Duff on Hospitality Law

Good Sunday morning from Seattle . . .   Our Online Travel Update for the week ending Friday, December 13, 2024, is below. 

Google and its “efforts” to comply with the DMA again garnered most of the industry’s attention.  As I said last week, expect this story to continue well into 2025.  Skift also provided a helpful status update on federal efforts around junk fees.  With the upcoming change in administrations in DC, I don’t expect to see any real progress federally around junk fees for some time (thus leaving open the door for states to regulate the issue themselves on less than a uniform basis (e.g., see Minnesota’s new junk fee requirements, which take effect in the New Year)).  Finally, airline loyalty programs continue to be under the microscope.  Why, you ask, should we care about airline programs?  The short answer is that airline programs and the rules that govern them (even possible new rules) are instructive when creating or operating any other form of loyalty program – including hotel programs.  Enjoy.

• • Google’s Latest Display Changes Draw Criticism from Platforms and Hoteliers.  In its ongoing efforts to comply with the European Digital Markets Act (DMA), Google recently tested changes to its display of hotel search results that removed its interactive map and associated free booking links; other links to intermediary booking platforms (the traditional “blue links”) remained.  According to Google, the changes, which were conducted in only three European countries, resulted in a significant drop of traffic to hotels while traffic to the intermediaries remained largely constant.  Google’s announced results come just weeks after a group of booking intermediaries criticized Google’s compliance efforts. 
    
    
  • Booking Holdings Expects $450M in Annual Savings from Organizational Changes.  The planned changes, which were announced earlier this year, will include job cuts at flagship, Booking.com, which alone are expected to produce over $100M in annual savings.   Additional savings are expected from modernizing processes and reducing their real estate portfolio. 
    
    
  • Airline Loyalty Programs Under the Microscope.  Airline loyalty programs are currently the subject of several ongoing investigations, including investigations by the Department of Transportation, the Justice Department and the Consumer Financial Protection Bureau.  The investigations (some of which we have written about previously) are largely focused on program changes that devalue the programs’ awards or benefits.  While the future of these investigations may be in jeopardy following the recent election, the rising chorus of consumer complaints regarding the programs is likely to continue.  More than ever, frustrated consumers have taken their concerns to social media channels, and trusted loyalty program resources (e.g., The Points Guy, Point.me) have questioned recent program changes.  For hoteliers, there are many potential lessons here, most importantly that plans to amend existing programs (particularly, any direct or indirect devaluing of credits) must be considered in light of likely (and possibly, extremely vocal) consumer backlash. 

As the year draws to a close, I suspect we’ll find fewer and fewer “Update worthy” stories to share.  You may not hear from us again until our annual “year in review” Update, which we usually circulate shortly after the New Year.  If we don’t connect before, I hope everyone has a wonderful holiday season.  Here’s to a great 2025 for you and your families.

Good Sunday evening from Seattle . . .  

As many of you know, I returned a few weeks ago from an extended sabbatical – three months well spent traveling, cooking, reading and driving my wife crazy.  Now that I am back in the office, it is time to start again our Online Travel Update.  We are using this opportunity to re-format things a bit and to re-commit ourselves to identifying the stories that we feel are most important and relevant to our clients; we all receive far too many “industry” updates each day and/or week.  For that reason, we may not circulate an Update each week.  If there is nothing important to share, there is no need for an Update.  Our Updates will also continue to feature comments from me, though you may find that my comments more than ever reflect my particular opinion, viewpoint or cynicism on a specific story or issue.  If you ever disagree with me, let me know.  I always welcome your feedback.

Finally, if you have ideas on how we might improve our Update, please let us know.  We want to make our Updates as helpful as possible.  If you know someone who might benefit from the Update (or even better, might benefit working with our hospitality team), please also let me know.  Thank you for being part of this newsletter. 

