Interesting New Hotel Bidding Service

Most people are familiar with Priceline, if only for the corny William Shatner commercials.  They’ve carved out a space in the travel industry by allowing people to bid on their travel.  The downside for me with Priceline is that you generally don’t knowwhereyou’re going to end up with a winning bid.  It might be a great property, as there are some gems in the Priceline system.  Others are duds.  Once you bid and win, you generally own the reservation without being able to cancel.

There’s a new service in Beta called BackBid.  You can read more about it here in the USA Today.

Essentially, you book a refundable room at a hotel in the city you are traveling to.  Then, you provide BackBid with your stay information.  They send that info out to a number of hotels in the area you’re staying so those individual hotels can bid on your stay.  I think this is a pretty interesting concept, with a few positives and negatives:

• Refundable hotel rates are generally not the lowest a hotel has at any given time.  So, using that rate as your “bargaining” rate may not yield a rate ultimately lower than the lowest rate available at your first choice property.
• Since BackBid is sending your info to the actual hotels in the area, you should get more competitive rates.  If someone at the property is inspecting rates, they know their occupancy, and more importantly, how much the rooms they already have booked are paying.  They may be willing to take a bit of a lower rate to fill a soft spot, or drop the rate if they already have a higher daily rate because of an expensive group in house.  Either way it should work out to the customer’s advantage.
• The site doesn’t have a ton of cities covered yet, so only limited usefulness.
• We really don’t know how many hotels BackBid has in their system for any given area.  The USA Today article indicates that the author did fairly well with his Chicago bid.  And, the Hyatt Regency Chicago is a nicer property than his original reservation at Holiday Inn Midway.

This may turn out to be a passing fancy.  There are a ton of travel sites that come and go.  In theory, this one already has a revenue stream, since it almost certainly earns a commission from a hotel when they win a “bid”.  So, maybe it will be around long enough to see if it’s worthwhile.