Duff on Hospitality Law

Good Saturday afternoon from Seattle . . .  Our Online Travel Update for the week ending February 21, 2025, is below. If any of our readers still question the profound (dare I say, disruptive) effect that AI will have on online travel (and in particular, distribution), I encourage you to take the time to listen to (or read) the many comments Booking Holdings CEO, Glenn Fogel, in the latest Booking Holdings’ earnings call. A transcript of the call is attached. What should we make of Glenn’s comments? Do they reflect the unbridled optimism of a CEO who is confident in his company’s position to once again leverage the latest and greatest technology (like the many technological developments that preceded AI) to maintain his company’s position in online travel? Or, perhaps the comments were offered in anticipation and defense of the participants’ inevitable questions (and maybe doubts) about the role of online intermediaries in a post AI world? The stories below in this week’s Update seem divided on the issue.    

A few key takeaways from Glenn’s comments . . .

“Adapting to and leveraging new technologies has been in our DNA from the start, and Generative AI is pushing the pace of technology innovation faster than ever.”

“We see the development and use of AI agents [e.g., Operator] and those agents working with other AI agents as a potential way, to more quickly bring together the different elements of travel into a truly connected offering on our platform.”

“We are also excited to be working with leading Generative AI organizations on their Agentic developments. These collaborations reflect our commitment to staying at the forefront of this rapidly developing field and are consistent with our long-standing approach to work with different sources of new customer traffic.”

“ . . . as I mentioned, and we've talked about this in the past, that we're working with all of the major players in the Valley and elsewhere, that we are working together to do things that would be better as togetherness instead of trying to do separately.”

“And I'm just pleased to be in the position we are with all the data we have, with the resource we have, with the people we have, the worldwide network of consumers who trust us, which is also a very big deal.”

I hope you enjoy this week’s Update. 

• • Booking Holdings Reports Strong Fourth Quarter Results.  Glenn and his team had a lot to be positive about beyond Booking Holdings’ AI efforts this past quarter and year.  Some highlights for me were . . .
    • Many key financial metrics were at or above the high-end of previous fourth quarter expectations – room nights, gross bookings growth, revenue growth and adjusted EBITDA.
    • Full year financials reflected similar strong growth – gross bookings (10% YOY growth), revenue (11% YOY growth), adjusted EBITDA (17% YOY growth) and adjusted earnings per share (23% YOY growth).
    • Fifty nine percent (59%) of gross bookings at Booking.com are now “merchant bookings” processed through Booking.com’s payment platform.
    • Additional future layoffs are possible as Booking Holdings continues its previously announced Transformation Program. 
    • Looking forward, Booking Holdings expects a year of “normalized growth” for the travel industry allowing Booking to deliver constant currency gross bookings, revenue and earnings per share growth at targeted (though lower than 2024) levels.
  • Details on TripAdvisor’s Partnership with Perplexity and OpenAI Revealed.  Will AI become intermediaries’ next customer acquisition channel (like Google, metasearch sites and social media are today)?  You bet, at least according to TripAdvisor’s CEO and CFO.  In last week’s TripAdvisor four quarter earnings call, both expressed optimism over the recently announced partnership between TripAdvisor and generative AI platform, Perplexity.  As part of the agreement, Perplexity licenses TripAdvisor data.  According to TripAdvisor CEO, Matt Goldberg, users who come to TripAdvisor via Perplexity are both “incremental” and “high intent.”  Also discussed during the earnings call was TripAdvisor’s recent partnership with OpenAI’s agentic product, Operator, which according to Goldberg allows TripAdvisor “to be best-positioned favorably as agentic AI emerges.”  According to Goldberg, TripAdvisor expects to make more AI announcements in the near future.

Have a great week everyone. 

Good (holiday) Monday morning to everyone . . .  It is President’s Day, which means those of us in the U.S. get to enjoy an additional day off (sort of, but not really) work.  Our Online Travel Update for the week ending Friday, February 14, 2025, is below.  As I promised in our last Update, this week’s Update contains a number of stories providing concrete examples of how AI is being used (and predicted to be used in the near future) in the travel industry.  I’ve also included a story updating the status of the UK’s Digital Markets, Competition and Consumers Act 2024, which the UK’s Competition and Markets Authority (CMA) has confirmed it will begin to enforce in April of this year.  For those of you who have asked recently what new regulations are on the horizon – after the FTC’s Junk Fees rule and most recently, the DSA’s KYP requirements – you might want to take a closer look at the new consumer-focused legislation.  I plan to have more information about the Act and its requirements in our next Update.  Enjoy.

• • Here Come the AI Agents.  For the past few weeks, we’ve been featuring stories about OpenAI’s new AI-powered agent, Operator.  Hospitality.net published an article last week that provides a helpful overview of these new tools, including a description as to how these tools could actually aid hoteliers and their direct booking efforts.  As the author notes, timing is everything with these newest technologies and hoteliers now need to move with a sense of urgency (particularly, with OTA’s current and growing head start).
    
    
  • Southeast Asia Leads the Charge in AI Transformation.  With its online travel penetration levels estimated to increase to 74% by 2027 (with the majority of that soon to be coming through mobile), Southeast Asia is expected by many to be at the forefront of AI disruption to the travel industry.  Young travelers in the region are already transitioning to AI-based itinerary planners and concierge apps. 

Have a great week everyone. 

Good Sunday afternoon from Seattle . . .   Our Online Travel Update for the week ending Friday, February 7, 2025, is below.  This week’s Update features a variety of stories, including details on Expedia’s recent quarterly earnings release, news of recent layoffs at TripAdvisor and a heavy does of AI related stories. 

Given recent conversations that I have had with many of you about AI and its likely effects on online travel, particularly around marketing, search, distribution and now, actual transacting or booking, I plan to use our Updates (at least for the foreseeable future) to provide our readers examples of how AI is actually being used in these areas.  For those of you who have read our Updates over the past month (or saw my or the many presentations at the recent annual HEDNA Conference), you now know that AI is no longer an ethereal concept that may one day find its way to the travel industry.  Recent advances in the technology have brought us real world applications that one day soon may be the primary method or platform through which travelers are inspired, travelers search and plan and ultimately, travelers book.  If nothing else, I don’t want to see a repeat of the early 2000’s when hoteliers were so poorly prepared to respond to the phenomenon of the internet, and specifically, the growing control and influence of online travel intermediaries.  Enjoy.

• Expedia Speaks to AI Efforts in Strong Fourth Quarter Earnings Release.    In today’s Update we feature two reports on Expedia’s recent fourth quarter and full year earnings’ release.  We’ve also included a copy of the transcript from the recent earnings call.  Key takeaways for me from the recent release include the following:
  • Expedia posted strong YOY growth, including notably 21% growth in its B2B business (EPS) and 25% growth in its ad revenue.  It would be interesting to know how much of the ad revenue increase is attributable to corresponding reductions in supplier compensation levels. 
  • Expedia is making conscious efforts to introduce AI into each of its key strategic goals for 2025, including by (1) working to ensure that Expedia’s brands appear in travelers’ generative AI searches, (2) exploring opportunities to partner with native AI travel startups to become their supply partner and (3) developing AI partnerships to better power Expedia’s B2B business.
  • Expedia (particularly, its new CFO) is again open to looking at M&A opportunities. 
    
    
• Is OpenAI’s Operator a Game Changer?  One of the most read stories on PhocusWire this past week was its piece on the newly introduced OpenAI agent, Operator.  Website optimization may never be the same again.  I’d encourage all of our readers to read the article.  Demos of the new Operator agent booking travel (and other services) are also widely available on YouTube. 
  
