Duff on Hospitality Law

Last week was earnings release week for three of the major online travel platforms – Expedia Group, Booking Holdings and Tripavisor. This week’s Update includes transcripts from the three platforms’ earnings calls as well as several leading industry perspectives on the platforms’ recent quarterly performance. Enjoy.

A few immediate takeaways from two of last week’s earnings’ releases…

This week’s Update features stories on the divergent paths of two of the leading metasearch sites – Kayak and Trivago – and updates on recent efforts by airlines JetBlue and RyanAir to grow their direct bookings. Enjoy.

Two Metasearch Sites, Two Different Paths
("Trivago and Kayak Split Over Travel's Metasearch's Future," July 30, 2021 via Skift Travel News) (subscription may be required)
To diversify or remain focused on your core business or target customer seems to be a frequently asked question by many of the largest online travel platforms, particularly now as these platforms seek to re-establish critical post-COVID revenue streams. The latest example is Trivago’s recent launch of its new local content (e.g., local concerts, theater and other activities) in the United Kingdom to inspire and attract travelers’ interest before booking, while Trivago’s main competitor, Kayak, remains focused on travelers ready to book their trip. How long will these metasearch giants pursue these different strategies? Which strategy will prove best? It is too early to tell. 

It was a relatively quiet week in the online travel world. Booking’s announcement last week about its launch of a new fintech business spurred several additional stories last week, two of which are included in this week’s Update. Enjoy.

Much Ado About Nothing: Tripadvisor Plus Announces Initial Partners  
("Tripadvisor Plus Signs Its First Hotel Chains But Those Missing Are a Bigger Story," June 14, 2021 via Skift Travel News) (subscription may be required)
Recently, Tripadvisor announced that it had signed its first three hotel groups to its subscription service, Tripadvisor Plus: Barcelo Hotels, Millennium Hotels and Pestana Hotel Group. While these three groups represent an additional 500 new hotels for the service, Tripadvisor Plus has yet to convince any major supplier to join the service. Tripadvisor claims it continues to have many “positive conversations” with major suppliers about the service, though, at least publicly, nothing has yet come from those “conversations.” Until then, Tripadvisor will have to continue relying on rates and inventory sourced from other intermediaries like Trip.com, Getaroom and Internova. Suppliers wishing to avoid the new subscription service will need to remain vigilant in their efforts to monitor and possibly curtail the onward distribution practices of these (and other) existing distribution partners.   

This week’s Update features details on two recently filed lawsuits — one by American Airlines against Sabre and the other against Southwest Airlines by airfare discounter, Skiplagged. Enjoy.

Continued Inventory Shortages Cause Vrbo To Get Creative
("Vrbo Adds Hotels to Fill In Vacation Rental Gaps," July 8, 2021 via Skift Travel News) (subscription may be required)
For several weeks now, we have included stories highlighting the mounting inventory shortages in vacation rentals. Travelers cannot seem to get enough of these unconventional (or maybe not so unconventional any more) accommodations. In an effort to address these shortages, particularly in high-demand resort markets, Expedia Group’s Vrbo is now featuring traditional hotel accommodations — Holiday Inn Express, La Quinta Inn & Suites, Extended Stay America, etc. — in its search results. According to Expedia Group, Vrbo is sourcing these guest room accommodations both through corporate, portfolio-wide agreements and individual property agreements. Hotels featured on the site can elect to have Vrbo collect payment in advance, or the hotels may collect payment directly from the guest. Does this officially signify the transition of vacation rental platforms to becoming just another online distribution channel (like all other distribution channels)? It isn’t clear.    

This week’s Update features a variety of stories, including details on the recent change in leadership at Booking.com in the Asia-Pacific region. Enjoy.

Spanish Hoteliers Cry Foul
("Hotels in Spain sue Booking.com for 'abusive practices' – '40% more than real price'," June 22, 2021 via Daily Express)
The Madrid Hotel Business Association recently announced that it had made claims against Booking.com to the Spanish competition authority, asking the authority to investigate the online travel agency’s practices. The claims center around Booking.com’s rate parity requirements (which the Association alleges result in booking prices 40 percent higher than its members’ own prices), and the degree of control that Booking.com’s website wields over the hotels’ guests – booking management and (now) payments. The Association’s complaints came on the heels of similar claims made by the Spanish Association of Hotel Directors.     

This week’s Update features a number of important stories, including details of Tripadvisor’s official launch of Tripadvisor Plus in the United States and an important update on the 1-800 Contacts FTC enforcement action. Enjoy.

Hopper Introduces Price Lock for Hotels
("Hopper enables commitment-free hotel price lock," June 17, 2021 via Phocus Wire)
Hopper, the mobile application that is home to the flight price freeze, flight delay protection and fully refundable air and hotel bookings, is now launching a hotel price freeze. The option allows travelers to freeze a hotel’s listed rate for up to 60 days. Travelers who “freeze” a rate are protected if the rate increases (up to $100 of any increase) and benefit from any rate decrease. If the traveler proceeds with the booking, the traveler’s price freeze deposit is applied to the room charge. If the traveler abandons the booking, the price freeze deposit can be applied to any future booking made within 60 days. Bookings of locked prices are always subject to availability. The new pricing functionality is available for all hotels listed on the Hopper platform. Hopper may have picked exactly the right time to introduce this new pricing product as hotels seek to drive rates coming out of the pandemic.

