Duff on Hospitality Law

This week’s OTA & Travel Distribution Update is below and features a variety of stories – EU regulation, AI-powered chatbots, direct booking, connectivity and taxes.

German Coalition Plans for Increased Scrutiny of Online Platforms [EU REGULATION]
("Online platforms under scrutiny as German coalition eyes antitrust overhaul," MLex, February 7, 2018) (subscription is required)
Although the recent announcement made no mention of the many global or European online travel platforms operating in Germany, it is hard to see how online travel platforms will escape the scrutiny of the planned “Antitrust 4.0”commission. What this new commission means practically is hard to predict as Germany is already one of the few EU member states to find certain distributor’s rate parity provisions outright unlawful.

This week’s rather short OTA & Travel Distribution Update is below. 

Google Leverages Travel Data to Predict Airline Delays [SEARCH]
("Google Already Knows Your Flight Is Delayed,"  Fast Co Design - Headlines, February 1, 2018)
Multiple news outlets featured Google’s announcement this past week that through its combination of AI, Google’s growing body of travel-related data and the data available through other third-party travel aggregators, Google Flights was poised to begin providing travelers flight delay information before the airlines themselves. While we don’t routinely cover stories affecting primarily the airline industry, this widely promoted airline “audit” feature may signal a new willingness by Google to better leverage its unprecedented travel-related databases to provide products and features better than the suppliers themselves.

This week’s OTA & Travel Distribution Update is below and features a number of stories on Airbnb and its many recent announcements. There seems to be no end to the news coming out of Airbnb these days as it prepares for an apparent public offering.

Airbnb Announces First Outside Board Member [SHORT-TERM RENTALS]
("Airbnb brings on American Express CEO to board of directors," TechCrunch News, January 25, 2018)
Airbnb announced this past week the appointment of outgoing American Express CEO, Kenneth Chenault, to Airbnb’s board of directors. Chenault’s appointment is his second in as many weeks (the first was with another small ecommerce company called Facebook). Chenault’s appointment is viewed by many as yet another step by Airbnb toward its highly anticipated public offering. In his statement announcing Chenault’s appointment, Airbnb co-founder and CEO, Brian Chesky, also announced that Airbnb would be introducing in late February substantial improvements to its platform that would set Airbnb up for an “infinite horizon.”

This week’s OTA & Travel Distribution Update for the week ending January 19 is below. This week’s Update includes a heavy dose of short-term rental stories as well as details on Italian regulators’ recent efforts against European travel sites.

California City Can Ban Short-Term Rentals [SHORT-TERM RENTALS]
("Calif. Appeals Court Says City Can Ban Short-Term Rentals," Law360 - Real Estate, January 18, 2018) (subscription required)
A California appeals court denied last week an appeal by homeowners in Hermosa Beach challenging a city ban on short-term rentals (less than 30 days). According to the homeowners, the city ban violated, among other things, the California Coastal Act, which regulates “coastal programs.” The court disagreed, stating that the Act (and the Commission charged with enforcing the Act) is primarily concerned with issuing coastal development permits, not city-enacted zoning rules. At the lower court level, the homeowners had asserted (and lost) claims that the ordinance violated their First Amendment rights (commercial speech) and real property rights.

This week’s OTA & Travel Distribution Update for the week ending Friday, January 12, is below. This week’s Update features stories predominantly on OTAs.

Politics Larger Than Size [OTA]
("China Shuts Down Marriott’s Website and Mobile App Over Tibet Gaffe," Skift Travel News, January 11, 2018)
For those of you who may believe that Marriott’s size and status following the recent Starwood merger allow it to do just about anything, China wishes to set the record straight. Last week Marriott announced that it was taking down temporarily (approximately 1 week) its Chinese website and mobile application in response to Chinese officials’ request. The request apparently constitutes punishment for Marriott’s mistaken identification of contested Chinese territories Hong Kong, Macau, Taiwan and Tibet being listed as separate countries in a Marriott loyalty program member survey. According to the Marriott announcement, those responsible for the gaffe at Marriott will also be subject to “necessary disciplinary action,” including possible termination. For hoteliers seeking to expand their China presence, this serves as an important reminder of the geopolitical risks of doing business there.

The first installment of our weekly OTA & Travel Distribution Update for 2018 is below. A mix of stories in this week’s Update.

