Duff on Hospitality Law

This week’s Update features a variety of topics, including Italy’s newly announced investigation of Booking.com, American’s ongoing battle with ASTA and Qantas’ new TMC portal:

• • Italy Launches Investigation of Booking.com.  Just weeks ago, Booking Holdings announced as part of its fourth quarterly earnings release that Spanish competition authorities were considering levying an unprecedented $530 million fine against its Booking.com platform.  Now, Italy is joining the fray.  On Friday, the Italian Competition Authority announced that it had opened an investigation into Booking.com and its alleged abuse of its dominant market position.  At issue are the alleged advantages given to hotels that participate in Booking’s Preferred Program in exchange for higher commissions and Booking’s automated price matching tool (the so-called “Booking Sponsored Benefit”).   According to the Authority, the two practices could have the effect of excluding competing online travel agents from the market.  The investigation was triggered by complaints from Italian hotel associations. 
  • ASTA Launches PR Campaign Against American Airlines.  As the war between ASTA (American Society of Travel Advisors) and American continues over American’s campaign to transition advisors to NDC (and thereby reduce overall distribution costs), ASTA has taken its position to lawmakers and the public via a new ad campaign and consumer-facing website.  New ads running in Politico direct readers to ASTA’s new website, which includes messages for both travelers and travel advisors and encourages both groups to contact their legislators.  Both sections also encourage a congressional investigation into American.   
  • Concur Travel Expands Hotel Offerings.  This past week Concur SAP announced that it was making several changes to its booking and travel management platform, Concur Travel.   The changes include expanded hotel content (via new integrations with Amex GBT, CWT, Flight Centre and HRS), rail content, emissions data (hotels, air, rail and rental car options) and itinerary sharing.  
  • Qantas Launches New TMC Booking Platform.  Travel management companies and agencies have a new platform (Qantas Distribution Platform) for booking Qantas flights using NDC content.  Access to the platform is limited to TMCs that have an existing commercial agreement with Qantas and are connected to one of Qantas certified technological partners, including Sabre, Travelport and Amadeus.  Users of the platform will have access to special offers, discount pricing and shopping capabilities not otherwise available through traditional channels.  According to the Qantas website, the new portal is best “suited for simple bookings” with complex customers and system requirements best supported through Qantas’ certified technology partners.  Sounds like a statement intended to calm Qantas’ legacy GDS partners’ concerns as Qantas seeks to move customers to a new alternative platform.

This week’s Update features a variety of topics including the latest on Indonesia’s efforts to regulate OTAs, Spotnana’s new “event” travel booking tool and new record marketing spending by the largest OTAs (no surprise).

• Booking.com and Expedia May Face Indonesian Bans.  As of this past week, several large OTAs (including Booking.com and Expedia) had still not complied with Indonesia’s requirement to register as Private Scope Electronic Systems Operators (PSE).  The requirement is part of a regulation passed in November 2020 that requires digital platforms to obtain licenses to operate in Indonesia.  Recently, Indonesia has stepped up enforcement efforts around the regulation including blocking PayPal and other gaming websites temporarily in 2022.  Earlier this month, the remaining unregistered travel booking platforms (Airbnb, Agoda, Expedia, Booking.com, Trivago and Klook) received letters from Indonesia’s Ministry of Communication and Information asking that the platforms complete their registration by the end of the month.  Airbnb and Agoda have since registered.
• Spotnana Releases “Spotnana Events,” a Group Travel Booking Tool.  Despite its name, Spotnana Events isn’t a meeting booking tool.  Users of the platform won’t be able to book meeting rooms and associated food and beverage.  Instead, the new corporate tool allows users – both profiled and, notably, unprofiled - to book travel that is tied to a particular event, event dates, event booking parameters, etc.  The new technology will be made available to both regular corporate users of the Spotnana travel management tool as well as standalone users.  The tool will also be made available to channel partners and as a white label solution.
• OTA Annual Sales and Marketing Records Are Broken, Again.  In 2023, Expedia Group, Booking Holdings, Airbnb and Trip.com spent collectively $16.8 billion in sales and marketing (which represents a 20% increase over their 2022 combined total).  Of the four, Trip.com saw the largest spending increase – increasing 2022 amounts by 117% (and roughly equally pre-pandemic amounts).  Not surprisingly, the two largest spenders were Expedia Group ($6.9 billion in sales and marketing (including B2B commissions under its growing B2B platform)) and Booking Holdings ($6.8 billion for marketing).  For Expedia, the amounts spent on sales and marketing equate to 54% of total revenue.  For Booking Holdings, its expenditures represent 32% of total revenue.