This week’s Update features two stories detailing the role that online buy now pay later companies hope to have in the travel industry’s recovery.  Enjoy

Booking Holdings to Repay Pandemic Aid
("Booking Holdings to Repay $110 Million in Pandemic Aid After Dutch Criticism About Bonuses,"June 4, 2021 via Skift Travel News) (subscription may be required)
Last week, in a Securities and Exchange Commission filing, Booking Holdings, Inc. announced that it plans to repay $110 million in government aid ($78 million of which came from the Netherlands) that it received during the pandemic. The announcement came after the Dutch parliament had raised concerns about the compensation packages that were paid to CEO, Glenn Fogel, and CFO, David Goulden in 2020.

This week’s Update features a couple of stories (including one by Seattle’s own Geekwire.com) detailing the recent executive shake up at Expedia.  Enjoy.

Expedia’s Re-Structuring Continues
("Expedia Group Hires Top Execs From Apple and Verizon as Part of Leadership Structure Overhaul," May 24, 2021 via GeekWire; "Expedia Trims Business Units, Sees a Trio of Executive Departures," May 24, 2021 via Skift Travel News (subscription may be required))
Over the past few weeks, we’ve featured stories detailing Expedia’s ongoing re-structuring efforts. Last week saw another big change at Expedia as the company announced the departures of veterans, Cyril Ranque, Adam Jay and Tucker Moodey.  Ranque’s departure is particularly interesting as Ranque, the Travel Partners Group President, had been featured prominently in many supplier contract issues and negotiations. Joining Expedia are two top executives from Apple and Verizon, Jon Gieselman and Rathii Murthy, respectively. Gieselman will oversee the newly created business unit, “Expedia Brand,” while Murthy becomes Expedia’s new Chief Technology Officer.  With these changes, Expedia also announced the creation of four new consolidated business units or “key pillars” within Expedia – Expedia Services, Expedia Brands, Expedia Marketplace and Expedia for Business. It will be interesting to note where Expedia’s products and services fall within these units and how the units will work together to sell these products and services to their key supplier partners.   

This week’s Update contains a variety of stories, including details of a recent court win for German hoteliers and the recent musings of the always entertaining, Barry Diller. Enjoy.

Barry Diller’s Latest
("Expedia’s Barry Diller on Biz Travel Doubters: ‘They’re All Dopes’," May 21, 2021 via Skift Travel News (subscription may be required))
Last week, in a CNBC interview with Expedia Group chairman, Barry Diller, he shared his latest views on the return of travel. Diller, like many, believes that leisure (consumer) travel will be the first to return. Diller did take issue with those that speculate business travel will never return. Barry’s assessment? “They’re all dopes.” Many in the airline industry share Diller’s view on business travel with several predicting a return following the Labor Day holiday. 

This week’s Update features a number of stories and perspectives on last week’s earnings releases from Booking Holdings, Expedia Group and Tripadvisor. Enjoy.

Key Takeaways: Booking Holdings' First Quarter Earnings Report
For those of you interested, we’ve included transcripts from last week’s earnings calls for both Booking Holdings and Expedia Group. For those of you who don’t pour through financials (myself included), I find the earnings calls very informative. My key takeaways from last week’s Booking Holdings’ call are below:

• • For years, analysts have speculated that Booking Holdings was first and foremost a European distributor, but now we have some actual numbers to prove it. According to Booking Holdings’ CFO, David Goulden, slightly more than 50 percent of Booking’s pre-COVID business came from Europe. As for other regions, Asia has historically accounted for approximately 20 percent of Booking’s pre-COVID business (no single country accounting for more than low single digits), and the rest of the world (including North America) has accounted for the remaining 30 percent (pre-COVID).
  • Booking continues to make strides in the North America, particularly in the United States, which was Bookings’ strongest performing major country in the first quarter, with room night growth in Q1 2021 exceeding growth in Q1 2019. Both Priceline and Booking.com reported strong first quarters in the United States.
  • Booking remains focused on its core strategies by growing the Booking.com brand in the United States, and continuing to expand adoption of its payment platform and building out the “Connected Trip.”
  • Booking points to its current Booking.com’s “Back to Travel” campaign, which launched in April and features a $50.00 post-stay travel credit for U.S. travelers booking through the Booking.com app. This initiative sets an example for possible future promotions that could help grow Booking.com’s business in the United States and possibly other markets. Other efforts include the continued growth of Booking.com’s vacation rental inventory. As for the payment platform, CEO, Glenn Fogel reported continued growth (just over 20 percent of bookings) of the integrated platform via increased adoption by Booking.com’s U.S. supplier partners. In 2020, the payment platform operated close to breakeven, but through other monetization opportunities, Fogel expects the platform to lead ultimately to incremental EBITDA growth. Finally, Booking’s continued focus on growing its non-accommodation products, particularly flights this past quarter, will be critical in establishing Booking’s “Connected Trip” vision – and capturing potential travelers further “up funnel”.