  
• A National Junk Fee Standard Takes a Step Forward.  This past week, the Senate Committee on Commerce, Science and Transportation approved the Hotel Fees Transparency Act, legislation that is favored by both the online intermediaries (Travel Technology Association) and hoteliers (American Hotel & Lodging Association).  Many of you may be asking why we still need federal legislation when we now have the national FTC rule.  As I’ve discussed with many of you (and as noted in my recent HEDNA presentation), the FTC rule does not preempt other state and local laws that are more protective.  This lack of preemption opens the door to states like California and Minnesota (both of which have enacted junk fee rules) and countless others (20 at last count) to adopt potentially contradictory (and confusing) requirements (e.g., what is more protective – California’s requirement to display only total price or the FTC’s requirement that total price be displayed most prominently).

Have a great week everyone.

Good Saturday morning from Seattle . . .   Nice to be back in balmy (25°) Seattle after a week working in frigid New York. 

This week’s Update presents yet another announcement by yet another generative AI platform about yet another AI tool that has direct application to (and is likely to have a major disruptive effect on) online travel.  I’ll admit that I’ve been a little slow to grasp AI’s potential, particularly for online travel.  Maybe each of you were already aware of (and planning appropriate responses to) the many collaborations between legacy travel platforms (Kayak and TripAdvisor) and generative AI platforms (Gemini, Perplexity) featured in our Updates over the past few weeks.   But, even with that knowledge, I’m guessing that this week’s demonstration by OpenAI of its new “Operator” agent tool was a wake-up call for at least a few of you. It was for me.

We feature only two stories in this week’s Update – stories that offer two leading industry perspectives on last week’s OpenAI demonstration.    Enjoy.

• • OpenAI’s Agent “Operator” Can Book Travel.  I’ll let our readers review this week’s two stories themselves.  Some of my immediate reactions include (i) interesting to note that the demonstrations feature only well-known travel intermediaries (Booking.com, Priceline and TripAdvisor) and not suppliers, and (ii) do traditional online marketing concepts of SEO, SEM, keywords and negative keywords apply in this context (in other words, how does one affect the Operator agent’s preferred travel resources)?  Application of this new tool could cement intermediaries’ position in the travel distribution landscape (if always the preferred choice of such agents) or erode the position (if such agents ultimately prefer booking direct through the relevant suppliers).  So much to think about here. 

I hope to see many of you this next week in San Diego at the annual HEDNA distribution event.  If you do plan to attend, please email or text (206-321-8386) so that we can connect while there.  Have a great week everyone.

Good Sunday morning from Seattle . . .  Our Online Travel Update for the week ending Friday, January 17, 2025, is below.  Other than Perplexity’s newly announced partnership with TripAdvisor (readers, please read the story below), this past week was relatively quiet as the industry (and the world) waits with anticipation (or for some, bated breath) for the soon arrival of the Trump administration.  What changes might we see on Monday or in the weeks ahead remains to be seen.  Many of the stories we’ve been following over the past weeks or even months – including a story or two featured in today’s Update - may soon disappear only to be replaced by entirely new and unexpected stories.  Enjoy.

• • CWT and AmexGBT Merger Drama Continues.  On the heals of the U.S. Department of Justice’s recent decision to file suit to block the planned merger, the UK’s Competition and Markets Authority (CMA) has announced a delay in the delivery of its final decision regarding the proposed merger.  According to the announcement, the CMA needs more time to review the 1500+ surveys of travel managers submitted by Amex GBT and CWT and to better define the appropriate “market”  for considering the anti-competitive effects of the planned merger.  The final decision is now not expected until March 9.  In the meantime, Amex GBT has responded to the DOJ’s suit, arguing that the entire case (filed in the waning days of the Biden administration) was a “blatant politicized effort.”  According to Amex GBT, the DOJ’s understanding of the current corporate travel market is flawed, arguing that the market has changed considerable in recent years with the entrance of corporate travel platforms, Navan, Kayak for Business and Spotnana and that the merger would actually be pro-competitive (citing the example of Amex GBT’s adoption of NDC).  Whether the DOJ’s effort survives the upcoming presidential transition remains to be seen.  Rumors suggest that UK and EU competition regulators may also soon scale back their competition efforts to gain favor with the incoming U.S. administration, which could affect the CMA’s efforts.  More to come.
    
