Duff on Hospitality Law

This week’s Update features a number of stories on the growing short-term rental industry, including Sonder’s recently announced plan to go public. Enjoy.

Ryanair Takes on Online Travel Agents (OTA)
("Ryanair launches new price checker and verified seal to further protect customers from OTAs," April 28, 2021 via Travel Daily News)
Last month, Ryanair announced the launch of two initiatives: the Price Checker and Verified Seal. Both initiatives, which are available only on the Ryanair website and app, are designed to stop OTAs (none of which have commercial relationships with Ryanair) from overcharging users, providing incorrect passenger details and preventing the airline from dealing directly with passengers. The Price Checker allows passengers who have booked tickets through an OTA to check the amount actually paid by the OTA to Ryanair, versus any margin, markup or other fee added by the OTA. The Verified Seal guarantees passengers that they are booking directly with Ryanair, and not through an unauthorized distributor or reseller. Those booking directly through Ryanair are assured to receive the lowest fares, the lowest fees and charges for ancillary items and refunds paid directly by Ryanair to the passenger (and not an intermediary). 

This week’s Update provides several updates on stories we featured previously, including details on Expedia’s recent settlement of false advertising claims that we first detailed back in 2016. Enjoy.

The Return of (Offline) Travel Agents
(“Make Way for the Travel Agents. Again.,”April 14, 2021 via New York Times - Global Business) (subscription may be required)
“Book me now. Book me anything.”  Last week, The New York Times featured a story predicting the strong return of travel agents. According to Wendy Burke, Founder and CEO of Cadence, a Southern California travel agency, travelers are calling her agency asking her agents to book them travel to just about anywhere as the prospective travelers wait the mandatory 15 minutes following their COVID-19 vaccine. Other agencies report that business is up 35 percent over pre-pandemic (2019) levels. Does this mean a return to “normal” for traditional (offline) brick and mortar travel intermediaries? While travelers may communicate with their agents a bit differently now (texting, online interfaces, etc.), travelers trying to navigate the myriad of COVID travel restrictions are relying on their trusted travel advisors now more than ever. 

While the debate around health care passports continues, our latest Update offers Booking Holdings’ CEO’s perspective on the growing controversy. We also take a look at two major distributors’ plans for public offerings – one via a SPAC (Traveloka) and the other through a new secondary listing (Trip.com). What each distributor does with the proceeds from the offerings will be interesting to watch. Enjoy.

Expedia Joins Other Platforms in Offering COVID-19 Advisory
(“Expedia Group Launches COVID-19 Advisor Tool to Track Global Travel Restrictions, April 8, 2021 via Hotel News Resource)
Recently, Expedia announced plans to launch the COVID-19 Travel Advisor, offering information that other platforms have made available to travelers for some time. The Travel Advisor will offer users of several of Expedia Holdings’ consumer sites real-time information on COVID-related travel restrictions in various destinations. According to Expedia, an initial pilot of the Travel Advisor resulted in 1.6 million travelers using the tool on Expedia Holdings’ sites since November 2020. Whether this new advisory will be enough to draw prospective travelers to Expedia Groups’ sites earlier in their search (before identifying or booking a flight or accommodation) – which is clearly the intent behind the new Travel Advisor – remains to be seen.

It was another relatively quiet week in the online travel world as evidenced by our stories below. Expedia Group’s introduction of its Fast Track program designed to recruit unhappy Airbnb hosts and its rollout of AI-enabled virtual travel agents received most of the attention. Enjoy.

Short-Term Rentals Hosts Becoming a Hot Commodity
(“Expedia’s Vrbo Looks to Poach Discouraged Airbnb Hosts With New Incentives, March 29, 2021 via Skift Travel News) (subscription may be required)
We have all read the many stories chronicling the successes of short-term rentals during the pandemic. Our team has done more work in the space over the last six months than the past two years combined. Now, as the travel industry prepares for the anticipated return of leisure travel (and continued strong demand for traditional lodging alternatives), distributors are getting creative in their efforts to add to their rental inventory – even going so far as to create a dedicated programs seeking to expedite the transition of disgruntled hosts wishing to leave their current distribution platform. Meet Fast Track. Recently, Expedia Group introduced its new host recruitment program (Fast Track), which Expedia acknowledges was created specifically to respond to the influx of disgruntled hosts seeking to leave Airbnb over its refund practices. Participants in the program will enjoy preferred placement on Vrbo and a “New to Vrbo” badge on its listing for up to 90 days. The new program is currently only available to hosts in the United States, but is expected to be rolled out globally over the next few months. 