Now on to the Update . . .   Stories from the past two weeks are below.  Hotel fees and pending federal legislation seeking to uniformly regulate hotel fees remain an important industry issue.  Other updates reflected in the stories below include Google’s ongoing efforts to satisfy EU regulators and Expedia’s off and on relationship with Hopper.  Did Hopper really improve its customer UX such that Expedia is now comfortable working with Hopper or did Expedia’s new leadership’s desire to restore revenue lost as a result of terminating the Hopper relationship drive this latest decision?  Finally, did anyone listen to the recent Expedia quarterly earnings call (or read the associated transcript)?  I know at least one of you did because we talked about it last week.  I don’t know about you, but if you listen carefully to Expedia’s announced plans around packages (as explained by new Expedia CEO, Ariane Gorin), Expedia seems poised to turn packages and the use of package rates on their head.  Give it a listen or read.  It may be time to ask start asking questions of your Expedia account rep.  Enjoy.

• • Industry Groups Voice Strong Support for Federal Junk Fee Legislation.  It isn’t every day that both AH&LA and the Travel Technology Association speak out in favor of the same issue.
    
    
  • Industry Layoffs Are Not Limited to Hoteliers.  In recent weeks, much has been written about re-structurings and layoffs occurring at the large hotel companies.  This past week, we were reminded that these same re-structurings and layoffs are also occurring with some of the largest distribution platforms (Expedia earlier this year and now Booking Holdings).  Booking Holdings’ recent announcement regarding the layoff of 60 employees at one of its business units, Rocket Travel, raises interesting questions about Booking Holdings’ overall business (B2B) strategy. 
    
    
  • First Hoteliers, Now Online Travel and Tour Companies Voice Concern Over Google’s DMA Changes.  Something tells me that we will be hearing and reading a lot about this issue for weeks and months to come.  Expect to see more from us on this issue in future Updates as I get my arms around these latest changes.

Have a great week everyone.   

Good Sunday morning from Seattle . . .  Our weekly Online Travel Update (my last for the next 3 months) for the week ending August 2, 2024, is below.   Last week was a busy week in the online travel industry with second quarter earnings releases, junk fee updates and important competition announcements in the EU and UK.  Enjoy.

• • Highlights From Booking Holdings Second Quarter Earnings Release.  I won’t go into financial details from this past quarter’s release (that’s for the far more qualified analysts), but I will note a couple of my takeaways from the recent earnings release call (see attached transcript).  First, a definite focus on loyalty (Booking.com’s Genius program) and the noted increase (15% increase YOY) in Genius benefits (aka discounts).  It wasn’t that many years ago that I recall CEO Glenn Fogel dismissing the need for a loyalty program.  I chuckled when Glenn described the best part of the program – Booking pays nothing for it (suppliers pay for it all).  Second, Glenn’s and CFO Ewout Steenbergen’s opening remarks and the following analyst questions completely ignored Booking.com’s ongoing regulatory challenges in the EU – the DMA, recent Spanish fines, pending investigation in Italy, etc.  Not a single question about the anticipated effects of these ongoing developments.  What?  Third, how little was said (other than Glenn’s general optimism about and support for the platform) about Booking Holdings’ B2B programs – Booking.com, Getaroom and Rocket Travel. 
    
    
  • Are We Closer to a National “Junk Fee” Standard?  It appears so, yes.  This past week saw the United States Senate Committee on Commerce, Science and Transportation give its approval to the Hotel Fees Transparency Act of 2023.  The bi-partisan bill now moves to the full Senate for consideration and a vote.  If approved, the Senate version of the bill would then be reconciled with the previously passed House version (which passed out of the House back in June) and forwarded to the President for signature.  Before passing out of the Senate Committee, the bill was amended (at the urging of the Travel Tech Association and its members) to add language providing distribution platforms limited protection (a presumption) in the event hoteliers fail to provide accurate junk fee information.
    
    
  • Spanish Authorities Levy Fine Against Booking.com.  Much of last week’s attention (and industry reports) was focused on the Spanish competition authorities’ decision to fine Booking.com £413.24 and to impose certain “behavioral” modifications for abusing its market position over the past 5 years.  The practices that led to the fine include (1) imposing direct channel rate parity obligations while reserving the right to unilaterally adjust booking prices, (2) providing hoteliers inadequate information about participating in Booking.com’s Preferred, Preferred Plus and Genius Programs and (3) using the total number of reservations as a factor in determining a hotel’s ranking on the platform.  The modifications imposed by the Spanish authority are intended to address the “abusive” behavior.  Booking.com intends to appeal the fine arguing that the DMA is the proper forum for raising and uniformly resolving these types of issues across the EU (and not on a state by state basis). 

