Duff on Hospitality Law

Hopper Focuses on Hotel Bookings
("Hopper ramps up hotel booking with global private rates and price tracking," Phocus Wire on Jun 20, 2019 
Over the past few years, we have featured a number of stories about Hopper and its many successes – though primarily in airline bookings.  Now, Hopper is seeking to leverage some of that success in its pursuit of hotel bookings.  Hopper currently features over 270,000 hotels worldwide and sources rooms from those hotels through both intermediaries and direct supplier relationships.  Armed with its price predictive technology, Hopper claims to be able to provide users accurate rate forecasts for the hotels it features as well as unique “private” rates that are otherwise unavailable.  Unlike typical booking channels, which generally promote and market their offerings broadly, Hopper derives 90% of its bookings through personalized “private” push notifications that are powered by Hopper’s personalization AI.

The latest OTA & Travel Distribution Update features a number of stories highlighting ongoing or recently resolved regulatory complaints or investigations.  Enjoy.

Nustay Seeks EU Regulatory Review
("Expedia, Booking.com targeted in EU antitrust complaint by Nustay," MLex Insight, June 11, 2019) 
Dutch booking platform, Nustay, filed a complaint last week with the European Commission alleging that the practices of Expedia and Booking.com illegally restrict competition in the market.  The alleged practices at issue include imposing severe consequences (e.g., reducing a hotel’s ranking or transferring the hotel to Booking.basic (Booking.com only)) on hoteliers that seek to offer more competitive prices through alternative (including Nustay) channels, which Nustay alleges, constitutes enforcement of a “new type” of wide parity requirement.

This week’s Update features an important story on possible changes to keyword contracting practices (or at least a new argument as to why existing practices are no longer appropriate).  Enjoy.

Dutch Authorities Scrutinize Keyword Restrictions
("Booking.com and peers may face Dutch scrutiny of ad deals with hotel chains," MLex Insight, June 7, 2019)
In a study issued last week, the Dutch Authority for Consumers and Markets examined hotel booking platforms’ (Agoda, Booking.com, Expedia and others) practice of agreeing contractually with hoteliers not to post advertisements in response to searches featuring the hoteliers’ keywords (i.e. keyword restrictions).  According to the Authority, such restrictions are likely to lead to higher prices on websites, which ultimately harms consumers.  Although the study did not identify plans for a formal investigation or recommend sanctions, those of you seeking keyword restrictions (or seeking amendments to existing restrictions) should expect to hear a lot about this.

Airbnb Begins Integration of Traditional Lodging Products
("Airbnb Tests Hotel Integration by Adding Some HotelTonight Partners," Skift Travel News, May 29, 2019) 
As a critical first step in its integration of the newly acquired HotelTonight, Airbnb has begun adding limited hotel inventory from some of HotelTonight’s hotel partners.  At the same time, Airbnb has eliminated guest fees on new hotel listings (making the site more competitive with the host-only fee models of Booking.com and Expedia) and begun cross promoting its hotel inventory on both the Airbnb and HotelTonight platforms.  Although full integration of the HotelTonight inventory on the Airbnb platform will take time (and require the platforms to reconcile their many differences), many believe it is only a matter of time before the former exclusively alternative accommodation platform transforms itself into fully fledged online distribution channel.  Only time will tell...

Booking.com Amends Its Commission Policies
("Booking to Charge Commission on Resort Fees in Major Shakeup for Hotel Revenue," Skift Travel News, May 20, 2019)
Although it was a relatively quiet week in the distribution world (at least in terms of the number of noteworthy stories), this first story garnered a lot of attention and deservedly so. We had heard rumblings over the past few weeks that Booking.com was notifying hotels of its plans to charge commissions on hotels’ resort fees and other guest charges (e.g., Wi-Fi charges) irrespective of whether Booking.com or the hotels collect the charges. These rumblings became a reality as the many usual outlets began featuring articles detailing Booking.com’s plans. According to these reports, US hoteliers should see the additional commission charges beginning in June. Hoteliers need to review their contracts carefully to determine whether this unprecedented move is contractually permitted.

The week’s stories remind us how quickly things continue to change in the distribution landscape. Enjoy.