    
  • TripAdvisor and Perplexity Announce Partnership.  It was just last week that we identified Perplexity as one of the first generative AI platforms to feature paid advertising and encouraged readers to give consideration as to how their direct booking efforts (and contracts) may need to be updated to account for AI’s growing influence.  This past week, Perplexity made industry headlines with its announced partnership with TripAdvisor.  According to the announcement, TripAdvisor plans to share its data with Perplexity, including TripAdvisor’s listings (content, photos, etc.), links to hotels, restaurants and experiences and AI generated summaries of its billions of user reviews.  With this robust industry data, Perplexity hopes to deliver better, more personalized responses to users’ travel queries.  Where might this partnership ultimately lead?  TripAdvisor hopes to use the sharing arrangement to ultimately drive bookings.  For example, if TripAdvisor’s data is used to produce a response, the response may include TripAdvisor’s logo and a link to TripAdvisor’s page for booking (and necessarily away from the supplier’s own website).  The partnership may also include TripAdvisor’s participation in Perplexity’s advertising program, which to date has not featured any travel company. 

Have a great week everyone.  I look forward to seeing many of you at the upcoming HEDNA Conference in San Diego next week.  Safe travels everyone.

Good Sunday morning from Seattle . . .  Our first Online Travel Update for 2025 is below. The past two weeks produced a number of interesting stories, including the Department of Justice’s attempt to stop the planned Amex GBT / CWT merger, interesting predictions coming out of Skift’s recent Megatrends events and valuable reminders for anyone looking to make major changes to their loyalty program. Enjoy. 

• • Megatrends Conferences Produce Interesting Headlines and Other Important Considerations. By now, most everyone has probably seen or read some of the predictions coming out of this past week’s Skift Megatrends conferences in New York and London. Thomas Reiner, a partner at Altimeter Capital, believes that online travel platforms face a daunting future (and for metasearch sites, possible outright extinction) with the advent of AI powered search. According to Thomas, the advent of AI powered search tools will allow travelers to bypass traditional travel platforms and go direct to hotels and other travel suppliers.  Kayak CEO, Steve Hafner, raised similar concerns about the future of existing travel sites and apps, though Steve suggested that a “major travel company” like Airbnb or Booking.com could be a big benefactor of AI by becoming one of the first platforms to successfully integrate an AI engine.  While’s Steve’s predictions about the likely effect of AI on traditional travel sites’ futures received most of the headlines, other comments by Steve during his presentation caught our attention. Specifically, Steve’s comment that Kayak was now making its “data” available to Google Gemini (Google’s AI tool) raised a number of questions. Steve’s comment combined with some recent discussions we’ve had with one of the largest online travel agents have caused us to begin re-examining our standard approaches with regard to IP licenses, confidentiality, privacy and data security and sales / marketing guidelines (e.g., SEO and SEM may soon fade away, but what comparable concepts will govern the use of AI tools and influence AI responses).  For those of you wondering, paid advertisements are already a possibility on some AI platforms. This year may prove that AI and its effect and influence on travel was not just a bunch of hype.  Stay tuned.
    
    
  • UK Adopts ETA Requirements. So what, you ask? Unless you are traveling to the UK soon, why should you care about the recent adoption of new entry requirements for the UK?  This past week, we were reminded that passport, visa and other entry requirements can have a huge effect on travelers’ plans.  Nothing like booking that dream resort stay only to be denied access to your flight (or entrance to your destination) because of the failure to produce needed visas or other authorizations. What obligations do travel platforms – or by extension, supplier websites – have to inform users or travelers of these requirements (or changes to these requirements)? It is an interesting question with no clear, absolute answer. Disclaimers appear to work well and are often advised, but supplier websites rarely have the same set of robust booking terms and conditions found with travel platforms. It may be time to reconsider again your standard website terms and conditions or booking terms and conditions (if you have them). 