I hope everyone enjoys the remainder of their summer.  See you again in the fall. 

Good Sunday morning from Seattle . . .  Our weekly Online Travel Update for the week ending Friday, July 26, 2024, is below. It was a relatively quiet week this past week in the online travel industry, at least until Google’s (not surprising) announcement. Enjoy.

• • Google Changes Direction Again. So much for those many sessions (including my own) at recent industry conferences regarding marketing in a post-cookie world . . . Google announced this past week that it is abandoning entirely its previously announced decision to end all use of third-party cookies. The announcement comes after multiple prior announcements by Google delaying the planned demise. So why the change?  While Google’s announcement didn’t go into great detail, previous delays by Google (particularly the most recent) have been attributed to ongoing regulatory review of Google’s planned alternative – the Privacy Sandbox – by both privacy and competition regulators.  So, what is next? Again, the announcement did not go into great detail, except to say that users will soon have a choice regarding their web browsing practices. Google’s proposed alternatives are now under review by regulators.
    
    
  • Booking.com Found to Have Unlawfully Scraped Airline Website. In a unanimous decision out of a Delaware federal court this past week, a jury found that Booking.com unlawfully scraped data from travel supplier (and sometimes instigator) Ryanair. Booking.com’s activities were found to violate the U.S. Computer Fraud and Abuse Act. While the damages awarded to Ryanair were nominal ($5,000), the decision should provide a basis for Ryanair (and possibly other travel suppliers) to pursue injunctive relief against future similar behavior. Booking.com plans to appeal the decision.

Have a great week.

Good Sunday morning from Seattle... Our weekly Online Travel Update for the week ending Friday, July 19, 2024, is below. This week’s Update features a variety of stories, including news on the latest fines to be levied on Booking.com. Enjoy.

• • Recent Prime Day Travel Offerings Re-Kindle Amazon Rumors.  Regular readers of our weekly Update will recall the multiple stories we’ve featured over the years regarding Amazon’s rumored Interest in travel. Hailing from Seattle (like Amazon), I am asked often about Amazon’s interests at industry events and conferences.  As we noted in last week’s Update, Amazon again this year featured a limited offering of travel services as part of its annual Prime Day sale. Unlike prior years, this year’s offerings enjoyed their own dedicated “Prime Day Travel Deals” website page. Is this the beginning of a dedicated effort in travel? Only time will tell. In my opinion, absent a major acquisition by Amazon of an existing industry player, Amazon will only continue to play on the industry sidelines for the foreseeable future. 
    
    
  • Kayak Adds Features to Its Business Booking Platform. As competition in the corporate / managed travel space continues to escalate (see last week’s story on Marriott’s latest offering), Kayak announced this past week improvements to its Kayak for Business platform.  Users of the business platform will now have access to certain airline offerings (via API integration) and use of payment functionality.  Participating airlines include American, United and Southwest. 
    
    
  • Hungry Levies Record Fine on Booking.com. The Hungarian Competition Authority (GVH) announced last week that it had imposed a record fine on Booking.com for its failure to promptly cease certain previously identified commercial violations. The fine arises out of proceedings that commenced in 2018 when the GVH questioned Booking.com’s commercial practices – misleading free cancellation promises, psychological sales tactics and inaccurate payment information. In some instances, Booking.com took over four years to implement the required changes.

Have a great week everyone. Only two Updates remain before my upcoming departure. 

Good Sunday morning from Seattle . . .   Our weekly Online Travel Update for the week ending Friday, July 12, 2024, is below.  Marriott and its launch of a new small and medium sized business travel platform garnered most of the attention this past week.  While announcements by Expedia and Sumitomo Mitsui Card underscore an increasingly competitive travel card (now platform) landscape.  Enjoy.

• • Expedia Launches New Co-Branded Credit Cards.  Anyone surprised by this latest announcement?  In an attempt to further strengthen its growing loyalty program, One Key, Expedia this past week in partnership with Wells Fargo and Mastercard launched two co-branded credit cards.  Holders of the new cards will receive a variety of benefits, including the ability to earn One Key Cash, which can be used to book travel services and products across the Expedia Group family of platforms.  Holders of the cards will also receive elevated status within the One Key program, unlocking additional hotel room discounts and other benefits.  Those interested in the new cards can begin applying this summer.  Hoteliers should consider how these new cards and their “loyalty cash” rewards might affect parity across competing channels and whether these latest offerings violate pricing / discounting commitments contained in hoteliers’ existing distribution agreements.  These issues will become even more important with the soon-expected launch of a similar co-branded by card by Booking.com.
    
