Duff on Hospitality Law

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. 

Happy New Year! We are once again providing a roundup of some of the major developments and trends in the online travel industry that caught our attention this past year. Wishing everyone a successful 2023. 

- Greg Duff
 

Our weekly Online Travel Update for the week ending December 23, 2022, is below.  As our short list of stories highlights, last week was a relatively quiet week in the online distribution world.  Enjoy.

• • DOT Extends Comment Period for Proposed Rule on Airline Ancillary Fees.  For those of you who have followed our updates on federal rulemaking around ancillary fees in the travel industry (both airline and hotel), you’ll recall that before the FTC announced its plans to pursue rulemaking for hotel and resort fees, the Department of Transportation (DOT) announced its own plans to regulate ancillary fees in the airline industry, including publishing a proposed new rule on the issue in October.  At the request of several industry trade groups and associations, the DOT announced last week that it was extending the comment period for those interested in the proposed new DOT rule.  With the extension, the comment period now runs until January 23. 
  • Phocus Wire’s Movers, Shakers and Newsmakers in Travel for 2022.  As the year draws to a close, it is always interesting to read major publications’ reviews of the prior year.  The online travel industry is no exception as Phocus Wire last week shared its list 2022 movers, shakers and newsmakers.  From my perspective, I was surprised by both a few of the items included in Phocus Wire’s list as well as a few items omitted from Phocus Wire’s list.  What do you think?  Did Phocus Wire miss anyone or anything in particular?  My own year-end Online Travel Update will be out next week summarizing the stories I felt were most important for this past year.  I look forward to your thoughts and comments. 

Our weekly Online Travel Update for the week ending December 16, 2022, is below.  This week’s Update includes updates and additional details on several stories we’ve featured previously, including Airbnb’s new all-in pricing and ongoing parity investigations of OTAs’ practices in Australia.  Enjoy. 

• • Airbnb’s Adoption of All-In Pricing Is Official.  Beginning this month, Airbnb users in the United States (and other countries where local laws do not already mandate the display of all-inclusive pricing) will now see prices displayed on the platform inclusive of mandatory fees and charges (e.g., cleaning fees).  The all-inclusive prices will not include taxes.  Beginning next year, all-in prices will be the default rates shown on the platform unless a user elects otherwise.  All-in prices will be featured on listings, maps and when filtering search results.  What this change might mean to hosts continued use of cleaning fees (which have been the subject of many traveler complaints) and other mandatory charges, only time will tell.   How might this change affect the pricing practices other short-term rental platforms, that too remains to be seen. 
  • History of Australia’s Treatment of OTAs.  This past week Australian news outlet, ABC, provided a helpful overview of the Australian Competition and Consumer Commission’s (ACCC) history with OTAs and the new pending investigation re-examining OTAs’ rate parity requirements.  If you are not familiar with how Australia has historically viewed these requirements or the new pending investigation, which many believe will result in an outright prohibition of all rate parity requirements, I encourage you to read the story. 
  • EY to Expand Use of Blockchain Booking Portal.  Having successfully completed an initial 6-month test of its new blockchain-powered leisure travel booking portal, EY has plans to expand the portal globally and to offer hotels alongside its current air offerings.  Through the portal, EY has made available to its U.S. based employees direct connections with at least 2 U.S. airlines interested in providing EY employees personalized, discount travel offers.  In the weeks ahead, EY plans to expand the portal globally and to add extended stay hotel options for employees needing accommodations for longer periods for work projects.  EY has already identified two hotel partners (not disclosed) that in addition to the extended stay work related offerings, plan to offer leisure content as well.  While EY has no immediate plans to pursue similar direct connectivity options for its traditional corporate travel, the lessons learned by EY are sure to make an impact. 

For those of you celebrating holidays this week or next, Happy Holidays. 

Our weekly Online Travel Update for the week ending Friday, December 9, 2022, is below.  Payments again feature prominently in this week’s Update as American Express (not to be outdone by Mastercard’s recent announcement) announces its recent investment in a growing hotel payments platform.  Enjoy. 

• • American Express Announces Investment in Selfbook.  This past week, American Express, acting through its venture capital vehicle, Amex Ventures, announced that it was making a strategic investment in hotel payments platform, Selfbook.  Selfbook’s technology allows hotels to offer a one-step online checkout and payment process, which can be used to purchase a variety of products and services (e.g., hotel room, spa treatment and restaurant reservation) with a single payment.  As part of its investment, American Express and Selfbook also plan to work together.  Selfbook happens to be one of PhocusWire’s hot travel startups for 2023. 

• • Demand for Travel Insurance Products Grows.  So why a story on travel insurance?  As many of you know, many of today’s shiny new fintech products (which we frequently cover as part of our Update) are little more than re-titled traditional travel insurance products (new flexible “cancel whenever you want” cancellation policies = trip cancellation insurance).  A recent study by Allianz Partners confirms that consistent with the extraordinary success seen by many of the newer providers of these fintech products, travelers’ interest in travel insurance is higher (much higher in the United States) now than prior to the pandemic.
  • Booking Holdings to Offer Full NDC Content.  Priceline announced this past week that it had reached agreement with British Airways and Iberia to feature and sell the carriers’ full NDC-enabled product offerings – flexible booking options, seat selection and bagging handling.  The newly announced deal extends across the portfolio of Booking Holdings’ companies – Priceline, Agoda and Booking.com. 

If you plan to be in Seattle in January for HEDNA’s upcoming conference, please let me know.  I’d love to see you and show you our Emerald City. 

Our weekly Online Travel Update for the week ending December 2, 2022, is below.  This week’s Update features an important update on distributors’ use of so-called narrow parity provisions in Australia and takes a closer look at two of Phocus Wire’s 2023 Hot Travel Startups.  Enjoy.

• • Australian Treasury Re-Examines Narrow Parity Provisions.  In a statement released last week, the Australian Treasury announced that it was commencing a review of distributors’ continued use of narrow (or direct channel) parity provisions.  The investigation makes good on the Australian Labor Party’s campaign promise to abolish price parity clauses if elected to office.  Readers of our Update will remember that Australia’s Competition & Consumer Commission (ACCC) investigated distributors’ use of parity provisions back in 2016, which ultimately led to Expedia’s (but not others) voluntary abandonment of the entire practice.  As part of its current review, the Treasury has circulated a questionnaire among hoteliers asking hoteliers to comment on the consequences of failing to honor the narrow parity provisions.  Hoteliers have until January 6 to respond. 

• • Another Weekly Update, Another Story on Payments.  Anyone noticing a trend here?  This past week Mastercard announced it was partnering with hospitality solutions provider, Sabre, and Sabre-owned Conferma Pay, to (in their words) build new capabilities for virtual cards.  As part of the newly announced deal, Mastercard is making a minority investment in Conferma.  Sabre’s purchase of Conferma and this newly announced partnership with Mastercard, is part of Sabre’s longer term of goal of building an independent payment ecosystem.  This latest announcement by Mastercard comes on the heels of Amadeus’ recent launch of its own payment business, Outpayce (which we covered in a prior Update), which will also include the launch of a virtual credit card.

• • Hot 25 Travel Startups for 2023 – Fairlyne.  Familiar with the term “re-commerce”?  Although the term has been primarily used in the retail industry, Paris-based Fairlyne hopes to change that.  Fairlyne’s technology allows railways, airlines and hoteliers to re-sell previously booked (but unused) non-refundable tickets and bookings.  As our readers might recall, there are a number of platforms that purport to allow travelers to re-sell their booked reservations (many acting in violation of applicable booking terms and conditions), but this is the first platform we’ve seen that works directly with the suppliers to allow their travelers and guests to re-sell their reservations. 

Our holiday-shortened weekly Online Travel Update for the week ending Friday, November 25 is below. This week’s Update features (again) multiple stories on booking platforms planned roll out of new payment tools. We’ve also included a copy of the Legal Alert we circulated last week regarding the FTC’s planned rule making regarding resort fees. Interested industry members have a limited opportunity to submit comments to the FTC regarding any proposed rule.