Airbnb Avoids Liability for Lease Violations [SHORT-TERM RENTALS]
("Airbnb Ducks Apartment Managers’ Beef Over Rentals," Courthouse News, January 3, 2018)
A California federal district court dismissed last week a class action brought against Airbnb by a collection of Southern California apartment management companies. According to the companies, Airbnb encouraged tenants in their buildings to violate the short-term rental prohibitions in the tenants’ lease agreements (which identified by name, Airbnb) and created an unsafe environment for their full-time residential tenants. Relying on Section 230 of the federal Communications Decency Act (CDA) (the sometimes controversial federal statute that protects internet service providers and other online platforms from liability for unlawful content or activities posted or conducted via their services), the court dismissed the claims stating that Airbnb was not responsible for the actual listing information posted by tenants on the Airbnb website – even if it was in breach of the tenants’ underlying lease obligations. According to the court, the services provided by Airbnb and the content required by Airbnb to be posted to provide those services did not make Airbnb an information content provider and therefore exclude Airbnb from the protections of the CDA.

Happy New Year from Seattle . . .  I hope all of you enjoyed the holidays. Our final, year-end OTA & Travel Distribution Update for the week ending December 29, 2017 is below.

Scrutiny Grows Over OTA’s and Hotelier’s (and now Google’s) Keyword Practices [OTA]
("Google is making it harder for travelers to find the best prices, the Wall Street Journal charges," Business Insider, December 28, 2017)
Two weeks ago we included a story from Skift detailing the misguided (in our humble opinion) allegations by Washington D.C.-based investigative news service, The Capital Forum, regarding the allegedly collusive keyword practices of large hoteliers and OTAs. According to the allegations, contractual provisions found in most large distribution agreements limiting the parties’ ability to purchase keywords containing each other’s valuable trademarks harm consumers by limiting competing distribution channels’ and hoteliers’ ability to market themselves. Now comes a story from the Wall Street Journal adding Google to the collusive mix.

This week’s OTA & Travel Distribution Update for the week ending December 22, 2017 is below. An interesting mix of stories in this penultimate Update for 2017. I hope everyone has a great holiday and successful 2018.

FTC Settles Claims Against Fraudulent Travel Websites [OTA]
("Hotel Room Resellers Settle FTC Charges That They Misled Consumers," Federal Trade Commission Consumer Protection Press Releases, December 22, 2017)
By now, everyone should be familiar with the ongoing efforts of the American Hotel & Lodging Association (AH&LA) to call out and put an end to the misleading practices of certain travel websites that hold themselves out as being affiliated with a particular hotel or hotel chain. These efforts appear to be having some success. This past week, the Federal Trade Commission (FTC) announced a settlement with Reservation Counter, LLC (and its parent companies) over the travel websites’ distribution practices. According to the FTC’s complaint, the websites’ display ads, websites and call centers gave travelers the impression that they were dealing directly with the listed hotel. Additional allegations focused on the websites’ failure to provide travelers inadequate notice regarding loyalty program participation, applicable cancellation policies and payment terms. The settlement reached by the FTC prohibits the websites from, among other things, using any hotel name or logo in any search engine display ad, URL, website or other advertising in a misleading way. The settlement order also requires the websites to disclose to callers that they have reached an independent, third-party travel agency, not the advertised hotel.

This week’s Update for the week ending December 15, 2017 is below. Nothing too earth shattering this week.

Google Now Featuring Travel Packages [METASEARCH]
("Google now offers discounted tours and activities for bundling vacation packages," The Verge, December 14, 2017)
With each passing week, Google seems to introduce yet another new feature for those using the search engine (a/k/a metasearch site) to search travel related products and services. Google’s latest features allow travelers to (1) evaluate whether flights or hotels should be booked now or later, (2) track changes to hotel room rates via email and (3) search, book and package with other travel components (via a third party provider) tours and activities. Anyone still doubting whether Google has big plans for travel?

This week’s OTA & Travel Distribution Update for the week ending December 8, 2017 is below. OTA powerhouses, Expedia and Booking.com, feature prominently in this week’s Update.

Expedia Seeks to Leverage Legacy PMS Platforms [OTA]
("Expedia sets sights on legacy tech with ambitious ‘travel platform’ for hotels," Tnooz News Feed, December 7, 2017)
At this year’s annual Expedia Travel Partner Conference, Expedia made clearer than ever its ambition to become a technology solutions provider to the lodging industry, not just a booking engine. In a series of presentations at the Conference, Expedia executives discussed the three pillars of the “Expedia Travel Platform” – operations (Expedia’s modern version of a PMS via ALICE), revenue (Expedia’s existing revenue management platform, Rev+) and data (data gleaned from the millions of transactions processed on its suppliers’ behalf). Interestingly, Expedia’s access to data and its well-known data practices may prove to be the biggest differentiator between Expedia’s products and the products and solutions of its more traditional competitors, many of which never imposed such practices with their customers. It will be interesting to see how many hoteliers will be willing to turn their hearts and souls over to a company that for years has been characterized by the industry as the devil.