    
  • Amazon Expands Travel Offerings for Upcoming Prime Day.  Shoppers looking for the latest bargains during this week’s annual Amazon Prime Day (July 16-17) will now be able to shop a variety of travel products and services on a new dedicated page – “Prime Day Travel Deals.”  Participants in this year’s shopping extravaganza include Carnival Cruise Line, Southwest Airlines, Viator and Avis.  Members shopping the dedicated page will find discounts ranging from 20-30% off base fares / prices.  Regular readers of our Online Travel Update will recall that Priceline partnered with Amazon during last year’s Amazon Prime Day, though this year marks the first time Amazon has created a dedicated travel page.
    
    
  • Marriott Introduces Business Access by Marriott Bonvoy.  Marriott’s launch of its new small and medium sized business travel platform, Business Access by Marriott Bonvoy, captured much of the online travel industry’s attention this past week.  The new program, which is powered by Spotnana, offers business users a variety of traditional and non-traditional travel tools and services – discounted hotel stays at participating Marriott properties, loyalty program benefits, access to flights, rail tickets and rental cars and other traditional TMC services – expense management, employee tracking, etc.  To participate, travelers must be members of Marriott’s loyalty program, Marriott Bonvoy.    

Have a great week everyone.

Good Saturday afternoon from Manson, Washington...I hope everyone is enjoying their holiday week/weekend, at least those of you in the United States. Our weekly Online Travel Update for the week ending Friday, July 5, 2024, is below. As you can seek, it was a quiet week. Enjoy.

• • HOTREC Releases 2024 Distribution Study. European hospitality association (representing hotels, restaurants and cares), HOTREC, released its annual hotel distribution study this past week.  Key findings of the study include (i) over the past year, OTAs have increased their share of the European market by an average of 10% (while direct channel distribution has decreased), (ii) small hotels rely Most heavily on OTAs, (iii) Booking.com enjoys a 71% share of the European hotel market, while Expedia is far behind at 15% and (iv) OTAs undercut hoteliers’ rates in 4 of 10 use cases examined. The association is cautiously optimistic that Booking.com’s recent gatekeeper designation under the DMA will produce meaningful results for European hoteliers in the months ahead.  A complete copy of the 2024 study is linked to our story below.
    
    
  • Kayak Launches Premium SME Offering. Kayak for Business has announced the launch of a new premium offering targeting small and medium sized businesses.  The new offering includes group bookings, 24/7 agency support and access to negotiated corporate rates.  Users will pay a flat $20 per trip fee.  The service can also integrate with a variety of additional services, including expense management and duty of care providers. 

Good Sunday morning from somewhere over Colorado . . . Our weekly Online Travel Update for the week ending Friday, June 21, 2024, is below. It was another relatively quiet week in the online travel space, except, that is, if you are Booking.com (or its parent, Booking Holdings). It has been a tough couple of weeks for the large OTA. Enjoy

• • When All Other Strategies Fail. It has been a tough couple of weeks for Netherlands based Booking.com. As the fallout of Booking.com’s recent gatekeeper designation under the EU’s Digital Markets Act (DMA) continues to unfold (including this past week’s announcement that it was abandoning all parity provisions for European hotels), an exasperated Glenn Fogel had little left to say other than that the EU’s rules were “dumb.” I’m sure we’ve all had weeks like that.

Have a great week everyone. I look forward to seeing many of you at the HSMAI event in Charlotte this week.

It was a busy week in the online travel world as evidenced by the number of our stories. Enjoy.

• • Cruise Operators Prepare for Total Pricing.  The recent announcement by some of the largest cruise companies to provide passengers total pricing (inclusive of all fees) underscores the breadth of California’s recently enacted pricing transparency law.  It isn’t just hoteliers and ticket agencies that need to comply.  Rather than limiting this change to California (or more properly, California consumers), the cruise companies plan to rollout total pricing nationwide.  The announced changes will go into effect on July 1, 2024.
    
