Duff on Hospitality Law

This week’s Update features a variety of topics – OTAs, short-term rentals and loyalty.  Enjoy. 

The Rising Importance of Metasearch
("How metasearch became the most important marketing channel in travel," Phocus Wire on Jul 10, 2019)
Online marketing spend data reported this past week by European-based Mirai demonstrates the growing influence of metasearch.  Highlights from the report include the following.

• Prior to 2017, keyword-based display advertising on Google, Bing and other search engines captured the majority of online marketing investments. 
• That phenomenon changed in 2017, when investments in metasearch for the first time exceeded traditional display advertising.  Since that time, the amount of investment in metasearch has continued to grow. 
• Among the many available travel-oriented metasearch platforms, Google (Google Hotel Ads) is the clear favorite (75% of metasearch investment).  Google’s success can be attributed to its ever evolving (and improving product), the subtle integration of search and Google Hotel Ads and the ever-expanding influence of Book on Google.

This week’s travel-shortened OTA & Travel Distribution Update features two stories detailing two recently announced unique partnerships, one between Accor and Air-France / KLM and the other between Expedia and Lufthansa.  We also update the status on Booking.com’s continually evolving plans to charge commissions on resort fees and other similar service charges. Enjoy.

This week’s Update highlights two additional countries’ efforts to investigate alleged abuses by powerful global online platforms, including widely used online travel platforms.  Enjoy. 

Indian and South Korean Regulators Examine Practices of Online Platforms
("Competition issues in e-commerce the focus of study by Indian antitrust regulator," MLex Insight on Jun 28, 2019) 
Regulators in India and South Korean separately announced plans last week to study the practices of global ecommerce platforms (including those serving the travel industry) and their effect on local competition.  Both studies include examinations of the relevant markets and the business models and practices, including contracting practices, of the largest players.  Initial results of these studies are expected as early as the end of August. 

Hopper Focuses on Hotel Bookings
("Hopper ramps up hotel booking with global private rates and price tracking," Phocus Wire on Jun 20, 2019 
Over the past few years, we have featured a number of stories about Hopper and its many successes – though primarily in airline bookings.  Now, Hopper is seeking to leverage some of that success in its pursuit of hotel bookings.  Hopper currently features over 270,000 hotels worldwide and sources rooms from those hotels through both intermediaries and direct supplier relationships.  Armed with its price predictive technology, Hopper claims to be able to provide users accurate rate forecasts for the hotels it features as well as unique “private” rates that are otherwise unavailable.  Unlike typical booking channels, which generally promote and market their offerings broadly, Hopper derives 90% of its bookings through personalized “private” push notifications that are powered by Hopper’s personalization AI.

The latest OTA & Travel Distribution Update features a number of stories highlighting ongoing or recently resolved regulatory complaints or investigations.  Enjoy.

Nustay Seeks EU Regulatory Review
("Expedia, Booking.com targeted in EU antitrust complaint by Nustay," MLex Insight, June 11, 2019) 
Dutch booking platform, Nustay, filed a complaint last week with the European Commission alleging that the practices of Expedia and Booking.com illegally restrict competition in the market.  The alleged practices at issue include imposing severe consequences (e.g., reducing a hotel’s ranking or transferring the hotel to Booking.basic (Booking.com only)) on hoteliers that seek to offer more competitive prices through alternative (including Nustay) channels, which Nustay alleges, constitutes enforcement of a “new type” of wide parity requirement.

This week’s Update features an important story on possible changes to keyword contracting practices (or at least a new argument as to why existing practices are no longer appropriate).  Enjoy.

Dutch Authorities Scrutinize Keyword Restrictions
("Booking.com and peers may face Dutch scrutiny of ad deals with hotel chains," MLex Insight, June 7, 2019)
In a study issued last week, the Dutch Authority for Consumers and Markets examined hotel booking platforms’ (Agoda, Booking.com, Expedia and others) practice of agreeing contractually with hoteliers not to post advertisements in response to searches featuring the hoteliers’ keywords (i.e. keyword restrictions).  According to the Authority, such restrictions are likely to lead to higher prices on websites, which ultimately harms consumers.  Although the study did not identify plans for a formal investigation or recommend sanctions, those of you seeking keyword restrictions (or seeking amendments to existing restrictions) should expect to hear a lot about this.

Airbnb Begins Integration of Traditional Lodging Products
("Airbnb Tests Hotel Integration by Adding Some HotelTonight Partners," Skift Travel News, May 29, 2019) 
As a critical first step in its integration of the newly acquired HotelTonight, Airbnb has begun adding limited hotel inventory from some of HotelTonight’s hotel partners.  At the same time, Airbnb has eliminated guest fees on new hotel listings (making the site more competitive with the host-only fee models of Booking.com and Expedia) and begun cross promoting its hotel inventory on both the Airbnb and HotelTonight platforms.  Although full integration of the HotelTonight inventory on the Airbnb platform will take time (and require the platforms to reconcile their many differences), many believe it is only a matter of time before the former exclusively alternative accommodation platform transforms itself into fully fledged online distribution channel.  Only time will tell...

Washington employers are likely aware of Washington Paid Family & Medical Leave Act ("PFMLA") and the recently passed amendments, but they may have some lingering questions. This post seeks to answer those questions to ensure employers are in compliance and remain in compliance when benefits begin January 1, 2020.

Booking.com Amends Its Commission Policies
("Booking to Charge Commission on Resort Fees in Major Shakeup for Hotel Revenue," Skift Travel News, May 20, 2019)
Although it was a relatively quiet week in the distribution world (at least in terms of the number of noteworthy stories), this first story garnered a lot of attention and deservedly so. We had heard rumblings over the past few weeks that Booking.com was notifying hotels of its plans to charge commissions on hotels’ resort fees and other guest charges (e.g., Wi-Fi charges) irrespective of whether Booking.com or the hotels collect the charges. These rumblings became a reality as the many usual outlets began featuring articles detailing Booking.com’s plans. According to these reports, US hoteliers should see the additional commission charges beginning in June. Hoteliers need to review their contracts carefully to determine whether this unprecedented move is contractually permitted.

The week’s stories remind us how quickly things continue to change in the distribution landscape. Enjoy.

State Attorneys General Exploring Alleged Anti-Trust Violations
("U.S. state AGs looking into Expedia Group, hotel practices in antitrust probe," Reuters Company news, May 9, 2019) 
News of state attorneys generals’ investigation into hoteliers’ online practices has made headlines these past two weeks. Initiated by the Utah state attorney general in 2017 (and now involving an unidentified number of additional state attorneys general), the ongoing investigation is centered on hoteliers’ alleged agreement to not bid on each other’s keywords (the same claims made by Travelpass in its pending Texas litigation).