Duff on Hospitality Law

This week’s OTA & Travel Distribution Update for the week ending October 27, 2017 is below. This week's Update includes a number of substantive stories on OTAs, particularly, European authorities’ renewed interest in OTAs’ allegedly questionable information practices.

Here We Go Again – UK’s Competition and Markets Authority Re-Opens OTA Investigation [OTA]
("Hotel booking sites probed by consumer watchdog," BCC Front Page, October 27, 2017)
Those of you who followed the many OTA investigations conducted throughout the EU over the last few years will recall that the UK’s Competition and Markets Authority’s (CMA) predecessor, the Office of Fair Trading (OFT), initiated the effort by engaging in an on-again / off-again investigation that commenced in 2010. That investigation ultimately produced the idea of “closed group” discounts and little else. Well, the CMA is back. . . Last week the CMA announced that it was opening another investigation into third part booking sites to examine the clarity, accuracy and presentation of information to consumers on such sites. Taking a page from AH&LA and the many concerns it has voiced over the past year, the CMA plans to examine booking sites’ sort order (e.g. how commissions might affect sort order – e.g. Expedia Accelerator), selling tactics (e.g. notices regarding the number of remaining available rooms), discount claims and hidden charges. As part of its investigation, the CMA is circulating questionnaires with distributors and soliciting feedback from hoteliers and consumers who use the sites (responses are due by December 15, 2017). Details regarding the recently announced investigation, contact details for those wishing to provide feedback and an interesting video about the investigation are all linked below.

This week’s OTA & Travel Distribution Update for the week ending October 20, 2017 is below. Short-term rentals feature prominently is this week’s Update.

Short-Term Rental Platforms Not Target of Hong Kong Regulators [SHORT-TERM RENTALS]
("Hong Kong says online rental platforms not target of regulation, MLex, October 20, 2017)
Secretary of Home Affairs, Lau Kong-wah, clarified last week that short-term rental platforms (e.g. Airbnb) are not the target of Hong Kong’s Hotel and Guesthouse Accommodation Ordinance. Under the Ordinance, hosts offering accommodations for a fee for 28 or fewer continuous days are required to obtain a license. Platforms facilitating the booking of such accommodations are not regulated under the Ordinance. In recognition of the difficulty of identifying and then regulating unlicensed hosts, Hong Kong regulators are asking platforms to assist in identifying and de-listing unlicensed accommodations and at the same time proposing changes to the Ordinance to make unlicensed facility owners criminally liable for violations.

Julie Eisenhauer is a guest author and a CPA at Clark Nuber PS.

Revenue is an important indicator of a hotel property’s financial health. It is used to analyze and interpret financial results using key industry operating metrics ( i.e., average daily rate [ADR] and revenue per available room [RevPAR]).

Revenue may also drive the calculation of certain costs, such as management fees, franchise fees, capital improvement reserves, marketing fees and business taxes, as these are often calculated based on a percentage of revenue. As a result, owners and operators need to be aware of changes coming in financial reporting standards related to revenue recognition effective January 1, 2018 (public companies) and January 1, 2019 (private companies).

This week’s OTA & Travel Distribution Update for the week ending Friday, October 13, is below. This week’s Update features stories on short-term rentals (or should I say hotels?), OTAs and loyalty. I hope you enjoy.

Airbnb To Introduce Branded “Lodging” Concept [SHORT-TERM RENTALS]
("Airbnb Experiments With Hotel-Like Concept Outside Orlando," Skift Travel News, October 12, 2017)
For some time now people have speculated as to when (if ever) large distributors might bypass their suppliers all together and enter the lodging business themselves. For those of you who doubted that the day would ever come, let me introduce you to “Niddo powered by Airbnb.” Airbnb announced plans last week to partner with Florida boutique hotel and residential developer, Newgard Development Group, to develop an apartment building outside Orlando, Florida, that will be designed, built and operated to facilitate tenants’ short-term rentals. Tenants who elect to share their residences will be automatically enrolled in Airbnb’s Friendly Building Program (under which commissions are shared with the building’s owner) and will be permitted to share their residences for up to 180 days each year. Features of the planned building include (i) a hotel-like front desk with front desk staff, (ii) shared common areas purpose built for both residents and short-term renters and (iii) in-house cleaning and linen services. Newgard intends to do more of these dedicated short-term rental facilities throughout the South if this first Orlando project is successful.

This week’s short OTA Update for the week ending Friday, October 6 is below. Distribution, loyalty and short-term rentals are featured in this week’s Update.

Airbnb Continues Its Push for Business Travelers with Partnership with WeWork [SHORT-TERM RENTALS]
("Airbnb Aims for Business Travelers with its New WeWork Partnership," Fortune Magazine, October 6, 2017)
Fortune Magazine reported last week on plans by Airbnb to partner with WeWork to provide Airbnb users the ability to book nearby workspace or meeting room facilities. While details of the confirmed partnership have yet to be released, the two platforms apparently began testing the partnership this past week in several key US cities, including Chicago, New York, Los Angeles and Washington D.C. Look for additional details on this intriguing partnership in future Updates.