Last week was a relatively quiet one for the online travel industry. Hopper garnered most of the headlines with its recent funding round (and accompanying $1 billion valuation). Enjoy.

JetBlue Seeks To Diversify Its Online Offerings
(“JetBlue’s Travel Tech Ambitions Take Step Forward With New Broader Booking Site,” March 25, 2021 via Skift Travel News) (subscription may be required)
Meet Paisly, the new travel website recently developed by JetBlue, which allows holders of JetBlue airline reservations to search and book rental cars, accommodations and theme park tickets. The new website is in addition to JetBlue’s existing JetBlue Vacations, which offers comparable products and services, but exclusively on a package basis. The new website is further evidence of the airline’s announced ambitions of becoming a travel technology company. By the end of the year, JetBlue hopes to offer more accommodation and activity options on the new site.

This week’s Update provides additional information (and perspectives) on Tripadvisor’s new subscription program (Tripadvisor Plus), parity updates from South Korea and the latest on Fareportal’s antitrust claims against JetBlue. Enjoy

Tripadvisor Plus Continues to Garner Attention
(“Tripadvisor’s new subscription service represents potential boon for lodging industry,” says GlobalData, March 19, 2021 via Travel Daily News)
(7 Takeaways From Tripadvisor’s Confidential Pitch Deck to Hotels, March 17, 2021 via Skift Travel News) (subscription may be required)
Readers of my weekly Update know that I’ve expressed a few concerns about Tripadvisor’s new subscription program, Tripadvisor Plus – supplemental property-level terms and conditions that harken back to the days when distributors demanded broad discretion in using a property’s intellectual property (terms and conditions that may also require a property to violate any applicable brand requirements), sourcing rooms and discounted rates from wholesalers and bed banks, etc. As seen in the two stories featured above, industry analysts continue to examine the new program and its effects on Tripadvisor and the properties that elect to participate.

• • Transition to a Direct-to-Consumer (B2C) Booking Platform. For some, the program represents Tripadvisor’s dramatic shift from a historically B2B player to a B2C player (in direct competition to other B2C platforms – Expedia, Booking.com, etc.). Gone are the days of Tripadvisor serving only as a review site.
  • Cost Savings? As seen from our first story above, the fact that the program is “free” (i.e., no commissions or other charges are paid directly to Tripadvisor for being featured) continues to garner much of the attention (though participation requires discounts of at least 10 percent (recommended 15 percent) and other guest perks – wine, upgrades and other additional benefits, all of which presumably cost something).
  • Tripadvisor’s Organic Search Results May Not Be as Organic. According to Tripadvisor, the more value a participating property offers (via discounts and other perks), “the higher you [properties] get placed in our organic search results and marketing channels.” For those properties that don’t participate in the new program? Well, you know what happens…Time to check those Tripadvisor terms and conditions regarding needed sort order disclosures.

This week’s Update features several stories on the big online travel newsmakers of last week – Google and Kayak. Enjoy.

Google Once Again Embraces Organic Search and Eliminates Hotel Listing Fees
(“Tripadvisor’s New Subscription Service Edges the Company Toward Online Travel Agency Status,” March 7, 2021 via Skift Travel News) (subscription may be required)
(“Google eliminates fees for hotel booking links”, March 8, 2021 via Phocus Wire)
(“Google Drops Costs for Hotels and Resellers to List Rates in Price-Comparison Search”, March 8, 2021 via Skift Travel News) (subscription may be required)
(“VIDEO: What Google's overhaul of hotel booking ads really means”, March 9, 2021 via Phocus Wire)
Was it a response to Tripadvisor’s recently announced roll out of its “free” subscription program, Tripadvisor Plus? Perhaps it was a response to the many antitrust claims filed against Google late last year by the U.S. Department of Justice and state attorneys general. Or is it simply Google’s next step toward total world domination (or at least domination of hotel metasearch)? Regardless of the reasons behind its change, Google’s recent announcement came as a surprise to many. While the industry continues to analyze the significance of the change (see our multiple stories linked above), here’s what we know: Google is adding two new organic slots/links (underneath four paid slots) to users’ search results when they search for accommodations in a particular location. The two new slots will be available to participating hotels, online travel agents or other booking sites without charge. According to Google, the ranking of these free slots will be based on an algorithm that considers price, click-through rates and the landing page experience, but not on any existing commercial relationship with or payment to Google. The links themselves will continue to be provided via feeds from partners, including hotels, online travel agents and integration partners. Who said search engine optimization (SEO) was dead?

