Duff on Hospitality Law

We end 2020 with a heavy dose of antitrust/competition stories (which is a theme likely to continue into 2021), including updates from Russia, Croatia and the European Union. Those of you with properties in those markets may soon find new opportunities and methods to compete.

Agoda Adds Installment Payments
(Agoda launches regional instalment payment option with Atome, December 20, 2020 via Markets Businessinsider.com)
Not to be outdone by its competitors (see our prior story here), last week, Agoda announced that it is partnering with “fintech” provider Atome to offer installment payment options for travelers booking accommodations in select Asia-Pacific countries on the online platform. The new payment options will first be made available for bookings of accommodations in Singapore and Malaysia, but are expected to expand to accommodations in eight additional APAC markets in 2021. It will be interesting to see what effect these no or low interest installment payment options will have on the return of leisure travel in 2021.

This week’s Update features a variety of stories – short-term rental, airlines, resort fees and antitrust developments in both the United States and the EU. Enjoy.

Say Hello to the First VR Booking Platform
(VResorts Launches Virtual Reality Booking Platform, December 15, 2020 via Hotel Business)
Gimmick? Maybe. I’ve been quite skeptical of the many purported uses for virtual reality in the travel industry. Singapore-based, VResorts wants us all to think differently. VResorts announced last week the launch of its virtual reality-enabled booking platform that allows users to browse and book hotels using only their VR devices. Hotels participating on the platform will be given the choice of providing VR videos and 360 degree photography or traditional static photography. No information was given on the source of the platform’s inventory or the costs associated with participating, though VResorts CEO and founder, Vladimir Varnavskii, claims that the platform will offer the same competitive pricing found on traditional online booking platforms, Expedia and Booking.com. 

Last week’s news headlines were dominated with a major milestone in the short-term rental industry as Airbnb’s long-awaited IPO finally arrived. While many will continue to debate Airbnb’s initial valuation, one thing is clear: Having just raised $3.5 billion in the public markets, Airbnb has formally arrived. It presents formidable competition to the two current online travel behemoths, Expedia Group and Booking Holdings.

Airbnb’s IPO Was Really, Really Big
(Airbnb valued at $100 billion following blockbuster IPO — equivalent of more than five Expedias, December 10, 2020 via GeekWire)
Airbnb priced its IPO at $68 per share. Shares closed on the opening day at $144.71. The closing share price translated to a $100.7 billion market valuation – five times Expedia’s market valuation (closed at $18.4 billion) and greater than the combined value market values of Marriott, Hilton and Hyatt. Founded in 2008, Airbnb now features four million hosts offering accommodations around the world. For the first nine months of 2020, Airbnb posted revenues of $2.5 billion (compared to Expedia’s $4.2 billion) and losses of $696 million (compared to Expedia’s $2.2 billion loss). Let the debate begin.

This week’s Update features a heavy dose of short-term rentals as the long-awaited Airbnb IPO finally arrives and many hoteliers seek to capitalize on growing (COVID-induced) traveler demand in this segment. Enjoy.

Accor and Marriott’s Interest in Short-Term Rentals Grows
(“Did Accor Just Tiptoe Into Short-Term Rentals?” December 3, 2020 via Skift Travel News; “Short-Term Rentals at Marriott Grow Beyond Just Being an Experiment,” December 3, 2020 via Skift Travel News; “Accor Launches Website Dedicated to Private Rentals and Extended-Stay Hotels,” December 3, 2020 via Lodging Magazine) (subscription may be required)
In separate stories recently, industry reporter, Skift, featured efforts by both Marriott and Accor to advance their short-term rentals offerings. While the number of short-term/vacation rentals available through Marriott’s Homes & Villas remains relatively low (particularly when compared to Marriott’s one million-plus traditional guest room offerings), the inventory continues to grow rapidly. Since October, Marriott has added 4,000 new listings. As of late, the Marriott platform was offering nearly 16,000 listings in 250 global destinations. Recently, Accor made industry headlines with the launch of its Apartments & Villas website, which features Accor’s existing extended stay hotel offerings (15-hotel portfolio), branded residences (Raffles and Fairmont residences) and private rental offerings (primarily through its existing One Fine Stay platform). Unlike Marriott’s offering, which features newly added rental inventory (unaffiliated with any existing Marriott property), Accor’s offering represents a new way of marketing its existing short-term rental portfolio (roughly 50,000 properties in 350 global destinations). Whether the launch of this new platform by Accor signals a renewed focus on adding new – never before affiliated – private rentals (like Marriott’s approach) remains to be seen. The long-term success of either of these offerings will in large part be determined by travelers’ continuing interest in the segment long after COVID subsides.

This week’s Update features our next PhocusWire Hot 2021 Startup, Volara. For those of you who have implemented (or considered implementing) voice-activated guest solutions, Volara is likely a familiar name. Enjoy.

Increased Interest in Contactless Engagement May Fuel Volara Growth in 2021 
(“VIDEO: Volara - Summit pitch at Phocuswright Conference 2020,” November 25, 2020 via phocuswire.com)
U.S.-based startup, Volara, is no stranger to the hospitality industry. Founded in 2016, Volara was one of the first developers of hospitality industry applications for voice-activated devices like Amazon’s Echo and Google’s Nest. For Volara, 2021 will be the year to leverage the industry’s growing (pandemic-induced) demand for contactless engagement and touchless controls solutions. We’ve linked the headline above to the recent 2020 Phocuswright Conference Innovation Summit pitch presented by Volara President, David Berger.

