Duff on Hospitality Law

What a week it has been. For those of you working around the clock to retain some semblance of your business and the travel industry together, we stand alongside you. Each day that passes brings with it a wave of new cancellations, news of mass furloughs or layoffs and, most recently, property closures. If we can help any of you deal with this onslaught, please let us know. We are trying to devise creative ways to support all of our clients through this incredibly tough period. 

Through all of this, we will continue to share those stories that we believe may provide direction as you continue to move forward. If there are topics of particular interest that you think we should include, we would love hear from you.  

Yesterday, March 23, 2020, Washington State Governor Jay Inslee announced that he will sign the statewide Stay Home, Stay Healthy Order (the "Order").

The Order requires every person to stay at home (unless they need to pursue an “essential activity”); bans all gatherings for social, spiritual and recreational purposes; and closes all businesses, except for “essential businesses.”

With all that has occurred in these past few weeks involving coronavirus (and its devastating effects on the travel industry and those within it), I had questioned whether I should suspend our weekly Updates until things have settled. After some consideration, I believe that there is probably no better time to provide this important information to our readers as they inevitably re-evaluate (and then re-evaluate again) their near-term and long-term plans for this new altered reality. I hope in some small way that our continued Updates are informative and helpful. If I can do things better or different, please let me know.

While this week’s Update does not include stories about Coronavirus and its potentially disastrous effects on the lodging and travel industries, I’m sure it will only be a matter of time. We are already hearing stories of distributors’ troubling responses to the outbreak.

Marketing Investments by OTAs Increase Again
(“Expedia Group, Booking Holdings spent more than $11B on marketing (mostly to Google) in 2019, Phocuswire on Mar 6, 2020)
For the past few years, we’ve reported on the staggering annual increases in marketing by the two largest OTAs – Expedia Group and Booking Holdings. This past year (2019) was no exception, although last year’s $400 million increase was almost exclusively attributable to Expedia. Combined, the two largest OTAs spent nearly $11 billion on marketing. Booking’s marketing expenses remained mostly flat (from $4.96 billion in 2018 to $4.97 billion in 2019), but Expedia’s increased significantly (from $5.57 billion in 2018 to $6.03 billion in 2019). A closer examination of Booking’s marketing expenses reveals that Booking’s “performance marketing” (display ads) investments decreased in 2019, while its “brand marketing” efforts increased. Not surprisingly, Google was the largest recipient of the OTAs’ marketing spend.

Our (travel-abbreviated) weekly OTA & Travel Distribution Update for the week ending February 28, 2020 is below. I’ll be back next week with our regular format. 

Booking Channels Rival Expedia and Will Cut Costs Too 
Skift Travel News on Feb 27, 2020
Like other travel companies, Booking Holdings officials are grappling with the fluid nature of the coronavirus and the negative impact on its business. And, like one other company, Expedia Group, that’s been making headlines about attacking internal bloat, Booking Holdings intends to get costs in line, although the extent of any budget trims wasn’t specified.