Why Priceline and Hotwire Conceal Hotel Names: The Secret Behind Opaque Pricing

Understanding the strategy behind hidden hotel names reveals how travelers get unbeatable prices while hotels boost earnings.

Product differentiation typically leads to higher prices and profits. Hotels often compete by offering prime locations, exceptional service, or unique amenities. Without differentiation, hotel rooms become interchangeable, pushing prices down.

So, why do platforms like Expedia's Hotwire and Booking Holdings' Priceline sell hotel rooms without revealing the hotel names? This approach, known as opaque pricing, is gaining traction as budget-conscious travelers seek affordable options for their trips. Opaque pricing applies not only to hotels but also to flights, cruises, and car rentals.

Key Insights

• Opaque pricing on Hotwire and Priceline conceals hotel identities, allowing hotels to offer rooms at discounted rates.
• Price-sensitive customers prioritize cost over brand, making these platforms ideal for bargain hunters.
• Hotels accept lower prices in exchange for guaranteed bookings and the chance to convert guests into loyal customers.

Targeting Price-Conscious Travelers

Customers using Hotwire and Priceline are primarily driven by price. These platforms leverage this by offering lower prices while keeping hotel names hidden until after booking.

This arrangement enables hotels to fill rooms that might otherwise remain vacant, increasing revenue per available room (RevPAR) without damaging their brand’s perceived value.

Maintaining Brand Value

Preserving rate integrity is crucial for luxury or upscale hotels. Selling rooms at discounted rates publicly could harm their brand image.

By concealing hotel names, Hotwire and Priceline allow hotels to discreetly offer lower prices, reaching both loyal customers and new budget-conscious travelers. This tactic helps maintain the hotel’s premium positioning.

Shifting Customer Loyalty

Opaque pricing can introduce price-sensitive guests to higher-star hotels they might not usually consider. If these guests enjoy their stay, they may become less price-sensitive and more loyal, willing to pay premium rates in the future.

Guaranteed Revenue Benefits

Bookings made through these platforms are typically nonrefundable, providing hotels with assured income and minimizing last-minute cancellations.

Additional Advantage

Bookings via third-party sites like Hotwire and Priceline often don’t qualify for loyalty points, saving hotels additional costs.

Helpful Tips for Travelers

Travelers hesitant about opaque pricing can research by comparing star ratings, amenities, and locations on traditional sites to shortlist potential hotels and decide if the savings justify the unknown.

What Is Hotwire?

Hotwire, owned by Expedia Group, is an online travel platform offering discounted hotel rooms through opaque pricing.

What Is Priceline?

Priceline, part of Booking Holdings, provides discounted travel services including hotel bookings and flights.

Understanding Opaque Pricing

Opaque pricing is a form of price discrimination targeting customers who prioritize price over brand details, allowing companies to sell at lower hidden rates.

Final Thoughts

For both hoteliers and travelers, opaque pricing via Hotwire and Priceline is a win-win. Hotels sell otherwise empty rooms discreetly at discounted prices, while travelers secure affordable stays. Additionally, satisfied guests may develop brand loyalty, benefiting hotels long-term.

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