Priceline’s co-founder Jay Walker left the company in 2009 but has recently launched a business travel service called Upside. Upside specifically aims to book business travelers who are making their own travel arrangements and will need to send data to their employers for reimbursement.
The service offers enticement for booking discount travel such as gift cards and package deals, which then serves to save money for the company’s who are sending their employees on business trips. Jay estimates the business travel industry is worth $165 billion just in the U.S.
Jay spoke to Fortune magazine about the new venture, explaining how it works on their end.
“We buy travel at wholesale using private deals. Airlines and hotels are willing to discount to get the business traveler in part because they can substitute that business traveler for a less valuable leisure traveler in our system…By selling your air and hotel together, we can pass 90% of that discount along. We make our margin that way. Say a flight’s $1,000—we might buy it for $850 and sell it for $900.
That satisfies the sellers and the employer. But what about the traveler?…So we pass part of the discount to the employer and part to the traveler, in the form of free gift cards, as a thank you. Notice this doesn’t change our profit margins. We’ve aligned interests. So we can make more money if we can show you how to spend less with our preferred providers, where we have a much better deal.”