Duff on Hospitality Law

With many in the industry getting their first look at Google’s proposed “DMA” changes to European Union search results, many of this past week’s industry headlines were focused on the proposed changes and the industry’s generally unfavorable response.

• • Increased Marketing Efforts by OTAs Result in Fewer Direct Bookings.  In a report issued last week by SHR Group, the hospitality industry technology specialist reports that increased marketing investments by OTAs have begun to shift the share of bookings away from direct channels to indirect channels, have driven higher the costs of brand key word bidding (particularly on meta search sites where costs increased by over 128%) and have increased OTAs’ share of total room nights (largely through OTAs generating longer lengths of stay).   
  • First Impressions of Google’s Proposed DMA Changes to Search.  With the Digital Market Act’s (DMA’s) ban on self-preferencing by so-called “Gatekeepers” set to take effect in early March (March 7), Google has begun rolling out on a limited test basis proposed changes to its EU search results for flights.  The responses have been less than flattering.  Leading the opposition to the proposed changes is online travel platform eDreams Odigeo, which has made quite clear that it believes the proposed changes do not go far enough and warrant enforcement efforts by EU authorities.  eDreams’ concerns have been echoed by other industry groups, including eu travel tech and EU Tech Alliance, which have largely focused on Google’s alleged failure to effectively engage with industry members before moving forward with the changes.  While most of eDreams’ complaints are focused on flights, it claims that similar concerns also apply to the proposed changes for hotels and activities / experiences.  I expect that we may hear from hoteliers soon. 
  • Still Suffering from Rogue Wholesalers’ Abusive Use of Rates and Inventory?  Expedia’s Peter Kern Has a Simple Solution.  Peter’s proposed solution?  Take the issue seriously.  That’s it.  Simple, right?  Speaking at the lodging industry’s annual investment conference, ALIS, Peter Kern (first OTA CEO ever to speak at the long-standing industry conference) expressed surprise that independent and regional hoteliers (noting that many large hoteliers have tackled the problem through solutions offered by Expedia – a plug for Expedia’s wholesale distribution program (Optimized Distribution)) don’t take the issue seriously.  If only it were that easy Mr. Kern.