Duff on Hospitality Law

This week’s Update covers a variety of topics, including persistent rumors regarding a possible Sabre sale and proposed new federal regulations governing airline fee disclosures that may one day serve as a foundation for similar regulations for hotels. Enjoy.

Rumors Around a Possible Sabre Sale Persist
(“Sabre Quietly Looks to Shed Hotel Software Unit,” September 28, 2022 via Skift) (subscription may be required)
Last week we featured a story detailing discussions from earlier this year regarding a possible sale by Sabre of its hotel software business. According to Skift, the source of last week’s story, prospects of such a sale has largely diminished. This past week, Skift, doubled down on the previously reported Sabre rumors, noting that six industry professionals had anonymously shared rumors of the possible Sabre sale with Skift since June.

This week’s Update features several stories detailing a recent report by the U.S. Consumer Financial Protection Bureau (CFPB) regarding mounting consumer credit concerns with buy now, pay later credit products. The CFPB report can be found here.

Here Come the Regulators
(“Buy Now, Pay Later: Market Trends and Consumer Impacts,” September 15, 2022 via Consumer Financial Protection Bureau)
(“’'Buy Now, Pay Later' Lenders to Be Subject to Same U.S. Oversight as Credit Card Companies,” September 15, 2022 via MLex) (subscription may be required)
Given the meteoric rise of buy now, pay later (BNPL) products, it shouldn’t be that surprising that the consumer financing method is now garnering the attention of U.S. regulators. Last week, the CFPB issued a report on the consumer impacts of BNPL, suggesting that lenders providing these vehicles merit regulation similar to that governing credit card companies. Key takeaways from the report include the following:

• • The five firms surveyed for the report originated 180 million BNPL loans totaling $24 billion in 2021 (a near 10-fold increase over 2019 levels)
  • Loan approval rates are rising (over 73 percent of applicants were approved in 2021)
  • Late fees are becoming more common (over 10 percent of borrowers were charged a late fee in 2021)
  • Identified areas of potential consumer harm arising from these products include (i) inconsistent consumer protections, (ii) borrower data harvesting and (iii) the most obvious, borrower debt accumulation and overextension

This week’s Update includes stories on fintech’s continued growth and rumors regarding Sabre’s possible future. I hope you enjoy.

More Platforms Turning to Fintech Products to Foster Growth
(“Ixigo, Amadeus Latest to Add New Fintech and Payment Options,” September 16, 2022 via Phocus Wire)
Indian travel app, Ixigo, and Amadeus both recently announced plans to adopt new payment tools to their booking platforms. Travelers booking air travel on Ixigo will now be given the opportunity to purchase “flexible” tickets that allow travelers to change their flight (dates of travel, airline and destination) and pay only the difference in fares. This new tool, Ixigo Flex, will supplement Ixigo’s current offering, Ixigo Assured, which allows travelers to cancel a flight for any or no reason at any time. Amadeus announced plans to partner with fintech providers, Uplift and Fly Now Pay Later, to offer supplier partners and agencies the opportunity to provide travelers a new buy now pay later option.  

Sonesta Moves Small Group Bookings Online
(“Sonesta Introduces Hybrid Concierge, a Digital Meeting Planning Service,” September 9, 2022 via Lodging Magazine)
Sonesta announced plans last week to offer groups the opportunity to book small group meetings entirely online through CVENT’s Instant Book platform. The new online platform will be offered initially at approximately half of Sonesta’s managed properties and will allow users to view and book meeting space, select meeting room set ups and review available AV options – all online. Bookings will be handled via a single online, all-inclusive contract. Sonesta’s remaining managed properties will offer the new booking functionality by the end of 2022.

Happy Labor Day to those of you in the U.S. celebrating our last gasp of summer. Last week’s Online Travel Update features several stories regarding Google’s recently announced plan to wind down entirely its “Book on Google” booking platform. I hope you enjoy.

Book on Google Winds Down
(“Google to Phase Out Book on Google for Flights,” September 2, 2022 via Phocus Wire)
(“Google Will No Longer Be a Place to Book Travel as Fewer Travelers Were Using It,” September 1, 2022 via Skift) (subscription may be required)
Following its discontinuance of Book on Google for hotels back in May of this year, Google announced last week plans to shutter the facilitated booking service entirely with the closing of Book on Google for flights. Users outside the United States will see the service end on September 30, and users inside the United States will see the service end in March 2023. Once the service ends, users of Google’s search engine will be re-directed to suppliers’ and/or OTAs’ sites to make the desired booking directly. According to Google, the decision to end the service was based on users’ preferences to book directly on suppliers’ websites or via OTAs. Is this the official end to so-called “facilitated” booking platforms? It will be interesting to see whether other meta search sites (e.g., TripAdvisor) soon reach similar conclusions.

