Duff on Hospitality Law

Good Sunday morning from Seattle . . .  Our Online Travel Update for the week ending Friday, February 28, 2025, is below. This week’s Update features a variety of stories from a variety of sources, including some new sources. It is often easy to rely on the industry pillars – Phocus Wire and Skift – both of which do an amazing job of covering the travel world. As our Update continues to evolve, we will continue to look for new sources, new perspectives and new opinions on the stories we believe are most relevant to our readers, including a few perspectives from resources in my own backyard here in Seattle.   

For those of you interested, we are attaching a copy of the transcript from Tripadvisor’s recent earnings release call.  As I noted in last week’s Update, Tripadvisor CEO, Matt Goldberg, used the call to share some interesting details on Tripadvisor’s recently announced partnership with generative AI platform, Perplexity, as well as its collaborations with other AI platforms. 

Enjoy.

• • Another Year and Another Record Broken on Annual OTA Marketing Investments.  Every year we seem to feature the same story.  Another year and another OTA annual marketing spend record is broken.  According to recent financial reporting, Trip.com, Airbnb, Booking Holdings and Expedia Group spent a combined $17.8 billion on marketing during 2024, an increase of a billion dollars over 2023 amounts. 
    
    
  • Amazon Unveils Alexa+.  This past week, Amazon unveiled its latest iteration of its well-known voice assistant, Alexa.  Alexa+ combines the voice assistant with, you guessed it, generative AI, to produce “free flowing conversations.”  Although the many demonstrations circulated online (as least those that I saw) did not feature travel (they did include booking online restaurant reservations), Amazon claims that the new AI enabled assistant will be able to book travel for users and announced that it was launching the new service with travel partners, Booking Holdings, TripAdvisor, Uber and Fodor’s.  The service will start rolling out across the U.S. in the weeks ahead and Amazon Prime members will receive free access to the new assistant.

• • AH&LA Supports Re-Introduction of Federal Junk Fees Legislation.  This past week saw the re-introduction of junk fees legislation in both the U.S. House and Senate.  AH&LA issued statements supporting the legislation.  You may ask why federal legislation is needed at this point with the FTC’s junk fees rule is scheduled to take effect in May.  In one word, pre-emption.  The FTC’s rule does not pre-empt similar junk fee efforts at the state level and allows states to freely adopt their own more restrictive (and often inconsistent) rules. 
    
    
  • Will the EU’s Digital Markets Act (DMA) and Digital Services Act (DSA) Be Enforced Against U.S. Companies?  The last few stories in this week’s Update focuses on questions arising in Washington D.C. among President Trump and Republican law makers regarding the EU’s allegedly “select” enforcement of the DMA and DSA against U.S. technology companies.  The effort gained momentum last week with President Trump’s issuance of a new Executive Order stating, among other things, that regulations (like the EU’s DMA and DSA) will “face scrutiny from the Administration,” and U.S. Representative Jim Jordan’s letter to EU Commissioner Teresa Ribera asking her to clarify the DMA’s rules. (In each case, echoing the concerns of U.S. tech companies designated under the DMA as “gatekeepers”).  These concerns come as the EU Commission is reportedly poised to issue fines against Google for its failure to comply with the DMA.  What does this mean for hoteliers hoping to see meaningful EU mandated changes from Booking.com?  Will the fear of retaliatory tariffs convince EU regulators to limit or prevent their enforcement of these new rules against U.S. companies like Booking Holdings?  Like so much these days, no one knows.

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 weekly Online Travel Update (my last for the next 3 months) for the week ending August 2, 2024, is below.   Last week was a busy week in the online travel industry with second quarter earnings releases, junk fee updates and important competition announcements in the EU and UK.  Enjoy.

• • Highlights From Booking Holdings Second Quarter Earnings Release.  I won’t go into financial details from this past quarter’s release (that’s for the far more qualified analysts), but I will note a couple of my takeaways from the recent earnings release call (see attached transcript).  First, a definite focus on loyalty (Booking.com’s Genius program) and the noted increase (15% increase YOY) in Genius benefits (aka discounts).  It wasn’t that many years ago that I recall CEO Glenn Fogel dismissing the need for a loyalty program.  I chuckled when Glenn described the best part of the program – Booking pays nothing for it (suppliers pay for it all).  Second, Glenn’s and CFO Ewout Steenbergen’s opening remarks and the following analyst questions completely ignored Booking.com’s ongoing regulatory challenges in the EU – the DMA, recent Spanish fines, pending investigation in Italy, etc.  Not a single question about the anticipated effects of these ongoing developments.  What?  Third, how little was said (other than Glenn’s general optimism about and support for the platform) about Booking Holdings’ B2B programs – Booking.com, Getaroom and Rocket Travel. 
    
