Duff on Hospitality Law

Our weekly Online Travel Update for the week ending Sunday, January 27, is below.  This week’s Update provides updates on both DOT’s and FTC’s recent rulemaking efforts around “hidden” industry fees.  Enjoy.

• • Google Updates Upcoming.  In an effort to comply with mounting pressure from the EU competition authorities, Google has agreed to make changes to the information displayed through several of its platforms and stores.  Specifically, Google Flights and Google Hotels will soon distinguish between services provided by Google versus third parties, make clear that Google Hotels does not verify or confirm guest reviews and comply with the transparency guidelines applicable to other online booking platforms. 
  • Objections Raised Over Proposed DOT Ancillary Fee Rules.  While industry trade groups have largely voiced support for increased transparency of ancillary fees, both ASTA and the Travel Technology Association have raised objections with the Department of Transportations’ proposed regulation on the same subject.  Specifically, both groups have raised objection with the draft regulation’s exclusion of global distribution systems.  The Travel Technology Association has also voiced concerns over the requirement that ancillary fee information must be displayed on the first page of search results, which, according to the Association, would make shopping extremely confusing for consumers, particularly for those using its metasearch site members.    
  • Five Thousand Comments and Counting:  FTC’s Notice of Proposed Rulemaking Garners Attention.  As comments to the Federal Trade Commission’s notice of proposed rulemaking on ancillary fees (including hotel and resort fees) continue to roll in, the FTC has elected to extend the comment period through February 8.  Anyone interested in reviewing the comments can find a searchable catalogue here - https://www.regulations.gov/docket/FTC-2022-0069/comments.

Have a great week everyone.  So great seeing so many people this past week in Seattle at HEDNA. 

Our weekly Online Travel Update for the week ending January 20, 2023, is below.  A new online cruise booking platform garnered most of the attention this past week, together with announcements regarding the continuing migration of group bookings to online platforms.  Enjoy. 

• • Are Cruise Passengers Ready to Book on Online Platforms?  Cruisebound says yes.  This past week, Cruisebound, the first online platform dedicated exclusively to ocean cruising (on 14 different inaugural cruise lines), was officially launched.   Historically, cruises have been thought to be too complicated to book online (e.g., multiple cabin types, fare codes, etc.).  Because of these complications, traditional brick and mortar travel advisors  have been the primary booking channels for most cruise lines.  Cruisebound intends to change that.  Backed by industry veterans, Jeff Boyd (Booking Holdings), Steve Kaufer (TripAdvisor) and Steve Singh (Concur) and led by the same team that founded Rocket Travel, Cruisebound hopes to attract first-time (younger) passengers through its easy-to-use online interface.  Customers who require additional assistance will access to a team of travel consultants.  In its initial testing, Cruisebound found that 91% of bookings were made via a mobile device and that the average age of customers was 36.  Both statistics are appealing to cruise lines seeking to extend their passenger demographics.  Cruisebound will earn its fees entirely through commissions paid by cruise lines and won’t charge passengers booking fees. 
  • Group Bookings Continue to Move Online.  Marriott and group booking platform, Groups360, announced this past week that 1500 Marriott properties in the United States and Canada will soon be available for online group bookings (both rooms and meeting space) through Groups360’s “Instant Book” platform.  Users of the platform will have real time access to hotels’ rates and inventory.  Although designed primarily for small meetings (i.e., 10-25 guestrooms on peak or meetings of 50 people), the platform also allows customers planning larger meetings to review hotels’ available inventory before submitting an RFP. 

Have a great week everyone.  I hope to see many of you here in Seattle at HEDNA’s annual conference. 

