Duff on Hospitality Law

Our weekly Online Travel Update for the week ending December 2, 2022, is below.  This week’s Update features an important update on distributors’ use of so-called narrow parity provisions in Australia and takes a closer look at two of Phocus Wire’s 2023 Hot Travel Startups.  Enjoy.

• • Australian Treasury Re-Examines Narrow Parity Provisions.  In a statement released last week, the Australian Treasury announced that it was commencing a review of distributors’ continued use of narrow (or direct channel) parity provisions.  The investigation makes good on the Australian Labor Party’s campaign promise to abolish price parity clauses if elected to office.  Readers of our Update will remember that Australia’s Competition & Consumer Commission (ACCC) investigated distributors’ use of parity provisions back in 2016, which ultimately led to Expedia’s (but not others) voluntary abandonment of the entire practice.  As part of its current review, the Treasury has circulated a questionnaire among hoteliers asking hoteliers to comment on the consequences of failing to honor the narrow parity provisions.  Hoteliers have until January 6 to respond. 

• • Another Weekly Update, Another Story on Payments.  Anyone noticing a trend here?  This past week Mastercard announced it was partnering with hospitality solutions provider, Sabre, and Sabre-owned Conferma Pay, to (in their words) build new capabilities for virtual cards.  As part of the newly announced deal, Mastercard is making a minority investment in Conferma.  Sabre’s purchase of Conferma and this newly announced partnership with Mastercard, is part of Sabre’s longer term of goal of building an independent payment ecosystem.  This latest announcement by Mastercard comes on the heels of Amadeus’ recent launch of its own payment business, Outpayce (which we covered in a prior Update), which will also include the launch of a virtual credit card.

• • Hot 25 Travel Startups for 2023 – Fairlyne.  Familiar with the term “re-commerce”?  Although the term has been primarily used in the retail industry, Paris-based Fairlyne hopes to change that.  Fairlyne’s technology allows railways, airlines and hoteliers to re-sell previously booked (but unused) non-refundable tickets and bookings.  As our readers might recall, there are a number of platforms that purport to allow travelers to re-sell their booked reservations (many acting in violation of applicable booking terms and conditions), but this is the first platform we’ve seen that works directly with the suppliers to allow their travelers and guests to re-sell their reservations. 

Our holiday-shortened weekly Online Travel Update for the week ending Friday, November 25 is below. This week’s Update features (again) multiple stories on booking platforms planned roll out of new payment tools. We’ve also included a copy of the Legal Alert we circulated last week regarding the FTC’s planned rule making regarding resort fees. Interested industry members have a limited opportunity to submit comments to the FTC regarding any proposed rule.

Expedia Partners with Payment Application Afterpay. Expedia and buy now pay later payment app, Afterpay, announced this past week that Expedia’s flight and hotel inventory will now be available through Afterpay’s app. Users of the app will now be able to pay for their bookings in four interest-free monthly payments. According to Expedia, Afterpay is the first of many future similar partnerships. It will be interesting to watch how suppliers respond to these new flexible payment options, particularly with regard to discounted rate plans whose conditions include advance payment.

Fareportal Introduces New Cancelation Options. Users of Fareportal’s online travel agencies, CheapOair and One Travel, will now be able to cancel their air bookings for any reason, irrespective of what a carrier’s cancelation policy might provide (purchasers of non-refundable tickets may receive a refund up to 80% of the ticket price). Launched earlier this year (June) on CheapOair, the service is now available on One Travel and will be soon available on CheapOairCanada. Fareportal expects to announce additional “fintech” products and services in the months ahead.

Have a great week everyone. 

Our weekly Online Travel Update for the week ending Friday, November 18, 2022, is below. This week’s Update includes Phocus Wire’s annual listing of its Hot 25 Travel Startups. The list always provides an interesting glimpse at what may be coming in the months and years ahead in online travel. Enjoy.

• • Phocus Wire’s Hot 25 Travel Startups. Phocus Wire’s fifth installment of up and coming travel companies is here. This year’s list features a variety of companies, the majority of which (14 of the 25) were started since the COVID crises began. Over the next few weeks, we plan to take a closer look at a few of the listed companies that caught our attention.
  • TripAdvisor Considering Plans to Revise TripAdvisor Plus. New TripAdvisor CEO, Matt Goldberg, is apparently considering options for overhauling its much-criticized travel subscription program, TripAdvisor Plus. As many will recall, the program received little support from the major lodging brands for fear of undercutting their own direct channel efforts and/or violating existing third-party channel rate parity obligations. According to Goldberg, TripAdvisor may drop the existing $99 annual membership fee. While dropping the membership may help address lagging membership numbers, TripAdvisor will have to address the concerns of suppliers whose participation (and inventory) will be critical to any hoped success.
  • Is Uber the Next Online Travel Distribution Platform? Uber’s travel-related offerings are expanding. When initially launched in March, the program (Uber Explore) allowed users to book activities (and an Uber ride to the activities) sourced through Yelp. With its new partnership with TripAdvisor’s Viator (and other announced partners), Uber will add to the events and activities available on the app and expand the program to over 10,000 cities. Are events and activities a sign of things to come? Will users one day be able to book accommodations (and a ride to their selected accommodation) on the widely used application?
  • Yet Another New Payments Platform is Coming. Add Amadeus to the growing list of distribution platforms planning to provide users new payment (fintech) options. Amadeus reports that it is making a “significant investment” in the launch of a new payment business, Outpayce. As part of its effort, Amadeus has applied to the Bank of Spain for an eMoney license, which would allow Amadeus to provide regulated banking services in the EEA, including issuing payment cards.

