Guestmob: A New Level of Stupidity for Hoteliers?

This morning, we saw a FB posting from a good friend about a new website, Guestmob.com. Guestmob claims to offer prices "20-50%" lower than Kayak by pitting hotels "against each other for the right to fill empty hotel rooms"

Consumers enter the site and pick a destination and dates par usual, and then offered a selection of hotels grouped by star quality and neighborhood. Sound familiar to Hotwire or Priceline? Yes, except the hotel name and brands are exposed. As are the retail prices for these hotels.

Next, a consumer selects the area and star level they want to stay in and is taken to a confirmation page showing the selection of hotels that Guestmob will later solicit (like a mini RFP) for the consumer's stay:

3 days before arrival, Guestmob lets the consumer know which hotel has "decided" to let them stay.

Hoteliers: downward rate spiral, anyone? Haven't we seen this movie?

Lets dive a little deeper, however...

First, we doubt that all of these hotels are actually participating in this platform. We kinda doubt that the distribution hawks over at Marriott have embraced a less opaque version of Priceline when they don't even participate in Hotwire. As for the other brands listed throughout the site, good for Guestmob if they have really signed up these chains but we think they are probably shills.

Second, Guestmob is listing competing OTAs and their "pricing." We imagine that the OTAs will probably find this rather distasteful for obvious reasons.

Finally, for hotels that actually are participating in Guestmob, I ask one question: WHAT ARE YOU THINKING?

Hotels have been complaining for years about OTA margins and the lack of consumer brand loyalty. Opaque sales are an important revenue management tool but no one in the industry is particularly excited about growing the segment.

And yet, we still have hoteliers who apparently are seemingly not bothered by ANY of these issues and are willing to give street cred to what may be a very destructive model. Wow.

Priceline: "Name Your Own Price" Takes a Vacation

This morning Priceline announced a major change to their vaunted Name Your Own Price Model that has been the basis of their opaque hotel product since inception. Billed as a "limited time offer" until the end of March, Priceline is actually showing winning bids and allowing consumers to simply tag-along and buy the same thing, assuming availability still exists. No bidding, no guessing - just a posted price. Its not perfect because Priceline may not have availability for the dates you are checking (vs. what the last consumer bought.)

Yes, you read that right, a posted price. In the example below, Priceline is offering a 4 Star hotel room in Boston without any bidding. Not so much "Negotiation" here - just "Big Deals"

Scrolling down, a user can simply enter their credit card details and buy - on the same page. No bidding, no guessing. Again, the bid may not be accepted so it isnt fool-proof.

Priceline is pitching this as a limited time offer - but we've seen this movie before. Remember the first OTA to cut fees? Yep, that was Priceline and that was a "limited time" offer as well.

It would appear this business model simplification is a direct swipe at opaque competitor Hotwire.com (full disclosure: I formerly worked there) which has always used a similar no-bidding model.

And this will also take some of the gas out of "cheater" websites like www.biddingfortravel.com which have long suggested bidding price points for use on Priceline.com. Of course, biddingfortravel.com also posted which hotels actually fulfilled the bids - and nothing is changing regarding opacity during the booking process.

We'll see where this goes, but we doubt this is any more "temporary" than booking fee rollbacks were over a year ago.

Priceline's New TV Ad Brings Revenue Management 101 to the People

Today, Priceline.com launched a new TV ad campaign featuring a new Shatner side-kick known as "Big Deal." Not only is the Big Deal big, but he also appears to have a deep understanding of hotel revenue management (in addition to some really nice tats.)

In the spot, Shatner calls in Big Deal to help negotiate with a hapless front desk clerk who initially refuses the $65 price Shatner suggests. Big Deal intones "is it wise to allow a perishable item to spoil?" Shatner follows with "Is it wise to leave a room empty" to which Big Deal adds "The additional revenue easily covers operating costs." Shatner closes the negotiation with "$65 is better than no dollars." As you would expect, the clerk relents.

A rather high-brow discussion (lead by a decidedly low-brow, knuckle-cracking, meat head, no less) of the principles on which Priceline operates is an interesting advertising ploy. Educating consumers of the intricacies of the model is a first - some hoteliers are still trying to figure it out, let alone consumers. But it may expand the market if more consumers can get comfortable with how Priceline actually gets such good pricing.

And how will hoteliers react? Given the revenue they are seeing from Priceline these days, they will probably just take a deep breath and keep offering those $65 rates...

Watch the ad: