Duff on Hospitality Law

It’s earning season, and this week’s Update features a number of stories detailing the quarterly earnings releases from several of the largest online travel agencies (OTA) and global distributions system (GDS) companies. We’ve also included copies of the quarterly releases for both Expedia and Booking.com. Enjoy.

Tripadvisor Explores a Consumer Subscription Program
(“Tripadvisor to Launch Its First Subscription Plan for Travelers,” November 6, 2020 via Skift Travel News) (subscription may be required)
Last week, Tripadvisor CEO Steve Kaufer announced during the company’s third-quarter earnings call that the review/metasearch/booking site is planning to introduce a paid consumer subscription program that would provide subscribers discounts on hotels and attractions, and other possible benefits (e.g., unique experiences). Although details of the program are still being finalized, Kaufer claimed that the program would be complimentary to suppliers’ existing loyalty plans. This new consumer-oriented program would supplement Tripadvisor’s existing subscription plans for hotels and restaurants, including the recently introduced reputation management program.

Last week was relatively quiet on the distribution front. Enjoy. 

Tensions Between Google and Booking.com Become Public
(“Booking.com and Google Clash in Europe as Regulators Target Both,” October 29, 2020 via Skift Travel News) (subscription may be required)
It is somewhat of an understatement to say that Google’s growing interest in travel has garnered the attention of a few of its largest advertisers. Over the past year, representatives of the largest OTAs, namely Expedia and Booking, have been increasingly vocal with their “concerns” about Google and its practices. Rcently, Booking made its views about Google even clearer, when it declined to lend support to Google’s campaign to oppose EU regulatory action directed at online “platforms.” In the words of Booking, “Our interests are diametrically opposed.” While Booking’s recent comments may have been motivated primarily by its effort to avoid being viewed by EU regulators as an online “gatekeeper,” it is quite clear that Booking would like nothing more than to sit on the sidelines while its former “partner” faces the scrutiny of regulators alone.

What started out as a relatively quiet week in the distribution world ended with a flurry of activity and announcements (some were expected and some were not). I hope you enjoy.

Booking.com Expands Its Product Offerings for U.S. Travelers
(“Booking.com launches flight search and booking in the U.S.,” October 22, 2020 via Phocus Wire)
As of October 15, U.S. travelers can now search and book airline tickets on Booking.com. This latest news comes on the heels of several recent announcements by Booking.com and its parent company, Booking Holdings, including last week’s public announcement about Booking.com abandoning its core BookingSuite products. Many users in the United Kingdom and other countries in the EU have had access to the airline offerings for close to a year, though much of the transaction to purchase tickets was handled by a third party. In contrast, U.S. users will complete the transaction entirely on the Booking.com site. Facilitated payments, corporate and managed travel and now airline tickets…What’s next for Booking.com?

Travelers Seeking Increased Transparency
(“Skyscanner, Expedia, Hopper on need for transparency in travel retailing,” Oct 14, 2020 via Phocus Wire)
In a recent roundtable held at the Open Industry Summit: The New Reality of Flight Shopping hosted by APTCO, online platforms Expedia, Skyscanner and Hopper emphasized that today’s travelers are seeking more than ever critical information about destinations’ pandemic status and suppliers’ health and safety practices, and flexible booking terms. At times, these “new” factors can be equally or even more important than price. Recognizing the systems challenges associated with providing much of this “new” information, the intermediaries stressed the importance of suppliers making this information as simple as possible.

This week’s Update features two stories on the growing (temporary?) phenomenon of using hotel guest rooms and other public spaces for those seeking an alternative arrangement to working from home and how those new remote work locations are being distributed. If this trend continues, it won’t be long until distributors (either new or existing) begin featuring this new form of inventory. Enjoy.

Hotels and Co-Working Companies: An Inevitable Combination
(“Hotels Partnering With Co-Working Companies Signal a Pandemic Trend Could Be Here to Stay," Oct 6, 2020 via Skift Travel News) (subscription may be required)
As hotel owners and operators desperate for revenue have offered their rooms to first responders, the homeless, those quarantining and even prison inmates, it should be no surprise that these same owners and operators are now partnering with co-working companies to offer their otherwise unoccupied rooms and empty public spaces to far more tame work-from-home employees. In late September, Proper Hospitality partnered with co-working provider Industrious to bring “work-from-hotel” offerings to Proper’s hotels in Austin, San Francisco and Santa Monica. Next, Proper plans to expand those offerings to its additional Southern California properties. Proper is just one of several traditional lodging (or gaming) companies (e.g., MGM, Mandarin and CitizenM, which we covered in a prior post) exploring the space, though Proper is one of the first lodging brands to partner with an experienced and well-known co-working provider. Although the partnership is scheduled only to run through mid-December, many feel that this partnership is likely a sign of things to come.

With this week’s Update, we welcome Amazon back to the distribution discussion with its recent introduction of Amazon Explore. Enjoy.

