MCR Hotels Trial Runs Attribute Pricing
(“One of the US's largest hotel owners is charging guests $25 to use the swimming pool and $20 to check in early — but is cutting room prices in return,” August 18, 2021 via Business Insider)
In an interview with the Wall Street Journal, hotel owner and operator, MCR Hotels CEO, Tyler Morse, shared the company’s plans to begin offering attribute pricing for 12 of its independent hotels. According to Morse, the company plans to reduce its hotels’ base room rates, while at the same time charging additional fees for guests’ use of certain of the hotels’ amenities (e.g., pool or fitness center) or other services (e.g., early arrival). Whether MCR’s plans signal the beginning of the lodging industry’s long discussed transition to attribute pricing remains to be seen. With many hotels suspending traditional guest services (e.g. daily housekeeping) during the pandemic (and owners reaping the associated economic benefits), the post-pandemic return of the lodging industry may provide a unique opportunity to rethink guest room pricing. How these new practices might fit with legacy distribution systems, OTA fee structures, sales contracting practices, etc., remains to be seen.
Where did summer go? It was another quiet week in the online travel world, though I expect things may pick up in the weeks ahead as everyone returns from their summer breaks. Enjoy.
Travelport and Amazon Web Services Announce Travel Startup Accelerator
(“Travelport Teams With Amazon Web Services to Support Travel Startups,” September 2, 2021 via Skift Travel News) (subscription may be required)
Recently, Travelport and Amazon Web Services (AWS) announced the launch of a travel startup accelerator designed to provide travel entrepreneurs access to data and channel expertise, potential supplier partners (including hotels) and prospective travelers. The inaugural session will feature 10 travel startups with a focus on digital marketing and personalization. Judges will include representatives from American Express GBT, Internova and Priceline.
Russian Authorities Impose Anti-Trust Penalty on Booking.com
(“Booking.com Faces $17.5 Million Competition Fine in Russia,” August 26, 2021 via Skift) (subscription may be required)
Russia’s federal antimonopoly service (FAS) announced that it was imposing a $17.5 million dollar fine on Booking.com for its alleged abuse of its market dominant position. The fine comes nine months after FAS accused the online travel agent of violating Russia’s competition laws. Booking.com plans to appeal the fine.
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.
About the Editor
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.