To those of you effected by this week’s horrible fires in Los Angeles, our thoughts and prayers are with you.  Have a good week and be safe.

Good Sunday morning and Happy New Year!!  We are again providing a roundup of a few of the stories that we feel made the biggest impact in the online travel industry over this past year (and continuing into this year).  Wishing all our readers a great 2025.

Good Sunday morning from Seattle and happy holidays . . . Well, we definitely missed this one. Last week I wrongly predicted that we would see little near term progress on national junk fee regulation. With leadership at the FTC poised to change with the upcoming presidential transition, many thought that the FTC’s ongoing efforts (and draft rule) were likely to be delayed or even killed. Outgoing leadership at the FTC apparently thought differently.

On Tuesday (December 17), the FTC announced its final junk fees rule. The final rule is much narrower than the proposed rule that was issued in October 2023 (and garnered 60,000 comments) and focuses exclusively on live-event ticketing and short-term lodging (i.e., hotels and short-term rentals). A few key highlights to consider:

• • The rule does not prohibit resort or amenities fees (or any similar pricing model). Hotels may still impose the mandatory charges.
  • The rule requires that the total price (rate plus other mandatory fees, excluding taxes) be clearly and conspicuously displayed whenever pricing is displayed or advertised. The total price must also be more prominently displayed than other pricing information.
  • The new rule applies both to hoteliers and other third-party distribution platforms.
  • The rule goes into effect 120 days after being added to the Federal Register (date uncertain) and could be invalidated by an act of Congress under the Congressional Review Act. The fact that the rule does not even go into effect until months into the Trump administration caused one FTC commissioner to dissent to the proposed rule – not on substantive grounds, but on procedural.

We’ve included below two of the many stories published this past week about the new final regulation. We’ve also attached copies of the many materials released by the FTC when the final rule was announced, including the full text of the rule and its background details.

If you have questions about the new rule or how it might affect your operations, please let us know. We are working with several clients on the implications of the final rule.

Have a wonderful holiday everyone.

Good Sunday morning from Seattle . . .   Our Online Travel Update for the week ending Friday, December 13, 2024, is below. 

Google and its “efforts” to comply with the DMA again garnered most of the industry’s attention.  As I said last week, expect this story to continue well into 2025.  Skift also provided a helpful status update on federal efforts around junk fees.  With the upcoming change in administrations in DC, I don’t expect to see any real progress federally around junk fees for some time (thus leaving open the door for states to regulate the issue themselves on less than a uniform basis (e.g., see Minnesota’s new junk fee requirements, which take effect in the New Year)).  Finally, airline loyalty programs continue to be under the microscope.  Why, you ask, should we care about airline programs?  The short answer is that airline programs and the rules that govern them (even possible new rules) are instructive when creating or operating any other form of loyalty program – including hotel programs.  Enjoy.

• • Google’s Latest Display Changes Draw Criticism from Platforms and Hoteliers.  In its ongoing efforts to comply with the European Digital Markets Act (DMA), Google recently tested changes to its display of hotel search results that removed its interactive map and associated free booking links; other links to intermediary booking platforms (the traditional “blue links”) remained.  According to Google, the changes, which were conducted in only three European countries, resulted in a significant drop of traffic to hotels while traffic to the intermediaries remained largely constant.  Google’s announced results come just weeks after a group of booking intermediaries criticized Google’s compliance efforts. 
    
    
  • Booking Holdings Expects $450M in Annual Savings from Organizational Changes.  The planned changes, which were announced earlier this year, will include job cuts at flagship, Booking.com, which alone are expected to produce over $100M in annual savings.   Additional savings are expected from modernizing processes and reducing their real estate portfolio. 
    
