Efficient Markets in the Hotel Business (Fun stuff)

Posted on April 23, 2009

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For some travel up to Portland, OR this week, I used the Priceline.com “name your price” feature.  With the economy a little slow, I’ve found that you can get some outstanding deals on 3 and 4 star hotels. ($65/night for the Paramount in Portland and $75/night for the Westin DFW a couple weeks back.)
So what does that have to do with free markets? Everything!

After my bid was accepted on Priceline.com, I was offered the option of posting my successful bid on my personal Twitter account to share with my Twitter followers so they could see the great deal I got. (Priceline’s Twitter handle is @TheNegotiator)

Guess what? Within in minutes, I got a message from @BidLessTravel which is a website that tracks Priceline bids – both accept and declined – so travelers can research what to bid on Priceline.com.  With just a few data points supplied by users on BidLessTravel.com, users can quickly see the market-clearing prices for hotel rooms based on location and quality.

The faster that information is spread throughout a market (the market for hotels), the more quickly prices are determined.  What’s more is that BidLessTravel.com found a business opportunity in the Priceline model.  Love to see when free markets spur innovation and private ventures fill the market gaps naturally.

Posted in: Fun Stuff