Duff on Hospitality Law

We’ve found fall to be the busiest of all seasons in the online travel world as everyone returns to work from summer breaks and the dates of the major online travel conferences are fast approaching.  As you can see from the long list of stories in this week’s Update this fall is no different.

• • Resort Fee Updates.  Perhaps the biggest news this past week was out of California where previously discussed California legislation has made it to the California governor’s desk for signature.  Whether Governor Newsom will sign one or both of the new bills remains to be seen.  Under the California legislation, it would be illegal to display a rate (or pricing generally) without including all mandatory fees and charges (excluding taxes).  The legislation would apply to both hoteliers and online platforms and would require the display of total price to both listings (for properties wherever they may be) shown to travelers in CA and CA listings shown to those outside CA (which, practically, like in so many other contexts, will cause most hoteliers and platforms to convert to total price everywhere).  Governor Newsome has until October 14 to sign or veto the bills.  If the governor does nothing, both would become law by default.  Other resort fee updates from this past week include Hilton’s announced transition to displaying mandatory fees up front (exactly what that means remains to be seen).  Hilton’s announcement, like so many others, encouraged uniform treatment among hoteliers and their online platform counterparts.  Also making news was Choice’s announced settlement with state attorneys general in Pennsylvania, Colorado, Nebraska and Oregon.  Under the settlement, Choice has agreed to move to total price by the end of 2023.
    
    
  • Booking.com to Launch U.S. Credit Card.  Many of last week’s online travel headlines focused on Booking.com’s “leaked” plans to launch a U.S. co-branded credit card.  No one should be surprised by this announcement, particularly those that have spent any time considering the pros and cons of embracing Booking’s payment platform.  Booking.com’s financial partner for the card is unknown.  With the launch of a co-branded credit card, Booking.com will be better positioned to leverage the many opportunities associated with its payment platforms include traveler credits, rebates and other traveler benefits. 
    
    
  • MakeMyTrip’s Corporate Booking Platform Making Progress.  While much of the attention regarding new corporate travel platforms goes to the larger, more established platforms, MakeMyTrip’s corporate platform, MyBiz, has been quietly recording successes.  With a goal to automate users’ entire booking process (through generative AI and other technologies), the Indian platform now offers foreign and domestic flights, hotels, trains and cabs.  In its four years of existence, the platform has already grown to over 50,000 users.

This week’s update includes a variety of stories, including an explanation by the UK’s CMA as to why it viewed the proposed Booking Holdings and eTraveli merger differently than its European competition counterparts. Highlights:

• • CMA Explains Differences with European Counterparts Over eTraveli Merger.  As our readers will likely recall, the UK’s competition authority (the Competition and Markets Authority) previously approved the planned merger of Booking Holdings and eTraveli, while its European counterparts at the EU Commission are rumored to be vetoing the merger.  According to a chief economic advisor at the CMA, the divergent outcomes are the result of different authorities faced with different facts and different consumers.  Speaking more broadly, the advisor added that the Booking / eTraveli merger generated “ecosystem” concerns (i.e., largely undefined concerns that a technology platform and its many interconnected businesses become entrenched and ultimately harm innovation and competition).  In short (my two cents), the CMA’s differing view of these so-called “ecosystem” concerns led to it reaching a different outcome. 
    
    
  • Credit Card Travel Platforms:  A Quick Overview.  For those of you seeking a summary of the credit card travel platforms (and their attributes) currently available (platforms we’ve covered in several posts the past year or two), the attached story from Forbes provides a helpful overview. 
    
    
  • Kayak’s Shift to Corporate Travel.  Since Kayak’s release of “Kayak for Business” in the summer of 2021, over 30,000 small and medium businesses have used Kayak’s booking tool.  But Kayak’s aspirations don’t end there.  Kayak is now targeting large corporate clients.  With its partner Blockskye (a blockchain-based startup), Kayak has been developing and testing an enterprise solution with PwC.  Since last fall (2022), the Kayak enterprise solution has processed more than 400,000 bookings for PwC’s 65,000+ employees in the United States.  According to Kayak CEO, Steve Hafner, the goal of the new solution is multifold – disintermediate traditional GDSs (via NDC), “stick it to the credit card companies” (via direct payment solutions) and take on existing (disfavored) market legacies – American Express GBT and Concur (through a better overall solution).  It will be interesting to watch how these legacy corporate platforms – including Amex GBT and Concur – respond to this newest corporate offering.  More to come. 
    