OTA Insight Introduces Parity Certification Program for Distributors
(“OTA Insight launches Parity Certification Program for Distributors, Sep 29, 2020 via Hospitality Net - Latest Industry News)
Great idea in theory, but will the largest distributors actually use it? Recently, OTA Insight, the cloud-based distribution data platform, announced the launch of its Rate Parity Distribution certification program. With a focus on system controls, applicable contract requirements and legal requirements, the program assesses whether a distributor is in compliance with applicable rate parity protocols and best practices. Participation is open to all distributors. While certification may appeal to new or fledgling distributors (perhaps as a differentiator), I question whether the largest distributors will ever voluntarily open their parity practices to review by a third party. More to come.

This week’s Update features a variety of stories, including the big three industry players, Trip.com, Expedia and Booking.com; the always insightful update on the current status of airline distribution; and details on CitizenM’s recent introduction of a subscription plan for corporate travelers. Enjoy.

Booking.com Bullish on Long-Term Prospects of Short-Term Rentals
(Booking Holdings CEO Sees Greater Traveler Awareness in Alternative Accommodations as a Long-Term Boon,” Sep 22, 2020 via Skift Travel News) (subscription may be required)
With approximately 6.7 million short-term rental listings on its platform, Booking.com hopes to make the most of travelers’ growing interest in alternative accommodations. Booking Holdings President and CEO, Glenn Fogel, believes the pandemic-induced interest in short-term rentals will remain for many years to come and should position Booking.com well against its online rivals. While demand continues to grow for short-term rentals, creating the supply needed to meet such demand has been challenging. According to Fogel, onboarding its millions of rental properties has cost far more than onboarding traditional guest rooms accommodations. As the demand for short-term rentals continues to rise (and is anticipated to remain long after the pandemic subsides), one might expect to see traditional lodging operators giving rentals a second look. 

This week’s Update features a number of stories on short-term rentals, which is a trend that we will likely see continue as interest continues to grow over Airbnb’s long-awaited IPO. Enjoy.  

Marriott Continues Its Transition to Expedia Partner Solutions
(“Expedia Is Now Marriott’s Exclusive Provider of Wholesale Rates for Travel Agents,” Sep 14, 2020 via Skift Travel News) (subscription may be required)
Last fall, we (like every major distribution news outlet) featured a story detailing Marriott’s decision to partner with Expedia Partner Solutions (EPS) on the re-distribution of Marriott properties’ wholesale rates. This past week, the transition became official as EPS began emailing members and prospective members of the Expedia Travel Agent Affiliate Program and advising them that they would soon have exclusive access to higher margin wholesale rates for more than 7,400 Marriott properties (and with the transition to EPS comes the end of sourcing such rooms through legacy intermediaries (e.g., Hotelbeds)). In an effort to expand its Travel Agent Affiliate Program (which currently boasts 100,000 agents globally), Expedia is offering prospective affiliates a variety of offers, including increased commissions for bookings through December 31^st. While Expedia has made efforts to expand its EPS wholesale offering, no other major brand has yet to follow Marriott’s lead.

Pandemic, protests and riots and now wildfires. To say 2020 has been a challenging year is an understatement. 

As I anticipated, with summer now officially behind us, things have again picked up in the distribution world. This week’s Update features two stories on airline distribution, which as most of my readers know by now, I find instructive as to what we might soon see in the accommodations world, particularly as both industry segments consider plans for a post-pandemic world. Enjoy. 

As One Airline Steps Forward Another Retrenches
(“Air France-KLM and Amadeus Sign Landmark Distribution Deal, Sep 10, 2020 via Skift Travel News; “Delta pauses NDC development, "doubles down" on existing distribution strategy, Sep 10, 2020 via Phocus Wire) (subscription may be required for Skift Travel News)
By now, most everyone is familiar with new distribution capability (NDC) and its potentially disruptive effect on traditional airline distribution. Over the years, we’ve featured dozens of articles about the technology and the bitter battles that have been waged between carriers and their traditional global distribution system (GDS) partners over adoption of the technology. This past week saw announcements by two major airlines detailing the drastically different directions each was taking with regard to the future of airline distribution. 

As summer was coming to a close last week (and people everywhere were doing best to hang onto the last few glimmers), there was little noteworthy news coming out of the distribution world. Enjoy.

Travel Marketers Beware: Apple’s Updated Privacy Practices May Be A Marketer’s Nightmare
(“How Apple’s New Privacy Effort Will Impact Travel Marketing, Sep 3, 2020 via Skift Travel News) (subscription may be required)
While Apple announced late last week that it was likely postponing until early next year previously announced changes to its privacy practices, the proposed changes nevertheless warrant attention by hoteliers and OTAs alike. The changes, which are part of Apple’s campaign to provide users greater transparency and control over their data, require application developers to secure users’ affirmative consent (“opt-in”) before tracking their online practices. The changes further require developers to clearly disclose what data they will be collecting and with whom they will be sharing the data. Should iOS users decide against allowing applications to track their online behavior, hoteliers and OTAs (both of whom maintain branded applications and rely heavily on online marketing firms to place targeted ads in third-party applications) may soon have to find new (or even old) methods of reaching their guests.