I rarely write about hotels or vacation packages, but a recent press release from Priceline touting their Sunshine Guarantee caught my eye. 
At first, it seems great for a traveler. The brief explanation says “Book your summer vacation today and automatically receive this exclusive guarantee. If your vacation is rained out, your priceline vacation is free.”
Yeah, sounds great, right? But when you dig in, there are some pretty onerous conditions here. It can still be good, but if it causes confusion, it might end up angering more people than it helps. The biggest problem? It has to rain for at least half of the days on your vacation, and it has to rain 1/2 an inch each day. Wow, that’s a lot of rain. And a quick two day weekend package that gets one day of rain won’t work either. It has to be between 3 and 8 days.
Let’s say you decide to try for the free vacation and you fly to Maui and stay on the rainy side, you know, near Hana. Uh, no. The rain is measured at the airport, so that won’t really help. And besides, it’s only good July 1 through September 7 and that’s not exactly the rainy season over there (though it’s always rainy I suppose).
So is there much value here? Well yeah, there can be some. If you happen to get stuck in a slow moving hurricane, then it’s a good deal. But most other rain events might have you out of luck.
It’s funny that I bring up all these caveats. I mean, there was absolutely nothing there before this guarantee, so it’s all gravy. According to their 8K, Priceline is paying a flat fee to a company to use this service, and that company, WeatherBill, will pay out the claims. So it’s really just a good marketing campaign. But, if people misinterpret the campaign, then it could potentially backfire. If you have a weeklong trip that gets more than a half inch of rain for each of 3 days and then, say, 1/4 of a inch per day for the rest of the time, you won’t be able to collect. So, keep that in mind when you book. Don’t get your hopes up for a free vacation, but realize that if it’s truly a soaking experience, you won’t have to pay.
9 comments on “Priceline’s Sunshine Guarantee is Unique but That May Not be Enough”
Fairly simple (if restrictive) use of weather derivatives.
A classic example is the sale of snowmobiles in winter for those living in northern climes. You might want to buy one in November – but what if the winter turns out to be unusually warm and you wasted your money that winter ?
Snowmobile manufacturer thought of this, so sometimes offer a rebate if the tempterature over the coming winter is much warmer than the average (google for details on this). Manufacturer pays a small fee to a financial company as a form of insurance premium in case it really is very warm, but in return customer’s anxiety about whether it’s worth spending the money on the snowmobile is minimised and they are more likely to make a purchase.
Expect weather derivative type products to grow.
The only place I would consider booking is Hilo, HI. It’s on the rainy side, has an airport, and is on the list. However, although it rains there most of the year, it’s rarely over 1/4 inch. Priceline’s got a pretty safe bet with this one.
Coverage in Seattle, WA? wow. For every potential claim, i wonder if they will get off free because it was “an act of god” ? ;-)
The initial marketing looks slightly unethical/deceptive, but no reasonable person would think priceline had control over the weather. But im certain a lot of people have varying opinions on what being “rained out” means.
If people would just read the terms and conditions like they’re supposed to, this wouldn’t be an issue. I think it’s a good deal considering I’ve been on one of those vacations where we were stuck in a tropical storm the whole time. They should call it something different though. “Sunshine Guarantee” implies, well, a guarantee of sunshine. It should be called the “Severe Weather Guarantee” or something like that.
Mike if they were Guaranteeing Severe Weather that would be a good way to make sure they get no sales.
I just played around with WeatherBill but in almost every case historically it would’ve been a horrible deal for me.
That being said I’ll start selling these things next week if they can explain how much they sell on these things..
I agree this is a smart use of derivatives…but the critics here seem to be assuming this is some sort of scam from the outset. Reset your judging and consider what this program is really about, and then see the note at the bottom about the results:
A. This is FREE to the customer.
B. This is a product that will pay you only at a level where your vacation really is ruined. I’m sure Priceline’s goal is not to have people book trips to try to get rained on! It doesn’t take a hurricane to get a half inch of rain. I do agree Priceline needs to market this better because clearly some people don’t have an accurate perception of what a half inch of rain is (think constant drizzle/rain throughout the day…not downpour).
You don’t buy insurance because you expect it to pay you out more than your insurance premiums. This is protecting from a worst-case scenario where you spend $2k on a trip and you end up stuck in your hotel instead of on the beach.
Also, I did some more research on this and saw an interview in Travel Weekly (i think) with a Priceline exec where he said that in the first 2 weeks of the promotion, Priceline refunded 200 trips worth hundreds of thousands of dollars. To me, that sounds like a valuable promotion…not a scam.
Took a trip to SLC. Exceeded the rain fail requirement at the weather station nearest my hotel but was 1/10th short at the airport. Priceline did not honor the guarantee. I did not use Priceline to book a stay at the airport, but rather at a hotel. Will never use Priceline again. Will never watch Star Trek or BJ Hooker again.
That a pretty good marketing idea they have there. Like you said, it’s enough for the average person to think of how great it is but would be really difficult to claim anything.
If I worked at Priceline I wouldn’t do this. Not only are they going to have upset customers when they deny a claim, but they are going to have upset customers who just got back from a rained out vacation!
I would never look at that guarantee as anything other than a marketing ploy. In the event that it did rain every day I would be glad they had that program but I know going in that a vacation is a gamble…for many reasons.