    
  • Booking.com Partners with Affirm.  Wait.  What?  Among the many potential benefits or detriments (depending on your perspective) of Booking.com’s much lauded payments platform is the ability to offer guests a variety of consumer friendly fintech products, products offered through Booking Holdings’ fintech business.  With its recently announced partnership with Booking.com, Affirm can now boast that it powers the consumer financing options (BNPL) for the two largest online travel platforms - Expedia and Booking.com.  Affirm also powers consumer financing options for other Booking Holdings’ companies – Agoda, Priceline and Kayak.  I have to admit, I’m a little confused.  If Booking Holdings is making huge commitments to create its own fintech unit, why partner with Affirm?  Change of direction?  Temporary solution?  Learning opportunity for Booking?  Perhaps a realization that creating your own platform (build) is far more difficult (and costly) than partnering (buy)? 

This week features a heavy dose of Booking Holdings’ updates, including updates on the story we featured last week regarding Hungary’s recent decision to launch a formal investigation into the country’s online travel industry.  Enjoy.

• • AI Trip Planners Are Everywhere.  While we all have read stories detailing the major booking platforms’ adoption of generative AI for trip planning (some of those stories have been featured in our weekly Update), smaller AI powered niche planners are now popping up everywhere.  This past week, Skift featured three new planners – Troupe (short term rentals), GenixGPT (“hidden gems”) and JetAI (private plane charters).  What’s obvious is that not all of these planners will make it - fall out is inevitable.  What will be interesting to watch is how many, if any, will be acquired by the major booking platforms.
    
    
  • Booking.com’s Payment Delays – Part II.  Last week we featured a story detailing the decision by the Hungarian competition authority to open an investigation into the country’s online travel booking industry, driven in large part by Hungarian hoteliers’ multiple complaints regarding delayed payments (room rate less commission) via Booking.com’s payments platform.  Apparently, the problem was a little more widespread than just Hungary (affecting hoteliers throughout Asia), may have dated as far back as April of this year (and continued through the heavy tourist seasons for many) and may have even affected commission payments to members of Booking’s affiliate network (though Booking claims these delays were part of planned maintenance of its systems).  Meanwhile, back in Hungary, Hungarian officials raided the Budapest offices of Booking.com on Wednesday (September 6) as part of its ongoing industry investigation.   

This past week (the unofficial end to summer for many of you) was a relatively busy one in the world of online travel. Highlights include:

• • EU (Unofficially) Kills Booking Holdings’ Planned Purchase of eTraveli.  For weeks now, we’ve been providing updates on Booking Holdings’ planned purchase of air booking platform, eTraveli.  While the European Commission has until September 27 to issue its final ruling, sources indicated late last week that the Commission was prepared to veto the purchase.  Sources close to Booking have stated that Booking plans to appeal any final veto.
    
    
  • Add Sonesta to the List of U.S. Hotel Companies Being Sued Over Resort Fees.  Last week Hyatt, this week Sonesta.  According to Travelers United, the consumer advocacy group that brought both the Hyatt and Sonesta class actions claims, more lawsuits against more companies are coming.  This latest suit against Sonesta focuses both on Sonesta’s alleged failure to provide total pricing (rate and mandatory fees) early in the booking process and Sonesta’s combination of taxes and fees in later disclosures.  As the list of hoteliers implementing total price on their websites and mobile applications grow (see additional story on Hyatt, Marriott and MGM changes), it will be interesting to see how these lawsuits evolve. 
    
    
  • Delayed Payments Leads to Hungarian Investigation of Online Booking Industry.  Last week, Hungary’s Competition Authority announced the launch of an accelerated inquiry into the online booking industry, and in particular, whether competition among industry members may have been distorted by Booking.com’s payment platform’s delayed payments to accommodation providers.  According to local news stories, Booking.com was several weeks delayed in making payment to multiple accommodation providers in the month of July – after announcing and then missing a series of promised payment deadlines.  July payments were ultimately made by mid-August.  The largely unexplained delay resulted in 28 complaints being made to the Competition Authority alleging the wrongful withholding of fees.