Expedia Partners with Payment Application Afterpay. Expedia and buy now pay later payment app, Afterpay, announced this past week that Expedia’s flight and hotel inventory will now be available through Afterpay’s app. Users of the app will now be able to pay for their bookings in four interest-free monthly payments. According to Expedia, Afterpay is the first of many future similar partnerships. It will be interesting to watch how suppliers respond to these new flexible payment options, particularly with regard to discounted rate plans whose conditions include advance payment.

Fareportal Introduces New Cancelation Options. Users of Fareportal’s online travel agencies, CheapOair and One Travel, will now be able to cancel their air bookings for any reason, irrespective of what a carrier’s cancelation policy might provide (purchasers of non-refundable tickets may receive a refund up to 80% of the ticket price). Launched earlier this year (June) on CheapOair, the service is now available on One Travel and will be soon available on CheapOairCanada. Fareportal expects to announce additional “fintech” products and services in the months ahead.

Have a great week everyone. 

Our weekly Online Travel Update for the week ending Friday, November 18, 2022, is below. This week’s Update includes Phocus Wire’s annual listing of its Hot 25 Travel Startups. The list always provides an interesting glimpse at what may be coming in the months and years ahead in online travel. Enjoy.

• • Phocus Wire’s Hot 25 Travel Startups. Phocus Wire’s fifth installment of up and coming travel companies is here. This year’s list features a variety of companies, the majority of which (14 of the 25) were started since the COVID crises began. Over the next few weeks, we plan to take a closer look at a few of the listed companies that caught our attention.
  • TripAdvisor Considering Plans to Revise TripAdvisor Plus. New TripAdvisor CEO, Matt Goldberg, is apparently considering options for overhauling its much-criticized travel subscription program, TripAdvisor Plus. As many will recall, the program received little support from the major lodging brands for fear of undercutting their own direct channel efforts and/or violating existing third-party channel rate parity obligations. According to Goldberg, TripAdvisor may drop the existing $99 annual membership fee. While dropping the membership may help address lagging membership numbers, TripAdvisor will have to address the concerns of suppliers whose participation (and inventory) will be critical to any hoped success.
  • Is Uber the Next Online Travel Distribution Platform? Uber’s travel-related offerings are expanding. When initially launched in March, the program (Uber Explore) allowed users to book activities (and an Uber ride to the activities) sourced through Yelp. With its new partnership with TripAdvisor’s Viator (and other announced partners), Uber will add to the events and activities available on the app and expand the program to over 10,000 cities. Are events and activities a sign of things to come? Will users one day be able to book accommodations (and a ride to their selected accommodation) on the widely used application?
  • Yet Another New Payments Platform is Coming. Add Amadeus to the growing list of distribution platforms planning to provide users new payment (fintech) options. Amadeus reports that it is making a “significant investment” in the launch of a new payment business, Outpayce. As part of its effort, Amadeus has applied to the Bank of Spain for an eMoney license, which would allow Amadeus to provide regulated banking services in the EEA, including issuing payment cards.

Have a great week, and for those of you celebrating this week, Happy Thanksgiving.

This week’s Update delves back into resort fees and includes a story detailing planned future regulation of the fees by the FTC. While resort fees may not technically be an “online issue,” potential federal regulation will definitely affect hoteliers’ online efforts and the efforts of the many online travel distribution platforms they use. Enjoy.

Biden Administration Announces Plan to Tackle “Surprise Fees”
(President Biden Targets Hotel Resort Fees in Larger Crackdown,” October 27, 2022 via Skift (subscription may be required)
In comments last week, President Joe Biden noted that his administration planned to crack down on “surprise fees,” which according to Biden, included specifically hotel resort fees. Earlier this month, the Federal Trade Commission issued an Advance Notice of Proposed Rulemaking (ANPR) to initiate an administrative rule making process to address junk fees. The FTC is now seeking comment on the issue. Copies of the FTC press release and ANPR are attached. We will continue to keep our readers apprised of the FTC’s activities going forward.