Have a great week, and for those of you celebrating this week, Happy Thanksgiving.

Good Sunday afternoon from Seattle . . .  Our weekly Online Travel Update for the week ending November 11, 2022, is below.  Booking Holdings features prominently in this week’s Update as its planned acquisition of Etraveli faces regulatory scrutiny.  Enjoy

Airbnb to Feature Total (All-Inclusive) Pricing

Readers of our weekly update know that resort fees and total (or all-inclusive) pricing are again in the news. While the FTC considers its plans for regulating resort fees and other mandatory charges, some industry members are proactively announcing their own total pricing plans. This past week, Airbnb announced plans to feature total pricing (including nightly rates plus cleaning fees and other applicable Airbnb fees and charges, but excluding taxes) at the beginning of users’ search process across the entire the rental platform (Airbnb already displays all-inclusive pricing where required in the EU). Similar all-inclusive pricing will be featured on the platform’s maps, property listings and price filter tools. Airbnb’s failure to disclose often sizeable cleaning fees until check out has been the subject of many social media complaints and criticisms of the rental platform. The changes are scheduled to take effect next month.

This week’s Update delves back into resort fees and includes a story detailing planned future regulation of the fees by the FTC. While resort fees may not technically be an “online issue,” potential federal regulation will definitely affect hoteliers’ online efforts and the efforts of the many online travel distribution platforms they use. Enjoy.

Biden Administration Announces Plan to Tackle “Surprise Fees”
(President Biden Targets Hotel Resort Fees in Larger Crackdown,” October 27, 2022 via Skift (subscription may be required)
In comments last week, President Joe Biden noted that his administration planned to crack down on “surprise fees,” which according to Biden, included specifically hotel resort fees. Earlier this month, the Federal Trade Commission issued an Advance Notice of Proposed Rulemaking (ANPR) to initiate an administrative rule making process to address junk fees. The FTC is now seeking comment on the issue. Copies of the FTC press release and ANPR are attached. We will continue to keep our readers apprised of the FTC’s activities going forward.

Three of the four stories we feature in this week’s Update detail recent or ongoing examinations by competition regulators of the trade practices of several online travel platforms. Relatedly, we also include again a link to our FAQ regarding the recently enacted European Digital Markets Act (DMA). We expect to have similar updates on the Digital Services Act (the DMA’s sister legislation) out shortly. Enjoy.

India’s MakeMyTrip Fined for Anti-Competitive Behavior
(“MakeMyTrip and OYO Fined for Anti-Competitive Behavior,” October 21, 2022 via Phocus Wire)
In a press release issued last week, the Competition Commission of India (CCI) announced that it levied fines of $27 million against online travel agent, MakeMyTrip, for abusing its dominant market position. The fine is in addition to mandated behavioral changes. The CCI’s investigation (which ran from 2017-2020) examined MMT’s contracting (rate and availability parity and exclusivity) and marketing practices. Relatedly, OYO Hotels & Homes was fined $20 million for its agreement with MMT, which according to regulators, “adversely affected competition.”

It was another relatively quiet week in the online travel world, as evidenced by the stories below. The one obvious exception was the European Commission’s final publishing of the much-discussed Digital Markets Act (DMA), which now becomes effective next month. My colleague Eva Novick (who leads our privacy and data security practice team) prepared a very helpful FAQ for those of you wondering whether the DMA might apply to you. Even if the DMA does not apply to you directly, it likely will apply to one or more of the online platforms that you use (or may use in the future) – most notably, Airbnb and Booking.com. Enjoy

Booking Holdings Presses Ahead With Etraveli Acquisition
(“Booking Holdings Notifies Etraveli Deal for E.U. Approval,” October 12, 2022 via MLex Insights) (subscription may be required)
Following its recent receipt of the UK’s CMA’s approval of its proposed acquisition, Booking is now pushing ahead and seeking formal approval of the acquisition from the EU.  As part of its review, the EU will be seeking input from a variety of industry members. For those of you not familiar with Etraveli, its brands include Gotogate, Mytrip and Flightnetwork, all of which provide search, booking and fulfillment products and services for flights. Booking Holdings already works with Etraveli to provide Booking its air offerings, and with the purchase, Glenn Fogel (C.E.O. of Booking Holdings) hopes to make users’ booking of flights even more seamless (all part of Glenn’s “connected trip” initiative).

As you can see from the list of stories, it was a relatively quiet week in the world of online travel, with Booking.com garnering most of the attention. From my perspective, as Booking.com gets closer to delivering on Glenn Fogel’s vision for a “connected trip” (accommodations, air, activities, diverse payment platform), Booking.com will soon become the dominant player in online travel. Enjoy.

Booking.com Expands Experience Offerings
(“Booking.com Taps Klook to Broaden Experiences Offerings,” October 4, 2022 via Phocus Wire)
Last week, Booking.com announced that it had entered into a strategic partnership with tours and activities platform, Klook. The partnership will soon allow users of Booking.com to access and book tours and activities in 175 cities across 30 markets. The announcement comes on the heels of similar prior activities additions by Booking.com (Viator and Musement in 2021 and 2020, respectively) and its sister company, Priceline (Musement in 2022).

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