Hotel auction website Off & Away is changing some of its practices to benefit the losers.
The company actually wants to turn losers into winners.
That is, Off & Away is making it easier for people who don't win its auctions to use 110% of the money they spent on bids to book a hotel room.
Launched in May, Off & Away runs sales of limited duration for the swankiest rooms in four- and five-star properties, and consumers need to purchase a pack of bids to compete in the auctions.
Recent auctions have included a one-night stay at the Madison Premier Room at The Carlyle in Manhattan.
And, a two-night stay in the Classic Suite, with a $300 resort credit, at the Acqualina Resort and Spa in Miami, went for $1,094.
Of course, there is only one winning bid for each sale so Off & Away previously allowed the losers to put 110% of the bid money they spent on an auction to book a room within seven days at any of the 50,000 hotels offered through an online travel agency affiliate program.
Well, apparently too few consumers -- and particularly those who spent $1 to $20 on bids -- were allocating the funds for a room booking. They were walking away with nothing -- except perhaps visions of the luxurious digs they weren't able to visit.
So, under new rules, consumers can combine bid credits from multiple auctions -- instead of just one auction -- and they have 30 days to book a room, instead of the previous seven-day limit.
Are the tweaks a sign of weakness that perhaps this type of action model is not working?
Off & Away co-founder and CEO Doug Aley says the changes come about because of customer feedback and because the company, which earns about half of its revenue from the auctions and the other half from commissions on hotel bookings, wants customers to use the bid credits.
"We want the customers to be able to use that money to purchase something," Aley says.
He adds: "The model is definitely working -- for customers, partners, and us. We're just never satisfied with people walking away from the site without having a fantastic experience, so we're working to make it better for all customers."
Aley says Off & Away is on or ahead of target for every metric that the company tracks, although he declined to detail dollar figures.
He did say that the Seattle-based website, which received about $1.35 million in funding from the Madrona Venture Group, attracts about 5,000 unique visitors per day and that fewer than 100 people participate on average in each auction.
The winning bid usually amounts to about an 89% discount off the retail room price, Aley says.
Apparently, some auction participants felt frustrated because the auctions could drag on for some time. Previously, every time a bid came in, a reset timer increased the auction length by 30 seconds.
Aley said the reset timer has been mofified to 20 seconds and that has decreased the length of the average auction by 33%.
The site now offers 100,000 hotels globally for booking -- up from 50,000 U.S. hotels at launch.
The business is in expansion mode, Aley says, as it looks to slot in some developer, merchandising and operations new-hires to supplement its existing 12-member staff, Aley says.
With half of its money made from the auction bidding featuring direct deals with auction partners, Off & Away is looking into ways to expand its inventory into post-auction add-ons such as gift certificates for hotel spas and restaurants.
"We've heard from partners that they want heads in beds and keeping revenue in that hotel," Aley says.
Other additional booking options may include high-end destination activities, including private helicopter tours.
Call them post-auction ancillary services.