Comments on: Priceline’s Sunshine Guarantee is Unique but That May Not be Enough

By: Brent

Brent — Thu, 24 Sep 2009 17:50:58 +0000

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.

By: Daniel

Daniel — Sat, 16 Aug 2008 05:58:43 +0000

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.

By: Nicholas Barnard

Nicholas Barnard — Wed, 11 Jun 2008 20:27:12 +0000

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..

By: Mike

Mike — Tue, 10 Jun 2008 23:58:03 +0000

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.

By: Casey

Casey — Tue, 10 Jun 2008 02:29:05 +0000

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.

By: John

John — Mon, 09 Jun 2008 16:39:54 +0000

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.

By: David

David — Mon, 09 Jun 2008 15:10:52 +0000

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.