Want to book a five star hotel anywhere in the world at a 60-70% discount?

If you answered yes, then the Priceline Name Your Own Price tool is your new best friend.

If you have flexibility as far as which hotel you can stay in, Priceline.com’s “name your own price” section can save you hundreds of dollars per stay.

What is it and how does it work? 

It’s a bidding system in which you go to the Priceline website, locate your destination, and bid on deeply discounted options for the hotels in that area.

Hotels give their unwanted inventory to Priceline to sell at a steep discount to get at least some revenue.

Priceline does not let you select a specific hotel however you can select the neighborhood (Priceline calls these Zones) within the city you're traveling to and the quality of the hotel (in stars).

Step 1: Choose Where You Want To Stay

A city map will come up with a number of zones. You can click on a zone to zoom in on it. Do this for any zone you’d consider staying in to make sure you are willing to stay in the entire zone.

Why? Because if you bid on a zone and win, you could end up with a non-refundable charge on your credit card for a stay anywhere in the zone.

Once you have your zones you'd like to stay in, check their boxes.

Step 2: Choose the star level for your hotel

Now decide which quality hotels you want to stay in. The Priceline star system does not necessarily correspond to any other star system, so click on each star level to learn about it and see what brands fall under that star level.

Step 3: Name Your Own Price

To make a bid, you have to give your credit card info because if your bid is accepted, the hotel is booked. You are given the hotel information, and a non-refundable charge is made to your card.

Now here is the secret…

You can only bid once per day. So if you want to book a five star hotel in New York City and you bid $50 hoping for a crazy deal, if Priceline rejects your bid you now have to wait 24 hours to make another bid. This is to prevent people from gaming the system and to keep you from bidding and increasing your bid $1 at a time until you find the price at which a bid is accepted.

Luckily there are two circumventions to the one-bid-per-day rule. The first is that you can add lower quality hotels and bid again. This is not the method we'd recommend.

The second and the best method, according to Scott is that you can change your bid. You do this either by adding a lower quality hotel star level OR adding a new zone and biding again.

Here's how that works:

In every city, there are multiple zones. By identifying the zones in the city that do NOT have the hotel quality you're looking for you can earn free re-bids.

As an example in New York City, if we were to added Greenwich village t to our new bid we would earn a free rebid. This is because there aren't any 4.5 star hotels in Greenwich which is what we're bidding on so it allows us to slightly up our bid for where we want to stay  – Chelsea neighborhood – without putting us at risk of getting stuck in a zone we don't want to stay in.

As far as bid strategy goes, I’d recommend deciding what the maximum amount you’re willing to pay is and breaking it down into the same number of bids as there are free re-bids in the area you’d like to say. For example if in New York there are 5 zones that don’t have 4.5 stars, that gives me 5 free re-bids. If I don’t want to pay more than $200, I’d maybe start at $40 and raise my bid by $40 each time.

The most likely outcome is that your bid will be rejected. But don’t give up just yet. You have as many free rebids as you have zones without your quality hotel or higher. I would space out my rebids so that I go from my original bid to the highest price I’m willing to pay over the course of those four bids. So if you were willing to pay $200 per night, I would make the rebids $80, $120, $160, $200. If you had a surfeit of free rebids, you would just add $4 or $5 to your bid each time.

Common wisdom is that once Priceline counteroffers, you can usually get the room for about half the difference between your last bid and the counteroffer. At this point, decrease the amount between your rebids to a few dollars. Priceline will eventually accept one of these free rebids at a level below their counteroffer, and you’ve probably saved hundreds on a multiday stay.

About Scott Grimmer:

This blog post was created from an Interview with Scott Grimmer, an airline miles expert and avid traveler who has been featured on Forbes and Huffington Post. Scott has just released his first digital course Fly Free in First which shows you how to collect, redeem miles and book your first flight for free in the next 60 days.