Duff on Hospitality Law

This week’s Update features a variety of stories, including updates on Ryanair’s attempts to stop platforms’ scraping of fares and other content from its website.  We will continue to keep monitor Ryanair’s claims against Booking.com in the weeks ahead.  Enjoy.

• • European Commission Resumes Review of Booking Holdings’ Proposed Purchase of ETraveli.  It’s been some time since our last story on Booking’s planned purchase of online flight booking platform, ETraveli.  The Commission suspended its review of the purchase approximately four months ago, but announced this past week that it was resuming its work.  The Commission has until August 30 to complete the review. 
    
    
  • Fintech, Tips, Support Service Fees and More:  Hopper Has It All.  Much has been written in the industry (including our own Update) about Hopper.  Hopper was one of the first platforms to fully leverage “fintech” tools as part of its B2B and B2C offerings.  With the renewed attention on resort fees and other mandatory charges, Skift’s recent article about “tips” on Hopper’s booking platform caught our attention.  Although Hopper’s “tip” is not mandatory, users of the platform (assuming they even see the charge) must affirmatively opt-out of payment the flat-fee or percentage charge.  Hopper takes a similar approach with support service fees, which also require an unsuspecting user to opt-out of paying the additional charge.  Does the ability to opt-out of these charges allow Hopper to avoid current efforts to reign in so-called “junk fees,” possibly, depending on the conspicuousness of the fees and their disclosures.  If the tips are simply a mechanism for offsetting operating costs (as opposed to actual “tips” paid to individuals who assist in making the booking), however, Hopper could garner the attention of regulators or an enterprising class action firm. 
    
    
  • Expedia Launches Platform to Make Entertainment Tourism Bookable.  Expedia Media Solutions announced last week the launch of a new media platform that allows users to shop and book travel while watching travel content.  If successful, the platform will allow Expedia to capitalize on the growing influence of television and movies (think “White Lotus”) on travelers’ decisions.  Brand USA has partnered with Expedia in the launch of this latest new offering by working together to create a dedicated channel (GoUSA) that features inspirational travel content and interactive maps, while at the same time allowing viewers the opportunity to book featured destination (hotels, air and experiences) in real time.  The channel is now live in Canada and will be rolled out to other international markets over the course of the year. 

As evidenced by the stories in this week’s Update, this past week was a relatively quiet week in online travel.  Not surprisingly, many of this past week’s headlines featured the recent report by Phocuswright suggesting that the online booking channel pendulum has once again swung back in the OTAs’ favor.   Enjoy.

• • How Do You Attract and Convert More Online Bookings?  Act Like a Retailer, Not a Hotelier.  A recent survey conducted by Travelport revealed that travelers, particularly younger travelers, want the same “simple, easy and supportive experience” they receive from every other online sector (other than travel).   So how do hoteliers address these issues?  Provide simplified and intuitive shopping experiences, easy support and transparency.  Other key takeaways from the 2000 consumer survey include (a) 59% of consumers report that getting exactly what they want is more important than price, (b) 84% of younger (18-41) consumers want human led customer support (so much for ChatGBT) and (c) 49% of consumers would pay more for travel to save on carbon emissions. 

• • TripAdvisor Releases Biennial Review Transparency Report.  TripAdvisor has released its biennial Review Transparency Report.  According to the Report, of the nearly 30 million reviews received by the online review platform, 4% of the reviews were determined to be fake or fraudulent in 2022.   TripAdvisor’s fraud detection process identified 72% of the fraudulent submissions before they were posted online.  TripAdvisor also reported that it removed more than 24,000 reviews as originating from paid review companies and imposed ranking penalties on more than 33,000 businesses for fraud.

• • OTAs Once Again Receive the Majority of Online Bookings.  According to a recent report by Phocuswright, OTAs are again enjoying the majority of online hotel bookings.  Prior to the pandemic (largely driven by hoteliers’ much-publicized direct booking efforts and robust loyalty programs and then favorable public perceptions during the pandemic), hoteliers were able to reduce their reliance on OTAs.  Now, during this post pandemic period, OTAs have taken back some of their lost share.  Prior to the pandemic, OTAs’ share had dropped as low as 49% of online gross bookings, but that number has now rebounded to 52%.  For reference, each percentage point can represent $1B in business (or $100M - $200M in commissions).  So why the shift?  Experts point to OTAs’ advantage in marketing (marketing investments have again ramped up post pandemic) and improving technology.  How a possible 2023 recession might again affect the two sides’ relative market share remains to be seen.

