Weatherbill, the online service offering weather protection to businesses, has arranged a novel deal for Priceline.com Inc. (NASDAQ: PCLN), a leading online travel agent.
Priceline are offering a new holiday package called Sunshine Guaranteed to over 100 destinations in the U.S., Canada, the Caribbean and Europe. The deal, being run as a limited time promotion, allows customers who book a qualifying holiday package with Priceline between June 2 and July 17, 2008 and travel between July 1 and September 7, 2008 to be eligible for a refund if their vacation is rained out. There is no additional charge to book a Sunshine Guaranteed holiday package. Packages must be 3-8 days in length. Travel has to commence at least 12 days after a package is purchased (so no late deals). If it rains more than half an inch per day on half or more of the days of the holiday Priceline will refund 100% of the cost of flights, hotel, car rental and attractions and services components of the holiday.
Rainfall amounts are measured at the destination airport of the vacation. The daily amount of rain that falls at the destination airport will be determined from measurements provided by the National Weather Service or other independent agency. Rainfall will also be audited by a private independent provider of weather information. Priceline will automatically check the rainfall amounts and issue refunds within three weeks of return from the holiday. Customers even get a custom link so they can track their own rainfall online.
Details of the Sunshine Guaranteed package can be found here on the Priceline website. The full press release from Priceline is available here.
It’s great to see the benefits of weather insurance cover being passed on to customers of a travel company. The travel industry has massive potential for novel covers such as this and with tools such as weather derivatives and futures readily available to back up these innovations I’d hope to see the idea expand to other travel agents and tour operators.
Weatherbill are doing great things in the weather risk management arena and by providing so much of their service online are making it more accessible than ever before.
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