Beginning with this edition, we’ve rebranded the name of our weekly Update from “OTA & Travel Distribution Update” to “Online Travel Update.” Why, you ask, did we change the name that has served us so well these past five years (yes, it has been more than five years since we launched our weekly Update)? Well, the new name reflects both the fact that our client mix continues to grow, with several high-end bespoke tour operators and cruise industry members added to our online travel portfolio, and that the work we do for these diverse clients has evolved well beyond traditional B2C online travel agent (OTA) contracts. Wholesale (B2B) distribution, search, metasearch, payment methods, privacy, tax, connectivity, e-commerce and website, and application development and operation have all become an important part of our travel practice. While we will continue to focus on stories involving the OTAs, you should also expect to see updates on these other critical substantive areas. We hope you enjoy, and always welcome your thoughts and feedback.

PhocusWire 2021 Hot Startups: Meet Kyte 
(“Hot 25 Startups 2021: Kyte,” November 9, 2020 via Phocus Wire)
Our second story featuring the PhocusWire 2021 Hot Startups highlights airline (B2B) distribution solution, Kyte. U.K.-based Kyte is one of several recent startups seeking to leverage the new distribution capability (NDC) to provide airlines the ability to offer flights and other ancillary products and services to consumers or third-party distributors. Current users of Kyte’s solution include British Airways, Singapore Airlines, Air Canada, Cathay Pacific and American Airlines. 

This week’s Update features a variety of stories, including the first of many upcoming profiles of PhocusWire's 2021 Hot Travel Startups focused on distribution and online travel. Enjoy.

JetBlue to Distribute Short-Term Rentals
(“JetBlue to Debut Short-Term Rentals as Part of Its Growing Non-Air Offerings,” November 11, 2020 via Skift Travel News) (subscription may be required)
Short-term rentals – the apparent darling of leisure travel during the COVID-19 pandemic – continue their march to legitimacy. Last week, JetBlue announced plans to add short-term rentals to its existing non-air portfolio of products and services. The new inventory will be provided by a to-be-named partner, but customer service will be handled directly by JetBlue (and not the supplier partner.) Potential supplier partners identified by JetBlue include Airbnb and Expedia’s Vrbo.

It’s earning season, and this week’s Update features a number of stories detailing the quarterly earnings releases from several of the largest online travel agencies (OTA) and global distributions system (GDS) companies. We’ve also included copies of the quarterly releases for both Expedia and Booking.com. Enjoy.

Tripadvisor Explores a Consumer Subscription Program
(“Tripadvisor to Launch Its First Subscription Plan for Travelers,” November 6, 2020 via Skift Travel News) (subscription may be required)
Last week, Tripadvisor CEO Steve Kaufer announced during the company’s third-quarter earnings call that the review/metasearch/booking site is planning to introduce a paid consumer subscription program that would provide subscribers discounts on hotels and attractions, and other possible benefits (e.g., unique experiences). Although details of the program are still being finalized, Kaufer claimed that the program would be complimentary to suppliers’ existing loyalty plans. This new consumer-oriented program would supplement Tripadvisor’s existing subscription plans for hotels and restaurants, including the recently introduced reputation management program.

Last week was relatively quiet on the distribution front. Enjoy. 

Tensions Between Google and Booking.com Become Public
(“Booking.com and Google Clash in Europe as Regulators Target Both,” October 29, 2020 via Skift Travel News) (subscription may be required)
It is somewhat of an understatement to say that Google’s growing interest in travel has garnered the attention of a few of its largest advertisers. Over the past year, representatives of the largest OTAs, namely Expedia and Booking, have been increasingly vocal with their “concerns” about Google and its practices. Rcently, Booking made its views about Google even clearer, when it declined to lend support to Google’s campaign to oppose EU regulatory action directed at online “platforms.” In the words of Booking, “Our interests are diametrically opposed.” While Booking’s recent comments may have been motivated primarily by its effort to avoid being viewed by EU regulators as an online “gatekeeper,” it is quite clear that Booking would like nothing more than to sit on the sidelines while its former “partner” faces the scrutiny of regulators alone.

What started out as a relatively quiet week in the distribution world ended with a flurry of activity and announcements (some were expected and some were not). I hope you enjoy.

Booking.com Expands Its Product Offerings for U.S. Travelers
(“Booking.com launches flight search and booking in the U.S.,” October 22, 2020 via Phocus Wire)
As of October 15, U.S. travelers can now search and book airline tickets on Booking.com. This latest news comes on the heels of several recent announcements by Booking.com and its parent company, Booking Holdings, including last week’s public announcement about Booking.com abandoning its core BookingSuite products. Many users in the United Kingdom and other countries in the EU have had access to the airline offerings for close to a year, though much of the transaction to purchase tickets was handled by a third party. In contrast, U.S. users will complete the transaction entirely on the Booking.com site. Facilitated payments, corporate and managed travel and now airline tickets…What’s next for Booking.com?