    
  • Are We Closer to a National “Junk Fee” Standard?  It appears so, yes.  This past week saw the United States Senate Committee on Commerce, Science and Transportation give its approval to the Hotel Fees Transparency Act of 2023.  The bi-partisan bill now moves to the full Senate for consideration and a vote.  If approved, the Senate version of the bill would then be reconciled with the previously passed House version (which passed out of the House back in June) and forwarded to the President for signature.  Before passing out of the Senate Committee, the bill was amended (at the urging of the Travel Tech Association and its members) to add language providing distribution platforms limited protection (a presumption) in the event hoteliers fail to provide accurate junk fee information.
    
    
  • Spanish Authorities Levy Fine Against Booking.com.  Much of last week’s attention (and industry reports) was focused on the Spanish competition authorities’ decision to fine Booking.com £413.24 and to impose certain “behavioral” modifications for abusing its market position over the past 5 years.  The practices that led to the fine include (1) imposing direct channel rate parity obligations while reserving the right to unilaterally adjust booking prices, (2) providing hoteliers inadequate information about participating in Booking.com’s Preferred, Preferred Plus and Genius Programs and (3) using the total number of reservations as a factor in determining a hotel’s ranking on the platform.  The modifications imposed by the Spanish authority are intended to address the “abusive” behavior.  Booking.com intends to appeal the fine arguing that the DMA is the proper forum for raising and uniformly resolving these types of issues across the EU (and not on a state by state basis). 

I hope everyone enjoys the remainder of their summer.  See you again in the fall. 

Good Sunday morning from Seattle . . .  Our weekly Online Travel Update for the week ending Friday, July 26, 2024, is below. It was a relatively quiet week this past week in the online travel industry, at least until Google’s (not surprising) announcement. Enjoy.

• • Google Changes Direction Again. So much for those many sessions (including my own) at recent industry conferences regarding marketing in a post-cookie world . . . Google announced this past week that it is abandoning entirely its previously announced decision to end all use of third-party cookies. The announcement comes after multiple prior announcements by Google delaying the planned demise. So why the change?  While Google’s announcement didn’t go into great detail, previous delays by Google (particularly the most recent) have been attributed to ongoing regulatory review of Google’s planned alternative – the Privacy Sandbox – by both privacy and competition regulators.  So, what is next? Again, the announcement did not go into great detail, except to say that users will soon have a choice regarding their web browsing practices. Google’s proposed alternatives are now under review by regulators.
    
    
  • Booking.com Found to Have Unlawfully Scraped Airline Website. In a unanimous decision out of a Delaware federal court this past week, a jury found that Booking.com unlawfully scraped data from travel supplier (and sometimes instigator) Ryanair. Booking.com’s activities were found to violate the U.S. Computer Fraud and Abuse Act. While the damages awarded to Ryanair were nominal ($5,000), the decision should provide a basis for Ryanair (and possibly other travel suppliers) to pursue injunctive relief against future similar behavior. Booking.com plans to appeal the decision.

Have a great week.

Good Sunday morning from Seattle... Our weekly Online Travel Update for the week ending Friday, July 19, 2024, is below. This week’s Update features a variety of stories, including news on the latest fines to be levied on Booking.com. Enjoy.

• • Recent Prime Day Travel Offerings Re-Kindle Amazon Rumors.  Regular readers of our weekly Update will recall the multiple stories we’ve featured over the years regarding Amazon’s rumored Interest in travel. Hailing from Seattle (like Amazon), I am asked often about Amazon’s interests at industry events and conferences.  As we noted in last week’s Update, Amazon again this year featured a limited offering of travel services as part of its annual Prime Day sale. Unlike prior years, this year’s offerings enjoyed their own dedicated “Prime Day Travel Deals” website page. Is this the beginning of a dedicated effort in travel? Only time will tell. In my opinion, absent a major acquisition by Amazon of an existing industry player, Amazon will only continue to play on the industry sidelines for the foreseeable future. 
    
    
  • Kayak Adds Features to Its Business Booking Platform. As competition in the corporate / managed travel space continues to escalate (see last week’s story on Marriott’s latest offering), Kayak announced this past week improvements to its Kayak for Business platform.  Users of the business platform will now have access to certain airline offerings (via API integration) and use of payment functionality.  Participating airlines include American, United and Southwest. 
    
