Duff on Hospitality Law

Stories detailing investors’ renewed interest in travel technology feature prominently in this week’s stories.

Lola Finds a Home?
("Will Lola’s New Partnership With AmEx Revive the Struggling Startup?" Skift Travel News, November 13, 2018)
Readers of our Update will likely recall the many stories we have featured over the past few months about Lola, the mobile-only, chat-powered travel booking application featuring real live AI-enabled travel agents. Since introducing the application in 2016, co-founder Paul English has evolved Lola from a leisure / business travel application, to an individual business travel application, to now, with its recently announced partnership with American Express Global Business Travel, a broad-based, managed business travel application for the masses. With this partnership, Lola gains access to thousands of repeat business travelers (together with the benefit of American Express’ many preferred hotel and airline connections), while American Express gains access to technology that may allow it to provide travel management services to businesses traditionally too small to use American Express’ traditional travel tools.

Regulation of Large Online Platforms is Coming to Japan
("Online platforms may face stricter rules, enforcement in Japan, panel says," MLex, November 5, 2018) (subscription required)
Following up on a story (and prediction) included in last week’s Update, it appears that Japan (through a panel of experts operating under the direction of the Japanese Ministry of Economy, Japanese Ministry of Trade and Industry and Japan Fair Trade Commission) is definitely heading toward more aggressive review and likely regulation of large online platforms operating within Japan. The 15-member panel has been working since July and expects to begin interviews next month with representatives of the online platforms as well as the domestic businesses that deal with them. The results of the panel’s efforts will serve as the basis for establishing key principles for regulating the platforms (which may then take the form of amendments to existing laws and regulations or new ones). Additional detail about the panel’s work and the direction it is headed should be available toward the end of the year.

This week’s Update features a variety of stories covering search, short-term rentals, wholesalers and traditional OTAs. This week's highlights include:

Much Ado About Nothing
("How Google's Newly Expanded Trademark Policy Will Impact Hotels," Duff on Hospitality Law Blog, October 24, 2018)
Over the past several weeks there have been a number of prominent stories in the traditional travel technology, distribution and sales and marketing outlets lamenting the profound effects of recent changes to Google’s trademark and keyword practices. These stories prompted my trademark colleagues to re-examine Google’s policies and to update our clients on what, if anything, really changed. As you can read from their recent blog post below, not a lot has changed.

This week's Update includes a story detailing yet another state’s efforts to close existing tax loopholes so that it may collect proper sales/occupancy taxes from OTAs. I hope you enjoy.

Pennsylvania Closes Tax Loophole
("PA Senate Approves Bill to Close Sales Tax Loophole with Online Travel Companies, PA Senate GOP, October 26, 2018)
For years now we’ve read and featured stories about enterprising legal counsel convincing state and local governments to pursue claims against merchant-model OTAs for failure to pay sales or occupancy taxes on the full selling price charged to guests by the OTAs (instead of paying taxes only on the net rate paid by OTAs to the hotel supplier). More often than not these claims ended in decisions against the local governments on the basis that the operable tax statute was not written to apply to the mark-up or margin added by OTAs to the net rates they received (among other things).  Pennsylvania is determined to do something about that. Last week, the Pennsylvania Senate passed legislation making clear that the State’s sales tax applies to the full selling price charged by OTAs operating in the State. The Senate passed legislation now moves on to the Pennsylvania House of Representatives for further consideration.