    
  • ADA Booking Accessibility Rules at Issue in Recently Announced Marriott Settlement.  Federal prosecutors in Colorado announced last week a landmark settlement with Marriott over the booking of accessible rooms across the Marriott portfolio.  At issue were Marriott hotels’ alleged failure to provide needed detail about ADA accessible hotel rooms and the inability (prior to October 2022) to guarantee an ADA accessible room through Expedia.  As part of the settlement, Marriott has agreed, among other things, to list all of its accessible rooms through its centralized booking system, to provide details about each accessible room, to make accessible rooms available through the largest online travel agents (Expedia and Booking.com) and to allow Marriott Bonvoy members to book accessible rooms with points. The Colorado settlement agreement (a copy of which is embedded in the attached Skift article) will likely serve as a baseline for future enforcement and compliance efforts (similar to Marriott’s settlement with Pennsylvania regarding mandatory fee disclosures).  I’d encourage everyone to read it. 
    
    
  • OTAs Make Push for Corporate Travelers.  It should come as no surprise to our readers that the largest online travel agents (those that historically have focused primarily on leisure segment) are making huge pushes to capture a portion of the corporate travel segment, particularly in the SMB arena.  This recent trend is on top of efforts by other platforms to build better managed travel platforms (booking, payment, expense management, loyalty program recognition) – in many instances bypassing legacy GDS connections. 
    
    
  • Advocate General Questions Necessity for Parity Provisions.  In a precursor to an expected decision by the EU’s highest court, Advocate General Anthony Michael Collins suggested that Booking.com may find it difficult to prove that its controversial parity provisions are “indispensable” and “proportionate” to it maintaining its economic viability and thus exempt from EU competition law.  The preliminary opinion stems from a Dutch court case brought by German hoteliers seeking damages for Booking.com’s use of the illegal (at least in Germany) parity provisions.  Also at issue in the case is the definition of the relevant market for purposes of assessing the disputed clauses.  According to the Advocate General, the market needs to be viewed from the eyes of hoteliers and consumers (and not necessarily the eyes of the distributor).  Although not binding on the EU court, the opinions of advocate generals are often followed. 

This week’s Update features a variety of stories – STRs, algorithm leaks and Hilton campgrounds (sort of):

• • Las Vegas Price-Fixing Case Is Appealed.  A few weeks ago we reported on a Nevada federal district court’s (second) dismissal of a class action case brought against Las Vegas’ hoteliers’ over their use of certain Cendyn revenue management tools.  Not surprisingly, the plaintiffs have now appealed the court’s dismissal to the Ninth Circuit, the first such appeal of the several algorithmic cases currently pending against hoteliers.  A decision by the appeals court is not expected until 2025.
    
    
  • Booking.com Focused on U.S. STRs.  When it comes to short term rentals (STR), European online travel agent Booking.com is now taking a U.S. first approach.  During the first quarter of 2024, STRs accounted for 36% of all bookings on the platform.  To appeal to U.S. consumers, Booking is particularly focused on payments, liability insurance and its damage policy.  Families (however defined) are making up a larger and larger portion of users interested in STR bookings.
    
    
  • Air France – KLM Again Delays Introduction of GDS Surcharges for TMCs.  Fourth time the charm?  Air France – KLM has announced a further delay in its planned introduction of a €21 surcharge for corporate bookings made via legacy GDSs.  Why the additional delay?  Perhaps a lesson learned from American Airlines aggressive approach?  According to the airline, the delay is needed to resolve “issues” and to “support our partners.”  Last summer the airline removed all short-haul flights from GDS channels, reserving those routes for NDC connections.
    
    
  • Hilton RVs Officially Launched.  This one is of personal interest.  Not actually “Hilton” RVs, but close.  Users of Hilton’s booking channels can now search and book accommodations (RVs, tents, etc.) at several AutoCamp locations (Yosemite, Russian River, Cape Code, Joshua Tree, etc.).  Hilton Honors members can also earn and redeem points for their AutoCamp stays.  Having been part of similar efforts in the last few years, I can only imagine the discussions within Hilton as it considered the effects of adding this new non-hotel inventory to its regular online offerings – OTAs, wholesalers, loyalty program, etc.