1997 is an online travel agency headquartered in Norwalk, Connecticut. The site provides a wide array of travel services and is very popular among value conscious leisure travelers. In 2006 Priceline received an award from Network World magazine for data center innovation.

Context
The site revolutionized online booking of hotels, flights and cars by allowing consumers to name their own prices for everything from hotels to flights to rental cars. PriceBreakers and Name Your Own Price are good features considering the fact the site is targeted at value conscious leisure travelers looking for best deals.

Clearly, by focusing on the leisure traveler who has flexibility, Priceline has been able to capitalize on a differentiated offering that leverages that nuance. Business travelers would hardly have the flexibility necessary to adjust their dates based on price and availability. Thus the intelligent harnessing of contextual psychographic really enables a layer of business model innovation not envisioned in the past.

Content
Priceline is one of the leading travel service agencies, operating in 40 countries and in 12 languages and offers its customers information on more than 25,000 participating European hotels. The country specific sites serve localized content.

Priceline is the only travel agency in the world where customers can name the price they are willing to pay for airline tickets, hotels, car rentals, etc. With Name Your Own Price, the user may quote an amount. Priceline will search for all the travel solutions available in that range and find services within the quoted sum. An email is sent to the consumer with information of the tickets that can be purchased. However there is a catch: Priceline doesn’t disclose the name of the Hotel until you book the ticket and there is no refund if you cancel the tickets. Priceline, however, provides intricate details of the facilities available in the hotels, like broadband Internet service or currency exchange facilities.

The hotel reviews are good. The Tours & Attractions category allows me to book tickets for a sunset dinner at Sydney Harbor or a show at Moulin Rouge in Paris and provides me with the full listing of the timings of the shows, descriptions, travel tips and car rental rates from all nearby airports.

Community
Priceline along with MyTravelGuide has a very useful travelers’ forum, which is functional and at the same time enjoyable. MyTravelGuide allows users to plan their trips, customize and collaborate on trip planning, share past experiences, hotels and photos, with friends and millions of people. MY Places has tools to quickly find, research, save, and organize the places that interest users the most. Consumers are also free to rate tours, make recommendations, provide and receive tips on travel from MyTravelGuide.

Commerce
Priceline earns commission from the sale of airline tickets, hotel rooms, rental cars, cruises and other travel services.

Personalization
Priceline users can register on MyTravelGuide and receive newsletters, plan their trips, share traveling experience, photos, rate tours, make recommendations, receive tips and latest news on low fare or discount schemes. The PriceBreakers page enables the users to receive e-mail and alerts for best travel deals. Nothing earth shattering though.

The sign in process is too lengthy, time consuming and asks for too much of information including zip code, credit card no, two telephone numbers. This is too much for a first timer, and navigation is really very poor.

One thing that could be nice in terms of personalization is a combination of their Name Your Own Price feature along with a Personal Concierge service, so that if I name a destination, and a budget range, and some flexible date ranges, a Priceline agent can create a full itinerary for me within that price range, and per my specs. Because of their existing arrangements with various travel services providers, they may be the most unique position to offer such custom solutions.

Vertical Search
Vertical search features in Priceline seem more user friendly than TripAdvisor or Orbitz with country wise search options but then the context specific search is still nothing to write home about.

Business Model
Besides its commission revenues, Priceline earns revenues from advertisements on its site and its ad rates are CPM based and similar to what the other online travel agencies command. The site is ranked 1,782 as per Alexa rankings. Priceline has also licensed its technlogy and business model to a privately owned company, Priceline WebHouse Club. The company offers a name-your-own-price service for groceries for shoppers in 1,100 grocery stores in the New York metro and greater Philadelphia areas.

Web 3.0 Rating: Context: A; Content: B+; Community: B+; Commerce: A-; Personalization: B-;
Vertical Search: C; Overall Rating: B+

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[…] online travel industry and have covered Yahoo! Travel, TripAdvisor, Travelocity, Orbitz, Expedia, Priceline and LonelyPlanet from a Web 3.0 perspective earlier. Here we will take a look at the popular travel […]

Sramana Mitra on Strategy » Blog Archive » Web 3.0 & Travel Search Engines Friday, June 1, 2007 at 6:35 AM PT

I used to be a fan of of priceline. But lately they have disappointed me terribly to the point of anguish

FK priceline. They made me pay the full amount of $400 for the hotel stay that I didn’t even bid for because of a fKing system glitch. I hate them and won’t ever use them again.

jule Thursday, March 20, 2008 at 11:13 AM PT

[…] year ago, I had wondered if Priceline (PCLN) would ever reach its all-time dot.com high of $104/share again. It had already soared new heights […]

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