This week’s Update features stories on Google’s recently announced online third-party tracking changes, the (permanent) nature of virtual experiences, growth of “digital” kitchens and important updates on what group events may look like post pandemic. For those of you who missed our mid-week update on Tripadvisor’s troubling plans for obtaining discount rates for its Tripadvisor Plus subscription service, we’ve also included that story again. Enjoy.

Are Virtual Experiences Here to Stay?
(“Why virtual tours and activities will stick around after the pandemic,” March 4, 2021 via Phocus Wire)
One small Seattle-based company seems to think so. Even months before the pandemic began, Amazon was working on its virtual experiences offering. With the launch of Amazon Explore in September, Amazon joined Airbnb, Viator and Klook in offering “risk-free” virtual experiences and activities. Now with the pandemic’s end in sight, members of the travel industry are asking whether these travel alternatives will remain relevant. Amazon and other experience platforms believe that these offerings will continue to be used as both an alternative to travel and as a compliment to travel (think Rick Steves). Actual suppliers of the virtual experiences report mixed results, though most recognize they may play an important sales and marketing function in the future. What will be most interesting to watch in our post-pandemic world is whether lessons learned (and the supplier connections made) by Amazon while offering virtual experiences will lead the behemoth e-commerce platform to transition to actual experiences and activities.

This week’s Update takes a close look at Booking Holdings’ recent fourth quarter and year-end earnings release. Enjoy.

Booking Holdings’ Financial Results
(“Booking Holdings focuses on payment platform, connected trip and U.S. growth as 2020 revenue drops 55%,” February 24, 2021 via Phocus Wire)
(“Booking Holdings, Inc.'s (BKNG) CEO Glenn Fogel onQ4 2020 Results - Earnings Call Transcript,” February 24, 2021 via Seeking Alpha)
(“Booking Holdings Reports Financial Results for 4th Quarter and Full-Year 2020,” February 24, 2021 via Booking Holdings)

Booking Holdings (including brands such as Booking.com, Priceline, Agoda, Kayak, RentalCars.com and Open Table) released its fourth quarter and full-year 2020 financial results last week.

Highlights from the release include the following:

• • Gross bookings dropped 63 percent in 2020 to $35.4 billion
  • Total revenues dropped 55 percent in 2020 to $6.8 billion
  • Room nights booked dropped 58 percent in 2020
  • Adjusted EBITDA dropped 85 percent in 2020, though even with this drastic drop, Booking Holdings remained profitable on an adjusted EBITDA basis in 2020 ($880 million)
  • Marketing expenses in 2020 dropped sharply to $2.2 billion (down from $5 billion in 2019)
  • Company staff were cut by approximately 23 percent, resulting in approximately $330 million in personal expense savings (no additional cuts are currently anticipated)

This week’s Update features a number of stories highlighting last week’s Skift Online Travel and Distribution Summit, as well as Marriott CEO Arne Sorenson’s incredible impact on Marriott and its view on online travel. Enjoy.

A Tribute to Marriott’s Arne Sorenson
(“Marriott’s Arne Sorenson Upended Travel Distribution,” February 17, 2021 via Skift) (subscription may be required)
Last week brought the horribly sad news of Marriott CEO Arne Sorenson’s untimely passing. As many in the industry offered their heartfelt condolences and shared personal stories involving Mr. Sorenson, Skift Executive Editor, Dennis Schaal, offered his own unique look at Mr. Sorenson’s many contributions to Marriott’s distribution efforts. For Dennis, highlights of Mr. Sorenson’s nine-year tenure as Marriott CEO include:

• • A first of its kind for U.S. companies to debut a store-within-a store model on Fliggy’s travel distribution platform
  • White label package and later wholesale distribution agreements with Expedia Group
  • Together with other major lodging companies, the launch of a second industry-owned and operated distribution platform, Roomkey
  • And most recently, the exploration and ultimately successful launch of Marriott’s homegrown short-term vacation rental platform, Homes & Villas. Contrary to the firmly held beliefs of many of his industry peers that online travel agents (OTAs) represent everything wrong about distribution, Mr. Sorenson believed that by leveraging Marriott’s ever increasing number of properties to partner with these OTA adversaries, Marriott could better avail itself of the many tools and other benefits that the OTAs could provide.