This week’s Update features the obligatory Expedia / ChatGPT story as Expedia garnered most of this past week’s industry headlines with its announced integration of ChatGPT into its iOS application.  For those of you following the evolving competition landscape in the EU, you might find our lead story regarding the EU Commission’s recent release of its 2022 overview of some interest.  For those of you interested, links to the EU Commission’s report and accompanying staff working document (detailing, among other things, ongoing efforts in the travel industry) are available in the featured story. 

• • European Commission Releases Report Summarizing Its 2022 Policy Initiatives.  While the Commission’s report provides a good high-level review of the Commission’s 2022 initiatives, the accompanying Commission Staff Working Document provides much greater detail about many of the Commission’s initiatives broken down by both “competition instruments” and industry specific enforcement efforts.  Of particular interest is the Working Document’s discussion of the lodging industry (found on page 92 of the Working Document), highlighting the Commission’s 2017-2021 study of hotels’ distribution practices following several member states’ adoption of so-called narrow parity requirements and suggesting that the study and possibly the DMA (hello Booking.com) would continue to play a role in the Commissions’ future monitoring and enforcement in the industry.  For those of you wanting more information about the 2017-2021 study, we included the study in an earlier Update and a copy of the study’s results is available here.
    
    
  • Lufthansa’s Innovation Hub Launches Meetings Booking Platform - Cloopio.  In an effort to better leverage the WFH and hybrid work models, Lufthansa’s Innovation Hub (LIH) has launched a new booking platform designed to promote “curated team off-site packages.”  Cloopio’s offerings (initially around Berlin) include transfers, accommodations, meeting rooms, catering and team building activities.  Cloopio is the second small group booking platform launched by LIH. 
    
    
  • Kayak Abandons Plans to Become Lifestyle Hotel Operator.  Anyone surprised by this announcement?  We’ve featured several stories over the past year or two about Kayak’s robust ambitions to launch a lifestyle hotel business.  Kayak CEO and co-founder, Steve Hafner, recently confirmed the news first reported by Skift, that Kayak late last year shuttered its lifestyle hotels business (laying off its development team in the process).  Hotels currently operating under the “Kayak” brand will drop the name as leases for those hotels expire.  Notwithstanding the change in direction, Kayak still plans to build out a hotel technology business, leveraging its ongoing relationship with hotel operator, Life House. 

This week’s Update features an important update from my partner Eryn Hoerster on recently proposed federal legislation designed to reign in alleged drip pricing abuses.  Readers of our Update know that we’ve featured several stories over the past year detailing efforts at the federal and state level to address these so-called junk fees, including efforts at the FTC, state enforcement efforts and proposed state legislation (by both Republicans and Democrats).  Expect many more stories on this evolving issue in the months ahead.  Enjoy.

• • Senators Introduce The Junk Fee Prevention Act.  On March 23, 2023, Senators Richard Blumenthal (D-CT) and Sheldon Whitehouse (D-RI) introduced federal legislation seeking to eliminate “excessive, hidden and unnecessary fees” (including hotel resort fees)  that are imposed on consumers.  Details of the bill are available in Eryn’s update below.  Fortunately, as drafted, the bill targets not only hoteliers, but also third parties that advertise rates for short-term lodging (i.e., OTAs).
    
    
  • Adaptive Content to Redesign Booking.com Search Results.  In an interview last week at Skift’s Future of Lodging Forum, Booking.com’s Senior Vice President and Chief Technology Offer, Rob Francis, offered attendees a glimpse of changes that might be coming to the OTA via the introduction of ChatGBT or other similar AI technologies.  According to Francis, this new technology will allow the platform to deliver search results reflective of the type of user doing the search and the user’s intent (versus one or more potentially misleading search terms).  Francis believes that Booking.com will have a distinct advantage against its competitors in leveraging these new AI tools given its long history with AI and dedicated AI work force. 
    
    
  • American Airlines Forces Adoption of NDC.  What better way to get travel agents to embrace your new preferred connectivity solution than limiting certain (preferred) content to only that solution?  On April 3, American Airlines moves forward with its controversial plan to make certain content available only through NDC connections.  While agents may still view these preferred fares via their legacy GDS connections,  agents will be forced to use an NDC connection to make the booking.