Duff on Hospitality Law

Our weekly OTA & Travel Distribution Update for the week ending December 1, 2017 is below. This week’s Update features a variety of distribution stories as well as a report on the latest rankings of the large hotel loyalty programs.

Ryanair Tires of Expedia’s Unauthorized Scraping [OTA]
("Ryanair sues Expedia, accusing online travel giant of illegally scraping its site to sell flights," GeekWire, December 1, 2017)
European discount airline, Ryanair, brought suit last week against Expedia in Washington Federal District Court alleging, among other things, that Expedia repeatedly scraped information off Ryanair’s website and then used that information to sell the airline’s tickets (at times, at fares greater than those available directly through Ryanair), all without Ryanair’s approval and in contradiction to Ryanair’s express requests. A copy of Ryanair’s District Court complaint is available. According to the complaint, Expedia’s actions constitute a violation of the federal Computer Fraud and Abuse Act, which prohibits the use of certain computers without authorization (or exceeding authorized access). Those that follow Expedia’s periodic disputes with its suppliers will recall that Expedia and Ryanair were parties to a 2008 lawsuit over the unraveling of the parties’ package partnership. Rumors of this latest skirmish surfaced earlier this year in February.  We will continue to monitor this litigation as it proceeds further and will provide periodic updates.

This week’s Update for the shortened week ending Wednesday, November 22, is below.

Ctrip Launching English-Language Booking Platform [OTA]
("Ctrip Relaunches Trip.com as Its English Language Travel Agency Brand," Skift Travel News, November 20, 2017)
Ctrip, often referred to as one of the big three global online travel agencies, rolled out last week its English language booking engine. On the heels of its acquisition of Trip.com (the former S.F. based trip recommendation start up), Ctrip has relaunched Trip.com as its booking platform for English speaking travelers. In conversations this past summer, Ctrip executives hinted at plans to incorporate online bookings into its traditional metasearch platform. While Skyscanner already provides limited direct booking capabilities, Trip.com may ultimately become the platform that Ctrip uses to combine the businesses on a global platform.

This week’s OTA & Travel Distribution Update is below and features stories on both traditional OTAs and short-term rentals. Enjoy.

TripAdvisor to Add Questionable Guest Warnings (METASEARCH / OTA]
("TripAdvisor to flag hotels with reports of sexual assault," BBC News - Technology, November 9, 2017)
Much has been written this past week about TripAdvisor’s recently announced decision to include conspicuous warnings on its website listing about properties reported by reviewers to present health and personal safety concerns. The decision comes after an investigation by the Milwaukee Sentinel that found that TripAdvisor had removed repeatedly (and without explanation) a reviewer’s post regarding her alleged assault by an employee at a Mexican resort property. According to TripAdvisor, decisions whether to add such warnings about properties will be made by a group of unidentified TripAdvisor employees. One can only hope that these employees conduct appropriate investigations (including affording suspected properties due process to respond to these devastating allegations) before posting these “scarlet letter” warnings.

This week’s OTA & Travel Distribution Update for the week ending November 10, 2017 is below. Senator Kobuchar’s recent request for an DOJ and FTC investigation into OTAs’ purportedly anti-competitive practices leads this week’s Update.

U.S. Following UK’s Footsteps by Launching Probe into OTAs’ Anti-Competitive Practices?  [OTA]
("Sen. Klobuchar Urges Online Travel Agency Antitrust Probe," Hotel Online, November 7, 2017)
On Tuesday last week, Senator Amy Kobuchar (D-Minn.) wrote a letter to the Department of Justice and Federal Trade Commission seeking an examination of online travel agents’ practices that can be “detrimental to consumer welfare.” According to Kobuchar, the concerns that lead the UK’s Competition and Markets Authority (CMA) to re-open its investigation into OTAs’ practices just weeks ago (see our prior story) warrant a similar examination here in the U.S. Kobuchar’s letter comes 8 months after raising similar concerns (along with Senator Jerry Moran (R-Kan.)) with the Department of Transportation, only to be told by the DOT that its existing travel consumer protection policies were sufficient to address the Senators’ concerns.

Our weekly OTA & Travel Distribution Update for the week ending, Friday, November 3, is below. The week’s update features a variety of stories, including a potentially landmark purchase by Airbnb.

Airbnb Going Mainstream with Possible Wyndham Purchase [SHORT-TERM RENTALS]
("Airbnb Might Buy Wyndham’s European Vacation Rental Business," November 3, 2017)
Skift reported last week that Airbnb (among other possible purchasers) may be evaluating a possible purchase of Wyndham’s $1B European vacation rental business. Wyndham boasts tens of thousands of listings throughout Europe and would quickly expand Airbnb’s global (and luxury) offerings. Expect more details on this purchase and its effects if Airbnb becomes the prevailing suitor.