    
  • Airline Loyalty Programs Under the Microscope.  Airline loyalty programs are currently the subject of several ongoing investigations, including investigations by the Department of Transportation, the Justice Department and the Consumer Financial Protection Bureau.  The investigations (some of which we have written about previously) are largely focused on program changes that devalue the programs’ awards or benefits.  While the future of these investigations may be in jeopardy following the recent election, the rising chorus of consumer complaints regarding the programs is likely to continue.  More than ever, frustrated consumers have taken their concerns to social media channels, and trusted loyalty program resources (e.g., The Points Guy, Point.me) have questioned recent program changes.  For hoteliers, there are many potential lessons here, most importantly that plans to amend existing programs (particularly, any direct or indirect devaluing of credits) must be considered in light of likely (and possibly, extremely vocal) consumer backlash. 

As the year draws to a close, I suspect we’ll find fewer and fewer “Update worthy” stories to share.  You may not hear from us again until our annual “year in review” Update, which we usually circulate shortly after the New Year.  If we don’t connect before, I hope everyone has a wonderful holiday season.  Here’s to a great 2025 for you and your families.

Good Sunday evening from Seattle . . .  

As many of you know, I returned a few weeks ago from an extended sabbatical – three months well spent traveling, cooking, reading and driving my wife crazy.  Now that I am back in the office, it is time to start again our Online Travel Update.  We are using this opportunity to re-format things a bit and to re-commit ourselves to identifying the stories that we feel are most important and relevant to our clients; we all receive far too many “industry” updates each day and/or week.  For that reason, we may not circulate an Update each week.  If there is nothing important to share, there is no need for an Update.  Our Updates will also continue to feature comments from me, though you may find that my comments more than ever reflect my particular opinion, viewpoint or cynicism on a specific story or issue.  If you ever disagree with me, let me know.  I always welcome your feedback.

Finally, if you have ideas on how we might improve our Update, please let us know.  We want to make our Updates as helpful as possible.  If you know someone who might benefit from the Update (or even better, might benefit working with our hospitality team), please also let me know.  Thank you for being part of this newsletter. 

Now on to the Update . . .   Stories from the past two weeks are below.  Hotel fees and pending federal legislation seeking to uniformly regulate hotel fees remain an important industry issue.  Other updates reflected in the stories below include Google’s ongoing efforts to satisfy EU regulators and Expedia’s off and on relationship with Hopper.  Did Hopper really improve its customer UX such that Expedia is now comfortable working with Hopper or did Expedia’s new leadership’s desire to restore revenue lost as a result of terminating the Hopper relationship drive this latest decision?  Finally, did anyone listen to the recent Expedia quarterly earnings call (or read the associated transcript)?  I know at least one of you did because we talked about it last week.  I don’t know about you, but if you listen carefully to Expedia’s announced plans around packages (as explained by new Expedia CEO, Ariane Gorin), Expedia seems poised to turn packages and the use of package rates on their head.  Give it a listen or read.  It may be time to ask start asking questions of your Expedia account rep.  Enjoy.

• • Industry Groups Voice Strong Support for Federal Junk Fee Legislation.  It isn’t every day that both AH&LA and the Travel Technology Association speak out in favor of the same issue.
    
    
  • Industry Layoffs Are Not Limited to Hoteliers.  In recent weeks, much has been written about re-structurings and layoffs occurring at the large hotel companies.  This past week, we were reminded that these same re-structurings and layoffs are also occurring with some of the largest distribution platforms (Expedia earlier this year and now Booking Holdings).  Booking Holdings’ recent announcement regarding the layoff of 60 employees at one of its business units, Rocket Travel, raises interesting questions about Booking Holdings’ overall business (B2B) strategy. 
    
    
  • First Hoteliers, Now Online Travel and Tour Companies Voice Concern Over Google’s DMA Changes.  Something tells me that we will be hearing and reading a lot about this issue for weeks and months to come.  Expect to see more from us on this issue in future Updates as I get my arms around these latest changes.

Have a great week everyone.