Duff on Hospitality Law

Two Airlines: Two Very Different Perspectives on Distribution
(“Southwest Airlines Expands Booking Access and Content in the GDS to Reach More Business Travelers,” Skift on May 19, 2020, “Sabre and Lufthansa are at an impasse,” May 21, 2020 via travelweekly.com)
Stories released last week provided two very different perspectives on airline distribution. On one hand, the maverick: Long-time outsider to traditional distribution channels, Southwest, is continuing its efforts to improve its corporate booking opportunities by providing the majority of its content and booking functionality on the three major global distribution systems – Amadeus, Travelport and Sabre. The move, coming after nearly 50 years of operation and distribution largely through its proprietary corporate booking channel, is seen by many in the industry as better positioning the airline for the inevitable return of corporate travel post pandemic. On the other hand, the traditionalist: Long-time GDS participant, Lufthansa Group (parent to Lufthansa and other European airlines), notified travel agents last week that Sabre had terminated the airlines’ distribution agreement. The termination is seen by many as a culmination of the parties’ yearslong distribution dispute and a possible seismic shift away (aided perhaps by the pandemic and resulting industry-wide reset) from traditional distribution channels (GDS) to newer distribution technologies – like The International Air Transport Association (IATA)’s New Distribution Capability (NDC). Who is right?Let the debate begin.

Facebook and Instagram Launch New Retail Storefronts
(“Facebook and Instagram roll out Shops, turning business profiles into storefronts,” May 19, 2020 via TechCrunch)
Seeking to capitalize on e-commerce’s explosive growth these past weeks and months, last week, Facebook and Instagram announced a new functionality that will allow users of the two platforms to purchase goods and services directly from a business’s Facebook Page or Instagram profile without leaving the platforms. Nearly a million businesses have already signed up to be part of the initial test of the new functionality. According to Facebook, participating businesses will pay a small fee for transactions completed through the platforms. This presents yet another distribution channel opportunity for travel industry members… 

Parity Update: Australia and South Korea
(“Platforms including Booking.com, Expedia still enforce parity clauses, Australian hotels say,” May 23, 2020, “Antitrust decision against Booking.com to change its no-refund policy overturned by Seoul High Court,” May 20, 2020, “Expedia contacted by South Korean regulator in February over contracts with local hotels,” May 23, 2020 via MLEX Insight)
Another Update with more reports on parity with two that came out of South Korean and Australia last week. Booking.com scored a victory in South Korea as the Seoul High Court overturned a February 12, 2019 corrective order from the Korea Free Trade Commission (KFTC) requiring Booking.com to amend its no refund cancellation policy. Additional news involving the KFTC was contained in Expedia’s first quarter earnings report where Expedia disclosed that in February, it had been contacted by the KFTC over its rate parity contracting practices with South Korean hotels.  And finally, in Australia, hoteliers have taken their concerns over OTAs’ practices to the Australian Competition & Consumer Commission, arguing that programs such as Booking.com’s Booking.Basic allow the OTAs to circumvent the limits (and supposed pro-competitive benefits) associated with the previously agreed “narrow” approach to rate parity. 

Weird (Beltless) Trivago Guy May Be Returning
(“Back to the Future: Trivago Shifts Strategy With Plans to Return to Bigger TV Ad Push,” May 18, 2020 via Skift)
That’s all I can really say about this story. 

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