    
  • Hungry Levies Record Fine on Booking.com. The Hungarian Competition Authority (GVH) announced last week that it had imposed a record fine on Booking.com for its failure to promptly cease certain previously identified commercial violations. The fine arises out of proceedings that commenced in 2018 when the GVH questioned Booking.com’s commercial practices – misleading free cancellation promises, psychological sales tactics and inaccurate payment information. In some instances, Booking.com took over four years to implement the required changes.

Have a great week everyone. Only two Updates remain before my upcoming departure. 

Good Saturday afternoon from Manson, Washington...I hope everyone is enjoying their holiday week/weekend, at least those of you in the United States. Our weekly Online Travel Update for the week ending Friday, July 5, 2024, is below. As you can seek, it was a quiet week. Enjoy.

• • HOTREC Releases 2024 Distribution Study. European hospitality association (representing hotels, restaurants and cares), HOTREC, released its annual hotel distribution study this past week.  Key findings of the study include (i) over the past year, OTAs have increased their share of the European market by an average of 10% (while direct channel distribution has decreased), (ii) small hotels rely Most heavily on OTAs, (iii) Booking.com enjoys a 71% share of the European hotel market, while Expedia is far behind at 15% and (iv) OTAs undercut hoteliers’ rates in 4 of 10 use cases examined. The association is cautiously optimistic that Booking.com’s recent gatekeeper designation under the DMA will produce meaningful results for European hoteliers in the months ahead.  A complete copy of the 2024 study is linked to our story below.
    
    
  • Kayak Launches Premium SME Offering. Kayak for Business has announced the launch of a new premium offering targeting small and medium sized businesses.  The new offering includes group bookings, 24/7 agency support and access to negotiated corporate rates.  Users will pay a flat $20 per trip fee.  The service can also integrate with a variety of additional services, including expense management and duty of care providers. 

Good Sunday morning from somewhere over Colorado . . . Our weekly Online Travel Update for the week ending Friday, June 21, 2024, is below. It was another relatively quiet week in the online travel space, except, that is, if you are Booking.com (or its parent, Booking Holdings). It has been a tough couple of weeks for the large OTA. Enjoy

• • When All Other Strategies Fail. It has been a tough couple of weeks for Netherlands based Booking.com. As the fallout of Booking.com’s recent gatekeeper designation under the EU’s Digital Markets Act (DMA) continues to unfold (including this past week’s announcement that it was abandoning all parity provisions for European hotels), an exasperated Glenn Fogel had little left to say other than that the EU’s rules were “dumb.” I’m sure we’ve all had weeks like that.

Have a great week everyone. I look forward to seeing many of you at the HSMAI event in Charlotte this week.

It was a busy week in the online travel world as evidenced by the number of our stories. Enjoy.

• • Cruise Operators Prepare for Total Pricing.  The recent announcement by some of the largest cruise companies to provide passengers total pricing (inclusive of all fees) underscores the breadth of California’s recently enacted pricing transparency law.  It isn’t just hoteliers and ticket agencies that need to comply.  Rather than limiting this change to California (or more properly, California consumers), the cruise companies plan to rollout total pricing nationwide.  The announced changes will go into effect on July 1, 2024.
    
    
  • ADA Booking Accessibility Rules at Issue in Recently Announced Marriott Settlement.  Federal prosecutors in Colorado announced last week a landmark settlement with Marriott over the booking of accessible rooms across the Marriott portfolio.  At issue were Marriott hotels’ alleged failure to provide needed detail about ADA accessible hotel rooms and the inability (prior to October 2022) to guarantee an ADA accessible room through Expedia.  As part of the settlement, Marriott has agreed, among other things, to list all of its accessible rooms through its centralized booking system, to provide details about each accessible room, to make accessible rooms available through the largest online travel agents (Expedia and Booking.com) and to allow Marriott Bonvoy members to book accessible rooms with points. The Colorado settlement agreement (a copy of which is embedded in the attached Skift article) will likely serve as a baseline for future enforcement and compliance efforts (similar to Marriott’s settlement with Pennsylvania regarding mandatory fee disclosures).  I’d encourage everyone to read it. 
    
    
  • OTAs Make Push for Corporate Travelers.  It should come as no surprise to our readers that the largest online travel agents (those that historically have focused primarily on leisure segment) are making huge pushes to capture a portion of the corporate travel segment, particularly in the SMB arena.  This recent trend is on top of efforts by other platforms to build better managed travel platforms (booking, payment, expense management, loyalty program recognition) – in many instances bypassing legacy GDS connections. 
    
