Duff on Hospitality Law

August has been a slow month in the distribution world as this week’s Update reflects.

Seattle Is Home to Yet Another Travel Industry Startup
("KuaiBangXing Links Chinese Travelers With Activities: Travel Startup Funding This Week," August 17, 2018)
There must be something in our Seattle water...Seattle-based activities booking platform, KuaiBankXing, announced last week that it had completed its $1 million angel round of funding. The 3-year old startup assembles itineraries (using either existing programs or directly assembling its own combination of tours and activities) and marries those itineraries with Mandarin speaking escorts.  KauiBankXing not only then promotes and sells these itineraries to inbound Chinese travelers (via OTAs like Ctrip and Fliggy), but also works with independent tour and activity providers to better promote and facilitate transactions with inbound Chinese travelers.

Travel Agency Hit With TCPA Class Action Over Cuba Texts
Law 360 - Cybersecurity & Privacy on Aug 10, 2018 (subscription required)
An online travel agency that arranges trips to Cuba got slapped with a proposed class action in Florida federal court on Thursday for allegedly violating the Telephone Consumer Protection Act, with the lead plaintiff claiming he received an illegal telemarketing text message via an automatic telephone dialing system.

Corporate Travel Sector Eyes a New Distribution Model Down Under
Skift Travel News on Aug 2, 2018
Qantas, Serko, and Corporate Travel Management are leading the charge towards new distribution capability adoption in Australia, promising better access to rich content. They will have to overcome plenty of confusion in the market, however, before the new distribution channels are fully accepted. Global airlines have moved slowly to adopt new technology that allows them to more effectively merchandise their products and connect directly with the companies that sell their flights.

This week’s Update features a variety of stories, including a story on an unique approach to loyalty. Enjoy.

Sweden Challenges “Narrow” Parity
("Swedish competition court orders Booking.com to change contractual restrictions," MLex, July 20, 2018) 
You can add Sweden to the handful of European countries (e.g., Italy, France and Germany) not convinced that Booking.com’s proposed rate parity panacea (a/k/a “narrow parity”) solves all competition ills. We hope to have more information about this recent Swedish court decision in the weeks ahead.

This week’s Update is heavily focused on the EU and its recent enforcement activities.

ETTSA Challenges European Commission’s Failure to Act
("ETTSA Files Complaint Against EU Commission Over Airline Surcharges," MLex, July 19, 2018) (subscription required)
While we don’t regularly feature stories detailing other travel industry members’ distribution challenges, we felt the European Commission’s recent decision to leave intact Lufthansa’s indirect booking surcharges warranted highlighting.  Since the Lufthansa policy was adopted in September of 2015, the European Technology & Travel Services Association (ETTSA) (which is comprised of a variety of indirect bookings platforms – GDSs, OTAs, etc.) has taken steps to challenge the policy, including filling an official challenge to the policy with the European Commission soon after the policy was announced. In May of this year, the European Commission announced that it intended to take no action in response to the Lufthansa surcharges or ETTSA’s complaint challenging the surcharge. Angered by the Commission’s failure to act, ETTSA filed a complaint this past week against the European Commission challenging on both procedural and substantive bases the Commission’s failure to act. While this series of events may not have direct application to hotel bookings, it may provide a glimpse into the current thinking of the European Commission toward suppliers’ attempts to better manage their indirect channel partners. More to come, I’m sure . . .

As our Update reveals, Booking Holdings monopolized the distribution headlines this past week.

Booking.com Goes Back to Basics
("Booking.com gets down to Basics, gets rates from other agencies," PhocusWire, July 10, 2018)
Hoteliers’ ongoing efforts to rein in the sometimes abusive distribution practices of certain wholesalers just took on new significance. Booking.com acknowledged last week that is was testing a new service – Booking.Basic – which features deeply discounted rates for certain properties sourced from other distributors (as opposed to the hotels themselves). While initial tests indicate that this new service is largely limited to Asia and features rates obtained from Booking.com partners Agoda and Ctrip, the obvious question is how widespread will this service become. Will the practices of certain wholesalers mean that deeply discounted net package rates will soon find their way to the Booking.com website? Time to review those sourcing provisions in your favorite Booking Holdings contract.

This week’s Update features a variety of stories, including an additional story on last week’s announcement by the UK’s Competition and Markets Authority regarding its recent commenced enforcement efforts against several unnamed OTAs operating in the UK. Our attempts to obtain a list of the OTAs targeted by the CMA were rebuffed last week, so we will just have to wait to see which distributors are in the CMA’s crosshairs. Enjoy.