The last unofficial week of summer was relatively slow in the online travel world, though last week did see the release of the European Commission’s report on its recent study into the current status of hotel room distribution in the E.U. We’ve attached a short summary of the report as well as a link to the report itself. What this study might mean for hoteliers and OTAs in the E.U. remains unclear, particularly with one or more of the major distribution platforms possibly poised to become regulated under the Digital Markets Act (DMA). Enjoy.

E.U. Hotel Distribution – Update
(“Hotel Booking Market Sees Little Market Entry and Price Differentiation, EU Study Says,” August 26, 2022 via MLex Insights) (subscription may be required)
(“Europe’s Hotel Booking Sector Broadly Unaffected by Antitrust Intervention, Commission Concludes,"  August 26, 2022 via MLex Insights) (subscription may be required)
Long time readers of our Update know that for several years our weekly Update featured frequent updates on E.U. member countries’ investigations and ultimately, settlements involving OTAs’ distribution practices (largely around rate and availability parity). As a result of these various investigations, several countries banned contractual privity requirements altogether while others adopted so-called “narrow” parity, allowing OTAs to maintain only their direct channel rate parity requirements. These investigations and settlements have served as the basis for countless OTA contractual negotiations over the past several years. Now, the European Commission has taken a close look at the effects of these various approved practices on competition among distribution channels – both direct (hotel) and indirect (OTA). While I’ve not yet had a chance to read the entire report, a few items from the attached summary are worth noting:

This week’s Update features stories detailing several new booking platforms and Choice’s new direct billing product. Enjoy.

Competition Among Banks’ Travel Platforms Intensifies
(“Citi Launches New Travel Platform With Booking.com,” August 19, 2022 via Phocus Wire)
Citi (f/k/a Citigroup) announced last week the upcoming launch of its new travel platform, Citi Travel with Booking.com, in partnership with, you guessed it, Booking.com. According to Booking.com, the new website and mobile app will allow users to search, view and book hotels, flights and car rentals and pay for bookings with their Citi card and/or Citi loyalty program points.  Likely competitors to Citi’s new offering include similar offerings from Capital One, American Express and JP Morgan Chase.

Our “vacation edition” of our weekly Online Travel Update is below. Our regular Updates will resume next week. Have a great week everyone. 

News:

Four Takeaways From Airbnb’s Second Quarter Report
August 9, 2022 via Skift (subscription may be required)
Airbnb's revenue stream wasn't as internationally diverse in the second quarter as it was pre-pandemic, but it is slowly creeping back to that level as international markets open.

It’s earnings season, and this week’s Update for the week ending August 5, 2022, is focused on recent quarterly releases from Booking Holdings and Expedia Group. I’ve also attached second quarter earnings call transcripts for Airbnb, Expedia Group and Booking Holdings. I’ve not had a chance yet to dive into the transcripts, but I will share anything I find interesting in next week’s Update. Enjoy.

Uber Travel Launches in the UK
(“Uber Travel Launches First in the UK With Trains and Buses From Omio,” August 3, 2022 via Skift) (subscription may be required)
Over the past few months, we’ve included a few stories about Uber’s interest in growing beyond a ride-hailing application. This next Wednesday, select Uber users in the UK will be the first to experience Uber’s new “travel” offerings – specifically rail and bus tickets. Omio will provide the rail and bus ticket rates, itineraries and other product information. The application will automatically update users’ rail or bus itineraries whenever it learns of delays or other issues through the user of flight information mined from users’ Gmail accounts. Uber expects a broader rollout of the new offerings by the end of the month.  

This week’s Update features a story detailing recent progress with the EU’s Digital Markets Act (DMA). As the EU prepares for the full implementation of the DMA (and its sister legislation, the Digital Services Act), expect more stories in the future on these important pieces of legislation and what they might mean for the online travel industry. Enjoy.

E.U.’s Digital Markets Act (DMA) Moves Forward  
(“Digital Regulation Gets Go-Ahead in Europe,” July 29, 2022 via Phocus Wire)
The European Council approved the DMA earlier this month, and once signed by the President of the European Parliament and President of the European Council, the legislation will become effective six months later. While much as been written about the DMA and its many rules for large online platforms (so-called “gatekeepers”), its effect on the online travel industry remains unclear. Metasearch companies have applauded the DMA’s passage in the hope that the DMA curbs alleged market abuses by Google. Other industry members – particularly those identified as possible “gatekeepers” (both Booking.com and Airbnb) – have spoken cautiously in favor of the DMA and its stated goals while at the same time disputing their possible gatekeeper status. With a clearer path and timeline for the ultimate rollout of the DMA, expect to hear a lot more about the legislation and the changes coming to a travel platform near you.