    
  • Advocate General Questions Necessity for Parity Provisions.  In a precursor to an expected decision by the EU’s highest court, Advocate General Anthony Michael Collins suggested that Booking.com may find it difficult to prove that its controversial parity provisions are “indispensable” and “proportionate” to it maintaining its economic viability and thus exempt from EU competition law.  The preliminary opinion stems from a Dutch court case brought by German hoteliers seeking damages for Booking.com’s use of the illegal (at least in Germany) parity provisions.  Also at issue in the case is the definition of the relevant market for purposes of assessing the disputed clauses.  According to the Advocate General, the market needs to be viewed from the eyes of hoteliers and consumers (and not necessarily the eyes of the distributor).  Although not binding on the EU court, the opinions of advocate generals are often followed. 

This week’s Update features a variety of stories – STRs, algorithm leaks and Hilton campgrounds (sort of):

• • Las Vegas Price-Fixing Case Is Appealed.  A few weeks ago we reported on a Nevada federal district court’s (second) dismissal of a class action case brought against Las Vegas’ hoteliers’ over their use of certain Cendyn revenue management tools.  Not surprisingly, the plaintiffs have now appealed the court’s dismissal to the Ninth Circuit, the first such appeal of the several algorithmic cases currently pending against hoteliers.  A decision by the appeals court is not expected until 2025.
    
    
  • Booking.com Focused on U.S. STRs.  When it comes to short term rentals (STR), European online travel agent Booking.com is now taking a U.S. first approach.  During the first quarter of 2024, STRs accounted for 36% of all bookings on the platform.  To appeal to U.S. consumers, Booking is particularly focused on payments, liability insurance and its damage policy.  Families (however defined) are making up a larger and larger portion of users interested in STR bookings.
    
    
  • Air France – KLM Again Delays Introduction of GDS Surcharges for TMCs.  Fourth time the charm?  Air France – KLM has announced a further delay in its planned introduction of a €21 surcharge for corporate bookings made via legacy GDSs.  Why the additional delay?  Perhaps a lesson learned from American Airlines aggressive approach?  According to the airline, the delay is needed to resolve “issues” and to “support our partners.”  Last summer the airline removed all short-haul flights from GDS channels, reserving those routes for NDC connections.
    
    
  • Hilton RVs Officially Launched.  This one is of personal interest.  Not actually “Hilton” RVs, but close.  Users of Hilton’s booking channels can now search and book accommodations (RVs, tents, etc.) at several AutoCamp locations (Yosemite, Russian River, Cape Code, Joshua Tree, etc.).  Hilton Honors members can also earn and redeem points for their AutoCamp stays.  Having been part of similar efforts in the last few years, I can only imagine the discussions within Hilton as it considered the effects of adding this new non-hotel inventory to its regular online offerings – OTAs, wholesalers, loyalty program, etc. 

American Airlines’ decision to soften its approach on distribution with travel agents and advisors garnered most of the industry’s attention this week.  Otherwise, the holiday week for many was relatively quiet.  Enjoy.

• • Another Quarter and Another Staggering Amount Spent on Sales and Marketing.  According to their first quarter financials, the “Big Four” online travel agents (Expedia Group, Booking Holdings, Airbnb and Trip.com Group) spent a staggering $4.08 billion in sales and marketing in the first quarter of this year (a 10% increase over the same period last year).  How do these amounts compare to companies outside the online travel industry?  In the first quarter, the Big Four outspent their industry counterparts by a factor of 4 – when measured as a percentage of overall revenue (9.2% vs. 37%).     
  • A Few More Carrots Than Sticks:  American Airlines’ About Face.  Facing cuts in its financial forecasts, American Airlines announced this past week that it was moderating its historically aggressive NDC rollout.  According to American CEO, Robert Isom, the airline’s financial misses were due, in part, to its misguided sales and distribution strategy.  Going forward, American will seek to incentivize agencies’ and advisors’ use of its NDC platform as opposed to penalizing those who don’t.  As part of its newly announced change, American is reversing one of the most controversial aspects of its NDC campaign, the withholding of American Advantage loyalty benefits on bookings made through non preferred NDC advisors.   
  • Travel Technology Association Holds Its First Policy & Innovation Showcase.  Members of the Travel Technology Association held its first Policy & Innovation Showcase this past week for members of Congress and the media.  Companies presenting and/or hosting this event included Sabre, Airbnb, Tripadvisor, Expedia, Booking Holdings, Amadeus, Travelport and Chase Travel Group.  Issues currently on the Association’s agenda include the reform of the Communications Decency Act (Section 230), the American Privacy Rights Act and ancillary fee transparency.  According to comments by Association CEO Laura Chadwick, all travel companies are becoming technology companies.