Toby Gottfried: ‘I’ve been using Priceline, too, and at $95 for a room in Los Angeles I think you’re paying too much. Have you seen It’s a Priceline advice and strategy site. See also Recent examples: Hyatt Regency Monterey, CA: $60 + tax + Priceline = ~$72 total. Sheraton Universal: $51 + tax + Priceline = ~$63 (but $12 for PARKING!).

‘As for this being bad news for hotel stocks – they can simply stop (or limit) sales via Priceline if it gets too cheap. As it is, they are just dumping excess inventory. Their marginal cost of renting a room is much less than even highly discounted prices.’

☞ Well, yes and no. Take this example: I was supposed to go to a conference recently with a $170 group rate. I would certainly have paid that, but because of Expedia, I was able to pay $99 instead. By my reckoning, the hotel came out $71 shy of where it would have been otherwise – even assuming Expedia passes on the full $99, which it presumably does not.

If business travelers get into the habit of checking for cheap rooms, they will wind up paying less for than they otherwise would have. Only to the extent these low prices actually encourage more travel can this be good for the hotels. And my sense is that low airfares meaningfully stimulate travel – look at this! United has a new Oakland to Dulles fare for under $300 round trip! let’s fly to Washington for dinner! – but that low hotel rates do not have the same effect.

Because hotels and airlines have such huge fixed costs and modest marginal costs – could it cost more than $25 to clean a $300 room and resupply the little shampoos? – there is a natural tendency toward disastrous price competition, which Priceline and Expedia only exacerbate.

But all this is great for the consumer.

One big advantage of Expedia over Priceline that I forgot to mention yesterday: If your plans change, Expedia lets you cancel for just a $25 processing fee (or a single night’s stay if canceled with less than 72 hours’ notice). With Priceline, by contrast, you’re just out of luck.

See, also:


Bill Dunbar: ‘Sorry this has no attribution, but here’s one you might like.’ [The bracketed comment near the end is Bill’s.]

The Texas Three-Kick Rule

A big-city California lawyer went duck hunting in rural Texas. He shot a bird, but it fell into a field on the other side of a fence. As the lawyer climbed over the fence, an elderly farmer drove up on his tractor and asked what he was doing. The litigator responded, “I shot a duck and it fell in this field, and now I’m going to retrieve it.”

The old farmer replied. “This is my property, and you are not coming over here.”

The indignant lawyer said, “I am one of the best trial attorneys in the U.S., and if you don’t let me get that duck, I’ll sue you and take everything you own.”

The old farmer smiled and said, “Apparently, you don’t know how we do things in Texas. We settle small disagreements like this with the Texas Three-Kick Rule.”

The lawyer asked, “What is the Texas three-Kick Rule?”

The Farmer replied. “Well, first I kick you three times and then you kick me three times, and so on, back and forth, until someone gives up.”

The attorney quickly thought about the proposed contest and decided that he could easily take the old codger. He agreed to abide by the local custom.

The old farmer slowly climbed down from the tractor and walked up to the city feller. His first kick planted the toe of his heavy work boot into the lawyer’s groin and dropped him to his knees. His second kick nearly wiped the man’s nose off his face. The barrister was flat on his belly when the farmer’s third kick to a kidney nearly caused him to give up.

The lawyer summoned every bit of his will and managed to get to his feet and said, “Okay, you old coot now it’s my turn.”

[I love this……….]

The farmer smiled and said, “Naw, I give up. You can have the duck.”


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