This week’s Update offers two differing industry perspectives on Google’s DMA compliance efforts.  We also update the status (demise) of TripAdvisor’s much criticized subscription program, TripAdvisor Plus.  Enjoy.

• • Perspectives on Google’s Gatekeeper Efforts.  This past week (March 7) saw D-Day arrive for those platforms designated as “gatekeepers” under the Digital Markets Act (DMA).  On the day before, EU Travel Tech, whose members include most major leisure and managed travel platforms, issued a letter to the European Commission criticizing Google’s changes and complaining that the changes continued to feature Google’s own products and services over those of its members.  According to the industry group, Google’s efforts “fall significant short of compliance, potentially rendering the new rules ineffective.”  At the same time, organizations representing hotels, airlines and restaurants issued their own statements, warning that the changes could drive users away from their members and to large online intermediaries (i.e., OTAs).  According to one statement, several of the industry’s groups could lose as much as 50% of their online traffic to intermediaries.  As it begins its review of the many changes proposed by Google and other gatekeepers (and considers possible enforcement efforts), the EU Commission will have some difficult decisions to make. 
  • TripAdvisor’s Latest.  A few weeks ago we included a story detailing the steps taken by TripAdvisor to evaluate possible future transactions.  This past week, we learned that TripAdvisor’s first possible suitor is John Malone’s Apollo Global Management, a private equity firm with a long history in the travel world (Expedia, AmexGBT, Oceania, Norwegian Cruise Lines and Diamond Resorts).  Last week also marked the official demise of TripAdvisor’s subscription program, TripAdvisor Plus.  Readers of our Update will recall the many stories featured over the past few years (the subscription service was  made widely available in June 2021) detailing the program and suppliers’ (and my) general poor view of the program. 

This week’s Update features a wide variety of topics – Hopper, Capital One vacation rentals, Expedia layoffs and Hilton campgrounds.

• • AirAsia Adds Cancel for Any Reason.  AirAsia announced this past week that users of its platform (both website and application) can now cancel bookings of non-refundable fares through an integration with Hopper’s B2B Division – HTS (Hopper Technology Solutions).  HTS offers a wide variety of ancillary products and services (e.g., travel portals, fintech products) to its corporate users.  AirAsia currently offers flights from over 700 airlines.  With the addition of HTS’ ancillary cancellation product, fares that were once non-refundable (presumably a material term or condition of each airline’s offered fare) are now fully cancelable for any or no reason.  It would be interesting to know how these now “fully cancelable” fares offered through AirAsia comport with each effected airline’s own terms and conditions and those of any applicable distribution agreement.  
  • Capital One Adds Vacation Rentals.  Capital One announced last week that its Capital One Travel portal will soon feature vacation rentals from AvantStay, Boutiq and other property management companies (including eventually, Inspirato).  The rentals will be part of Capital One’s “premium” hospitality offerings. 
  • Quantas Offers Price Guarantee to Drive Platform Bookings.  A lot can be learned from the airline industry. Quantas has announced a new price guarantee that guarantees fares for up to five days when travel agents book through Quantas’ own distribution platform.  The guarantee is one of the first for the airline industry (and the only offered by an Australia or New Zealand airline).     
  • Hilton Campgrounds Coming Soon.  So why include a story about Hilton’s newly announced partnership with campground operator, Autocamp?  According to the recent announcement, Autocamp’s Airstreams, cabins and tents will soon be bookable on Hilton’s direct channels – presumably call centers, website, mobile application, etc.  It will be interesting to watch how Hilton and its channels (which until now have featured primarily traditional hotel products) will treat these very untraditional products.  It will also be interesting to see how long it takes these new products to make their way to large third-party channels (whether unintentionally through existing parity commitments or intentionally), if at all.    
  • Google’s DMA Changes Continue to Draw Criticism.  Review site Yelp is the latest to raise concerns with Google’s planned search results changes for flights, trains, hotels and restaurants in the EU.  According to Yelp, the proposed changes, which are required to help smaller companies gain more traffic from Google, are having the opposite effect (driving users to Google products).