Duff on Hospitality Law

This week’s Update features a variety of stories, including updates on airlines’ continuing efforts to move away from traditional distribution systems (GDS) and a review of 2023’s booking trends. For those of you interested, I’ve also included the slides from my presentation at HEDNA in New Orleans last month.

• • American Seeks to Move All Bookings to the Internet.  During last week’s quarterly earnings call, American Airlines’ Chief Commercial Officer, Vasu Raja, made clear American’s plans for the future – “We sell our product through the internet.”  American appears to be making great progress toward its goal with 80% of fourth quarter bookings coming through the airlines’ website, app or via NDC.  More importantly, when compared to results from 2019, the airline is up in revenue (15%) and down in selling expenses (8%- 9%).  Travelers who book their American Airlines travel through the internet will also benefit with greater loyalty program mileage and better servicing. 

• • New “Junk Fee” Settlements Announced by Nebraska Attorney General.  Nebraska Attorney General, Mike Hilgers, announced a new settlement agreement regarding mandatory fees with Hilton Hotels, adding Hilton to the list of recent settlements with Marriott, Omni and Choice.  The newly announced settlement requires Hilton to “prominently” display total price (rate plus any mandatory hotel fees) on the first page of the Hilton website and when searching and sorting by price.  Hilton also agreed to pay $300,000 in attorneys’ fees and costs.

• • EU Court Publishes Grounds for Booking’s Appeal of EU Commission’s eTraveli Decision.  The EU court hearing Booking Holdings’ appeal of the EU Commission’s decision to block Booking’s planned purchase of eTraveli published this past week Booking’s asserted grounds for overturning the decision.  Among its many claims, Booking asserts that the Commissions’ concerns over the proposed transaction’s effects on competition within the online travel industry (most notably accommodations) contained significant and obvious errors, including (a) overstating the impact of the proposed transaction, (b) miscalculating Booking’s incremental market share growth resulting from the transaction and (c) mischaracterizing Booking’s commissions and room rates.  We will continue to update our readers as this much watched case proceeds. 

• • Series of Recent Reports Confirm Industry’s Rebound in 2023.  Three separate reports released last week by SiteMinder, MEWS and SHR Group provided interesting insight into the industry’s prior year performance.  Highlights from the reports include (a) Booking.com remains the most popular bookings channel in most international markets, with Expedia or Agoda (depending on the market) in second and direct bookings in third, (b) although direct bookings remained strong during the year, one study found that hotels’ share of bookings through direct channels (excluding group, wholesale or contract bookings) actually fell, (c) booking windows have increased (in large part due to growing international travel), (d) more North American hotels are monetizing their non-hotel room spaces (parking and meeting rooms) and (e) the return of international travel is largely the result of growing outbound Asian travel.