State Attorneys General Exploring Alleged Anti-Trust Violations
("U.S. state AGs looking into Expedia Group, hotel practices in antitrust probe," Reuters Company news, May 9, 2019) 
News of state attorneys generals’ investigation into hoteliers’ online practices has made headlines these past two weeks. Initiated by the Utah state attorney general in 2017 (and now involving an unidentified number of additional state attorneys general), the ongoing investigation is centered on hoteliers’ alleged agreement to not bid on each other’s keywords (the same claims made by Travelpass in its pending Texas litigation).

This week features another travel-shortened OTA & Travel Distribution Update. We will return with our regular format next week.

Booking.com wins Swedish court appeal on contract terms with hotels
MLex Insight on May 9, 2019 (subscription required)
Booking.com has overturned a Swedish ruling that ordered it to change its contract terms with hotels. The Stockholm Court of Appeal ruled today that the Dutch company was not in breach of competition rules, annulling a decision made last July by a lower competition court. Today's decision can't be appealed further.

Expedia Under Investigation by Utah Over Hotel Collusion Claims
Bloomberg Quint - Stories on May 9, 2019
Expedia Group Inc. is under investigation by the Utah attorney general for allegedly conspiring with the biggest U.S. hotel chains to suppress competition in online travel booking. The office is investigating whether Expedia conspired with Marriott International Inc., Hilton Worldwide Holdings Inc. and other hotel companies to manipulate.

Misleading online ads and EU dual-pricing ban scrutinized by Dutch Authority
Bloomberg Quint - Stories on May 9, 2019 (subscription required)
Companies conveying a false impression of scarcity to consumers could face more regulations in the Netherlands, the head of the Dutch Competition said.

New Hotel Booking Platform Centers on Sustainable Travel
Lodging Magazine on May 8, 2019
Not-for-profit hotel association Bee + Hive is launching a new booking platform centered around hotels that offer sustainable travel experiences. Guests that want to travel responsibly and adventure while on vacation can plan a trip based on activities, locations, and sustainable resources.

While Marriott’s entrance into the vacation rental business garnered most of the attention this week (we’ve included one of the many stories written this week about Marriott’s move), a few other stories warranted inclusion in this week’s Update.

We’ll be back with our usual format next week.

This week’s Update features a story on an issue – OTA cancellations – that we’ve been hearing a lot about recently. Enjoy.

Further Details Emerge on Japanese Regulators’ Investigation into Rate Parity
("Comment: Booking.com, Expedia and Rakuten in Japanese regulator's sights over price-parity requirements," MLex Insight, April 22, 2019) (subscription required)
In a follow up to a story we featured a few weeks ago, this past week more details (and speculation) emerged about the recent raids by the Japan Fair Trade Commission (JFTC) of Expedia, Booking.com and Rakutan. According to reports, the Japanese investigation is likely to focus on both broad parity (indirect and direct channel parity) and so-called “narrow” parity (direct channel parity only), which was widely used by Expedia and Booking.com as a compromise to satisfy EU regulators’ concerns regarding the OTAs’ rate parity practices several years ago. Japanese regulators have allegedly questioned whether the “narrow” parity compromise truly solves the anti-competitive effects of rate parity. If the results of the JFTC’s investigation into Amazon and its pricing parity practices from several years ago offers any indication as to how this newest investigation might turn out, hoteliers may soon find themselves free of rate parity (indirect and direct) throughout Japan. More to come . . .

This week’s Update features a number of stories on important developments in the EU. Enjoy. 

Sabre’s Previously Announced Acquisition Runs Into Regulatory Trouble
("Sabre's Farelogix purchase draws 'killer acquisition' questions from UK watchdog," MLex Insight, April 19, 2019) (subscription required)
Several months ago, we featured a story detailing the evolution of the airline distribution industry and in particular, the growing rivalry between legacy (read: old) global distribution systems (like Sabre) and airlines they serve over airlines’ attempts to bypass the global distribution systems through the use of emerging technologies (like the new distribution capability (NDC) offered through Farelogix). In a somewhat ironic move, Sabre announced plans in November of last year to acquire Farelogix for $360 million. The US Department of Justice and now the UK’s Competition and Markets Authority (and possibly other EU regulators) have begun to ask questions about the proposed deal and its potentially stifling effects on competition within the distribution industry (aka “killer acquisition”). There are many potential lessons to be learned here for the distribution industry generally, which is why we will continue to feature stories updating the status of Sabre’s efforts.