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Online travel operators offer creative but risky incentives

Jun 23, 2008

Concerns over a potentially dreary summer business have forced online travel sites such as Expedia and Priceline to try offering creative, although possibly risky, new incentives. Risky for them, that is.

If you’re concerned that rain could ruin your long-overdue vacation, then look to, which is offering a “Sunshine Guarantee.” On June 2, the Norwalk, Connecticut online agency announced that customers will be refunded 100% of the price of their vacation package if it rains for more than a half inch on at least half of the days they’re on vacation. The offer is valid for trips that are purchased by July 17 and are taken by September 7.

There are more than 100 destinations that qualify for this offer, including places such as London and Seattle that are notoriously rainy. “They are trying to address pain points,” clarified Caroll Rheem, the director of research at the online travel research company, PhoCusWright. “They’re trying to eliminate reasons consumers have for not booking a trip.”

It already looks like it’ll be a bad summer for the travel industry in general. At the beginning of the season, a 1.2% decline in domestic travel was predicted by the Travel Industry Association, but it now seems that the decline will be even greater. Since the time of their prediction, the price of gas has continued its steep climb and airlines have raised fares and baggage fees, and cut back on flights – all to make up for the rising costs of jet fuel.

These rising costs are forcing online travel agencies into more creative and aggressive measures, including offering passengers more guarantees and reducing or eliminating booking fees. “We’ve eliminated fees on airline tickets, reduced fees on hotel rooms,” reported Jeffrey Boyd, the chief executive of “We think customers are concerned about high prices and we’re trying to give them a little bit of a discount.”

Online travel operators offer creative but risky incentives

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