Good News for Disabled Travelers and the Hoteliers That Serve Them
("Online Travel Players Boost Accessibility for Travelers With Disabilities," Skift Travel News, July 6, 2018)
Skift featured a story last week that detailed efforts being made by both existing and newly established travel websites to accommodate the many challenges experienced by disabled travelers (e.g. inaccessible websites, little or no description of accessible accommodations, etc.). Not only is this good news for disabled travelers, but also the many hoteliers that diligently seek to serve them. For years now, we’ve advised clients that the ADA’s booking requirements impose responsibility for satisfying those requirements solely on hoteliers – irrespective of whether those bookings are made directly with the hoteliers or indirectly through a third party channel. With these latest efforts by third party distributors, hoteliers may have one less concern keeping them awake at night.

This week’s Update features a number of “legal” updates to stories we have been following for some time. Enjoy.

CMA Initiates Enforcement Action Against Booking Sites
("Hotel booking sites could be forced to stop claiming ‘one room left’," Law360 - Hospitality, June 25, 2018) 
Following its nearly 8-month (re)investigation of online booking sites operating in the UK, the UK’s Competition and Markets Authority (CMA) announced last week that it was commencing enforcement actions against several unnamed “booking sites” over their alleged anti-competitive practices. According to the CMA, these questionable practices include (1) hotel rankings based on factors unrelated to a consumer’s requirements (e.g., commission levels), (2) pressure tactics that give consumers a false sense of availability, (3) misleading discount claims and (4) hidden charges. The CMA will now seek binding commitments from the offending sites or, in the absence of such commitments, pursue claims in UK courts. As part of its enforcement efforts, the CMA is also referring a number of its concerns to the UK Advertising Standards Authority (ASA) to examine whether the sites’ frequent claims of offering a “best rate guarantee” or the “lowest price” are misleading. It will be interesting to watch (a) how this enforcement effort unfolds and whether other European jurisdictions will soon follow suit – recall that the many anti-trust investigations that led to Booking.com’s and Expedia’s “narrow parity” compromise began with the efforts of CMA’s predecessor, the Office of Fair Trading, and (b) whether this effort results in any changes to global booking sites’ worldwide programs (e.g., Expedia’s Accelerator Program or Booking.com’s Preferred Hotel Programme). The official CMA news release is also available.

This blog post was originally published as a Legal Alert on GSB's website on July 3, 2018. The post was also authored by Victoria Redman, GSB’s 2018 Summer Associate, located in the Seattle office. 

On Thursday, June 28, 2018, the California Consumer Privacy Act of 2018 (the Act) passed with resounding support from both Republicans and Democrats, who voted in favor of the bill 73-0-7 in the Assembly and 38-0-3 in the Senate. The Act, which takes effect on January 1, 2020, imposes requirements on the processing and protection of personal data similar to, and in some cases, more extensive than the requirements under the EU General Data Protection Regulation (GDPR), which went into effect on May 25, 2018.

Our weekly OTA & Travel Distribution Update for the week ending June 22, 2018 is below. This week’s Update features not one, but two stories (offering perspectives from both the hospitality and technology industries) on Amazon’s recent announcement regarding Alexa for Hospitality. Amazon’s announcement is further evidence of the power of voice and its potential impact on travel and lodging in particular (something I’ve been presenting and blogging about for the past two years).

Alexa’s Move into Hospitality Becomes Official
("Amazon launches an Alexa system for hotels," TechCrunch, June 19, 2018; "Amazon Wades Into Travel as Hotels Turn to Alexa in Rooms," Skift Travel News, June 19, 2018)
On Tuesday, Amazon announced the creation of a division within Amazon (Alexa for Hospitality) dedicated to placing Amazon’s Alexa-enabled devices in the variety of accommodations offered in today’s lodging industry. Amazon’s announcement was buoyed by Marriott’s simultaneous announcement of its decision to run a 10 property (multi-brand) pilot with the newly created division to place Alexa-enabled Echo products in Marriott hotel rooms later this summer. According to Jennifer Hsieh, Vice President of Customer Experience Innovation at Marriott, “voice-first experiences have become an increasingly important channel for our guests, and we [Marriott] think Amazon is leading the market in this technology.” (Bad news for Apple’s Siri, which was being tested by Marriott together with Alexa prior to the announcement). Initially, the voice-activated devices will be set up to allow guests to request hotel-specific information (e.g. spa hours), to connect to hotel services (e.g. in-room dining) and, working with a hotel’s back-of-house systems, to order and reserve services (e.g. spa appointments). Additional features may include control of in-room systems, in-room phone access and music play. Let’s hope that pilot programs like Marriott’s (or others planned by rental management companies and other lodging companies) give suppliers at least a fighting chance against their well-capitalized distribution competitors that will inevitably pursue their own voice-activated strategies.