By Lori Enos E-Commerce Times Part of the ECT News Network
02/01/01 4:27 PM PT
High-tech mogul Jay Walker launched
Priceline as an online travel service in
1998 with high hopes that its name-your-price business model
would be the 'wave of the future.'
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In a bid to refocus on its core travel business,
Priceline
(Nasdaq: PCLN) announced Wednesday that it had enhanced its
service to offer customers more convenient itineraries and
shorter connection times between flights.
The "name-your-price" e-tailer also said that it had hired travel
expert Pauline Frommer as a special advisor to
evaluate the company's services.
Priceline said the maximum layover time for each half of a
customer's trip is now three hours for
trips within the U.S., but that
following the upgrade, 85 percent of those layovers
will be be two hours or less.
Morningstar.com analyst David
Kathman told the E-Commerce Times that although Priceline's
changes are positive, "they need to do a lot more."
Bad Flight
Other changes announced by the company include a faster
response time and a shorter online order form. The
new response times, according to the company, will be
in most instances 15 minutes or less.
"As we announced earlier this month, we are listening closely
to our customers in order to make meaningful improvements to
Priceline.com," Priceline president and chief executive officer
Daniel H. Schulman said.
Kathman said that addressing consumer complaints is a big step for Priceline,
adding that one of the big problems
that consumers had with the company is that it does not "treat
you like a human being."
However, even with improved customer service , Priceline's
market is still "inherently limited" to college students and
other people who have a lot of extra time, but not a lot of
extra money, according to Kathman, because the tickets
Priceline sells call for travel
at off-peak times with several layovers.
Puffed Up
Priceline's "name-your-price" business model allows customers
to specify how much they are willing to pay for a ticket.
However, the drawback to using the service is that customers
cannot specify what times they want to fly, nor can they limit the number
of connecting flights.
Additionally, once consumers submit a
request for an airline ticket, they are obligated to purchase
it at their stated price, whether or not the flight meets with
their approval.
The requirement that customers commit to purchasing a ticket
before they know the details of their itinerary "turns a lot
of people off," according to Kathman.
Hot Air
Wednesday's announcement is not the only sign that Priceline is
listening to its critics. In December, the company
was reinstated
in the Connecticut Better Business Bureau, after being
expelled in September.
The BBB had reportedly received more than 300 complaints about
Priceline, ranging from misrepresentation of its
services to failure to make promised refunds.
Customer complaints also have sparked an investigation by
Connecticut Attorney General Richard Blumenthal.
Silver Lining
The good news for Priceline is that according to
analysts, the company is not going to run out of money anytime
soon.
Priceline closed Wednesday at US$2.66, down 31 cents. However, during
the past year Priceline has traded as high as $104.25.
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