This week’s OTA & Travel Distribution Update for the week ending September 29, 2017 is below. This week’s Update is a lengthy one and contains a number of stories that, although not directly associated with distribution, I found personally interesting. For those of you who wish that I stick purely to distribution matters, I apologize in advance.

The Schwarzenegger of Hostels in Coming [SHORT-TERM RENTALS]
("Hilton CEO Outlines Plans For ‘Hostel on Steroids", Skift Travel News, September 26, 2017)
For those of you who have been readers of my weekly update for a while now, you know that I frequently include stories about the rapid changes occurring in the hostel industry. Hostels are no longer the dorm-like accommodations that we once stayed in while traveling through Europe. In fact, I’ve suggested in prior Updates that hostels may be the lodging industry’s best answer to the exploding short-term rental industry. At Skift’s annual industry event, the Skift Global Forum, held in New York last week, Hilton CEO, Chis Nassetta, shared Hilton’s plans to launch a new, mico brand of hotel (yes, another brand) for urban markets. According to Chris, this new brand’s emphasis on “connectability, flexibility and a local vibe” will allow the brand’s hotels to capture younger travelers who don’t yet have the financial resources to stay in more traditional Hilton-branded urban hotels earlier in their travel lifespans. Hostel anyone?

This week’s OTA & Travel Distribution Update for the week ending September 22, 2017 is below. This week’s Update features a wide variety of stories on distribution, short-term rentals and loyalty programs.

Delta and Triposaver.com Settle Trademark Matter
("Delta Settles Fraud, TM Suit With Travel Website," Law360 - Hospitality )
Delta Airlines and Explorer Travel Consultants, Inc. (operator of Triposaver.com) presented last week to a New Jersey federal court a proposed settlement of Delta’s claims against the website operator and owner (Hiren Trivedi) arising out of their alleged use of Delta’s trademarks to mislead customers into believing that the website (and others) had a connection with Delta. The proposed settlement would bar the website owner and operator from using any Delta trademarks for the purpose of marketing air transportation or related services, including use of the marks as search engine keywords. For those of you interested, here are copies of Delta’s complaint and the proposed settlement agreement.

The 2017 CIO Summit hosted by Richard Siegel and Hospitality Upgrade Magazine was held from September 6-8, 2017 at the Kimpton Hotel Born in Denver, Colorado. The two-day conference included a mix of programs and networking for technology leaders at major hotel companies, casinos, cruise lines and timeshare companies. My presentation at the Summit, "Hey Alexa, book me a room at..." is available below.

Our weekly OTA & Distribution Update for the week ending September 15, 2017 is below. The week’s short Update features a heavy dose of OTA stories.

Swiss Authorities Examine Booking.com’s Pricing Practices [OTA]

("Priceline’s Booking Defends Commissions After Swiss Launch Probe Into ‘Abusive’ Pricing," Skift Travel News, September 14, 2017)
Switzerland’s pricing watchdog announced last week plans to open an investigation into the pricing practices of Booking.com after finding evidence that commissions charged some Swiss hoteliers could be abusive.

This week’s update features a number of traditional “distributor” stories and updates on short-term rentals. We elected not to include a story involving the much-publicized leadership changes at Expedia (and Uber) as I’m sure everyone has already read more than enough about the surprising developments.

Expedia Continues Its Diversification [OTA]
("Expedia becomes majority owner of hotel operating system Alice," Puget Sound Business Journal, August 30, 2017)
I attended and presented at this past week’s Hospitality Upgrade (Rich Siegel) CIO Summit in Denver. Attendees at this annual event include the top IS and IT executives at the largest regional, national and global lodging companies. I include this introductory information because of comments made by one of the first presenters at the Summit, comments which reverberated through nearly every presentation that followed during the 2-day Summit. The presenter was, Bryson Koehler, CTO for IBM’s Watson – the widely recognized AI platform. The comments related to the key differences between technology upstarts Airbnb, Uber, etc. versus traditional lodging industry members. According to Bryson, Airbnb, Uber and other companies like them are software companies that just happen to offer solutions in the lodging and transportation industries (respectively). In other words, each company started (and remains) a software company, not a lodging company or rental car company. According to Bryson, this software orientation permeates everything the company does, which is a drastically different mindset than that of traditional lodging industry members. So why talk about this here . . . I include this because of what we are now seeing with the continued diversification efforts of both Expedia and The Priceline Group. As each organization continues to expand it products and services (e.g. Expedia’s recently announced investment in Alice), both may soon be seen as software companies that just happen also to be lodging companies (rather than just distributors).