Navigating Disruptive Climates, hosted by Washington Hospitality Association, was held on October 22-24, 2017 at the Tulalip Resort Casino in Tulalip, Washington. My presentation at the conference, "The War Rages: Hotels vs. Distribution Disruptors" is available below.

The presentation will give you the background you need to better understand today’s distribution industry and the leading disruptors. You’ll learn key distribution considerations and negotiation points, and you’ll get a foretaste of future disruptors, all of which will help you position yourself to better weather the changing world of distribution.

If you have any questions, feel free to contact me at greg.duff@foster.com or at 206.816.1470.

This week’s OTA & Travel Distribution Update for the week ending October 27, 2017 is below. This week's Update includes a number of substantive stories on OTAs, particularly, European authorities’ renewed interest in OTAs’ allegedly questionable information practices.

Here We Go Again – UK’s Competition and Markets Authority Re-Opens OTA Investigation [OTA]
("Hotel booking sites probed by consumer watchdog," BCC Front Page, October 27, 2017)
Those of you who followed the many OTA investigations conducted throughout the EU over the last few years will recall that the UK’s Competition and Markets Authority’s (CMA) predecessor, the Office of Fair Trading (OFT), initiated the effort by engaging in an on-again / off-again investigation that commenced in 2010. That investigation ultimately produced the idea of “closed group” discounts and little else. Well, the CMA is back. . . Last week the CMA announced that it was opening another investigation into third part booking sites to examine the clarity, accuracy and presentation of information to consumers on such sites. Taking a page from AH&LA and the many concerns it has voiced over the past year, the CMA plans to examine booking sites’ sort order (e.g. how commissions might affect sort order – e.g. Expedia Accelerator), selling tactics (e.g. notices regarding the number of remaining available rooms), discount claims and hidden charges. As part of its investigation, the CMA is circulating questionnaires with distributors and soliciting feedback from hoteliers and consumers who use the sites (responses are due by December 15, 2017). Details regarding the recently announced investigation, contact details for those wishing to provide feedback and an interesting video about the investigation are all linked below.

This week’s OTA & Travel Distribution Update for the week ending October 20, 2017 is below. Short-term rentals feature prominently is this week’s Update.

Short-Term Rental Platforms Not Target of Hong Kong Regulators [SHORT-TERM RENTALS]
("Hong Kong says online rental platforms not target of regulation, MLex, October 20, 2017)
Secretary of Home Affairs, Lau Kong-wah, clarified last week that short-term rental platforms (e.g. Airbnb) are not the target of Hong Kong’s Hotel and Guesthouse Accommodation Ordinance. Under the Ordinance, hosts offering accommodations for a fee for 28 or fewer continuous days are required to obtain a license. Platforms facilitating the booking of such accommodations are not regulated under the Ordinance. In recognition of the difficulty of identifying and then regulating unlicensed hosts, Hong Kong regulators are asking platforms to assist in identifying and de-listing unlicensed accommodations and at the same time proposing changes to the Ordinance to make unlicensed facility owners criminally liable for violations.

Julie Eisenhauer is a guest author and a CPA at Clark Nuber PS.

Revenue is an important indicator of a hotel property’s financial health. It is used to analyze and interpret financial results using key industry operating metrics ( i.e., average daily rate [ADR] and revenue per available room [RevPAR]).

Revenue may also drive the calculation of certain costs, such as management fees, franchise fees, capital improvement reserves, marketing fees and business taxes, as these are often calculated based on a percentage of revenue. As a result, owners and operators need to be aware of changes coming in financial reporting standards related to revenue recognition effective January 1, 2018 (public companies) and January 1, 2019 (private companies).

This week’s OTA & Travel Distribution Update for the week ending Friday, October 13, is below. This week’s Update features stories on short-term rentals (or should I say hotels?), OTAs and loyalty. I hope you enjoy.

Airbnb To Introduce Branded “Lodging” Concept [SHORT-TERM RENTALS]
("Airbnb Experiments With Hotel-Like Concept Outside Orlando," Skift Travel News, October 12, 2017)
For some time now people have speculated as to when (if ever) large distributors might bypass their suppliers all together and enter the lodging business themselves. For those of you who doubted that the day would ever come, let me introduce you to “Niddo powered by Airbnb.” Airbnb announced plans last week to partner with Florida boutique hotel and residential developer, Newgard Development Group, to develop an apartment building outside Orlando, Florida, that will be designed, built and operated to facilitate tenants’ short-term rentals. Tenants who elect to share their residences will be automatically enrolled in Airbnb’s Friendly Building Program (under which commissions are shared with the building’s owner) and will be permitted to share their residences for up to 180 days each year. Features of the planned building include (i) a hotel-like front desk with front desk staff, (ii) shared common areas purpose built for both residents and short-term renters and (iii) in-house cleaning and linen services. Newgard intends to do more of these dedicated short-term rental facilities throughout the South if this first Orlando project is successful.