Our weekly Online Travel Update for the week ending January 13, 2023, is below.  This week’s Update features an interesting update on OTAs’ current loyalty programs and future ambitions and the recent (somewhat concerning) comments of Booking.com’s CFO regarding Booking.com’s ambitious plans for its payment platform.  Enjoy

• • OTAs’ Loyalty Ambitions Continue to Evolve.  PhocusWire featured this past week an interesting story on the evolving loyalty ambitions of the major distribution platforms – Expedia, Booking.com, Hopper and Airbnb (interesting to note that Agoda/Priceline, Trip.com or other large platforms did not make the cut).  Highlights from the article include (1) Expedia’s upcoming rollout of its new combined loyalty program, One Key, which will reward members with both upfront immediate discounts as well as loyalty program accruals that can be used for future bookings (including VRBO), (2) the anticipated cooperation among Booking.com’s existing loyalty program (Genius), its Rewards & Wallet program and its new payments platform to provide members both upfront discounts (up to 20% now and maybe larger in the future) and loyalty program accruals and (3) Hooper’s and Airbnb’s alternative approach to building brand loyalty via gamification (Hopper) and alternative service programs (Airbnb’s Aircover) without a traditional membership program. 
  • The Future of Booking.com’s Payments Platform?  The recent comments of Booking Holdings’ CFO, David Goulden, which were featured last week in Dennis Schaal’s weekly Online Travel Briefing for Skift, sent minor tremors through the hotel industry.  In his comments, Goulden blamed the slowing growth of Booking.com (in the years leading up to the pandemic) on its over reliance on the agency model (i.e., hotel collect model). Now, with Booking.com’s rollout of its payments platform (and its new merchant role), things may be changing at Booking.com.  According to Gould, the payments platform will allow Booking.com to better merchandise its products and services through various newly available “levers.”  More specifically, with regard to hotel rates, Gould noted that “we [Booking.com] relied entirely upon what we got from our property partners to give us great rate because its still primarily what we do, but we couldn’t participate in those more targeting pricing promotional activities, and now we can.” What should suppliers anticipate for 2023?  Rate discounts?  Instant credits or rebates?  Armed with recent (favorable) changes and clarifications in EU competition law, Booking.com is well poised to take advantage of any or all of these opportunities.       

Have a great week everyone.  

Our first weekly Online Travel Update for 2023 is below.  With many still celebrating the recent holidays, last week remained rather quiet in the online travel world.  Enjoy.

• • Booking.com and Expedia Mobile Apps Fare Well in 2022.  Mobile app downloads are one of the many metrics that industry analysts like to watch when evaluating online travel companies.  According to a recent report from Apptopia, both Booking.com and Expedia fared well in the United States in 2022.  Booking.com’s mobile app moved up one spot to fifth in 2022 travel app downloads, and Expedia’s app jumped two spots to seventh.   Last year’s industry darling, Hopper, fell five spots to ninth (not entirely surprising given the now ubiquitous nature of Hopper’s price prediction and fintech tools).  Expedia’s jump reflects a near doubling of annual downloads (16.6 million) over 2021.   American Airlines was the only travel supplier to make the United States top ten list, with 12.3 million downloads.  Internationally, Booking.com also faired well, coming in third in 2022 international travel app downloads.  Among the OTA apps, Booking.com was the most downloaded app in both the United States and internationally. 
  • Further Details on India’s Approach to Rate Parity.  A few months ago, we shared details of the Competition Counsel of India’s decision imposing heavy penalties against India-based online travel agent, Make My Trip (and its related companies) and ordering the removal of contractual rate and availability parity provisions in its supplier contracts.  This week we feature a story that goes into greater detail regarding the CCI’s decision and the factors it considered before rendering its decision.  A couple of key takeaways . . .  First, the CCI evaluated MMT’s behavior in the context of online intermediation services for hotel bookings in India (a narrow definition of the relevant market), not the much broader market definition proposed by MMT (a similar market definition issue is now before a Dutch court).  Second, the anti-competitive effects of MMT’s broad parity obligations, exclusive listing obligations and deep rate discounts (a trifecta of factors working against hoteliers and other competing OTAs) more than outweighed the so-called “free rider” concerns voiced by MMT.  Third, the fact MMT’s requirements may have been “industry standard” does not carry much weight if the distributor at issue has sufficient market power to determine the relevant market’s terms.  

Have a great week everyone.  For those of you traveling to Seattle later this month for HEDNA’s annual Global Distribution Conference, I hope to see you there.  I’ll be speaking on Wednesday morning on the new distribution regulatory environment.