Duff on Hospitality Law

This week’s Update features a variety of stories, including updates on Sabre’s attribution sales efforts and the growing importance of Booking.com’s mobile application in the U.S. Enjoy.

Sabre Moves Forward With Attribution-Based Sales
(“Sabre on Hospitality Marketplace Development, Attribute Selling,” June 14, 2022 via Phocus Wire)
For some time now, clients have complained that Sabre’s (and other GDS providers’) innovation efforts have largely been focused on airlines, leaving hoteliers to fend for themselves with the old legacy GDS platforms. According to Sabre, that “airline-first” approach may soon change as Sabre continues its efforts to launch its new intelligent retailing platform. According to Sabre’s Senior Vice President of Sabre Hospitality Solutions, Frank Trampert, Sabre’s new platform will allow hoteliers to create personalized offers like those found on traditional retail websites (e.g. Amazon). Hotel rooms will remain central to the platform, but other ancillary amenities and services will be available for booking at the same time. This month, Sabre plans to introduce 23 features as part of the platform’s initial product test. Pilots of the platform will begin in October with a general release of the platform scheduled for early 2023.

This week’s Update features two stories detailing fintech’s growing influence on online travel. Regular readers of our Update know that we’ve featured a number of fintech and payment related stories this past year, with multiple stories on Hopper, Booking.com and its much discussed payment platform, Visa, and others. And if you need any further proof of the growing influence (or likely future influence) of payments on online travel, one only need to review the list of regular readers of our online travel blog on JD Supra, which reads like a who’s who of the payments world – American Express, Capital One, Bank of America, JP Morgan Chase and Deutsche Bank. I hope you enjoy this week’s Update.

Musafir Partners with Mastercard to Launch Innovative Payment Options
(“UAE-Based OTA Musafir Signs with Mastercard,” May 27, 2022 via Business Travel News)
Three weeks ago, it was Agoda announcing its partnership with Visa. Last week, Dubai-based online travel agent Musafir announced its own exclusive partnership with Mastercard. According to the announcement, the parties will work together to “digitize payment flows,” launch new innovative payment products and provide expense management tools for Musafir’s corporate customers. Musafir claims to be the region’s first O.T.A. with 1800 businesses participating on its business booking platform.  For more details on the growing influence of fintech products on online travel, make sure to read the story below from Wit, detailing Amadeus’ recent Travel Fintech Investment Trends 2022 report.  

Happy New Year...Enjoy. (insert intro)

Apple Seeks to Move Forward with Controversial Privacy Requirements | January 2021 
(“Apple to start policing privacy update for app developers' ad tracking,” January 18, 2021 via MLEX Insight) (subscription may be required)
Last fall, we featured a story detailing Apple’s plans to update many of its privacy requirements as part of its release of its newest operating system (iOS 14). Among other things, the new requirements would require applications to obtain users’ express consent (via pop-up messaging) to applications tracking their online activities. Responding to industry concerns over the new requirements and their likely effect on personalized online advertising, Apple agreed to delay rollout of the new privacy requirements until early 2021. Early 2021 is here, and Apple has announced plans to proceed with the rollout this spring. The approaching requirement has now prompted online advertiser industry groups in France to file claims with the French antitrust authority to enjoin the rollout alleging that Apple’s changes are not motivated by a desire to better protect its users’ privacy (as claimed by Apple), but instead a desire to assert even more control over access and use of its platform. More information is sure to come.     

This week’s Update features several stories on the big online travel newsmakers of last week – Google and Kayak. Enjoy.

Google Once Again Embraces Organic Search and Eliminates Hotel Listing Fees
(“Tripadvisor’s New Subscription Service Edges the Company Toward Online Travel Agency Status,” March 7, 2021 via Skift Travel News) (subscription may be required)
(“Google eliminates fees for hotel booking links”, March 8, 2021 via Phocus Wire)
(“Google Drops Costs for Hotels and Resellers to List Rates in Price-Comparison Search”, March 8, 2021 via Skift Travel News) (subscription may be required)
(“VIDEO: What Google's overhaul of hotel booking ads really means”, March 9, 2021 via Phocus Wire)
Was it a response to Tripadvisor’s recently announced roll out of its “free” subscription program, Tripadvisor Plus? Perhaps it was a response to the many antitrust claims filed against Google late last year by the U.S. Department of Justice and state attorneys general. Or is it simply Google’s next step toward total world domination (or at least domination of hotel metasearch)? Regardless of the reasons behind its change, Google’s recent announcement came as a surprise to many. While the industry continues to analyze the significance of the change (see our multiple stories linked above), here’s what we know: Google is adding two new organic slots/links (underneath four paid slots) to users’ search results when they search for accommodations in a particular location. The two new slots will be available to participating hotels, online travel agents or other booking sites without charge. According to Google, the ranking of these free slots will be based on an algorithm that considers price, click-through rates and the landing page experience, but not on any existing commercial relationship with or payment to Google. The links themselves will continue to be provided via feeds from partners, including hotels, online travel agents and integration partners. Who said search engine optimization (SEO) was dead?

This week’s Update features stories on Google’s recently announced online third-party tracking changes, the (permanent) nature of virtual experiences, growth of “digital” kitchens and important updates on what group events may look like post pandemic. For those of you who missed our mid-week update on Tripadvisor’s troubling plans for obtaining discount rates for its Tripadvisor Plus subscription service, we’ve also included that story again. Enjoy.

Are Virtual Experiences Here to Stay?
(“Why virtual tours and activities will stick around after the pandemic,” March 4, 2021 via Phocus Wire)
One small Seattle-based company seems to think so. Even months before the pandemic began, Amazon was working on its virtual experiences offering. With the launch of Amazon Explore in September, Amazon joined Airbnb, Viator and Klook in offering “risk-free” virtual experiences and activities. Now with the pandemic’s end in sight, members of the travel industry are asking whether these travel alternatives will remain relevant. Amazon and other experience platforms believe that these offerings will continue to be used as both an alternative to travel and as a compliment to travel (think Rick Steves). Actual suppliers of the virtual experiences report mixed results, though most recognize they may play an important sales and marketing function in the future. What will be most interesting to watch in our post-pandemic world is whether lessons learned (and the supplier connections made) by Amazon while offering virtual experiences will lead the behemoth e-commerce platform to transition to actual experiences and activities.

This week’s Update takes a close look at Booking Holdings’ recent fourth quarter and year-end earnings release. Enjoy.

Booking Holdings’ Financial Results
(“Booking Holdings focuses on payment platform, connected trip and U.S. growth as 2020 revenue drops 55%,” February 24, 2021 via Phocus Wire)
(“Booking Holdings, Inc.'s (BKNG) CEO Glenn Fogel onQ4 2020 Results - Earnings Call Transcript,” February 24, 2021 via Seeking Alpha)
(“Booking Holdings Reports Financial Results for 4th Quarter and Full-Year 2020,” February 24, 2021 via Booking Holdings)

Booking Holdings (including brands such as Booking.com, Priceline, Agoda, Kayak, RentalCars.com and Open Table) released its fourth quarter and full-year 2020 financial results last week.

Highlights from the release include the following:

• • Gross bookings dropped 63 percent in 2020 to $35.4 billion
  • Total revenues dropped 55 percent in 2020 to $6.8 billion
  • Room nights booked dropped 58 percent in 2020
  • Adjusted EBITDA dropped 85 percent in 2020, though even with this drastic drop, Booking Holdings remained profitable on an adjusted EBITDA basis in 2020 ($880 million)
  • Marketing expenses in 2020 dropped sharply to $2.2 billion (down from $5 billion in 2019)
  • Company staff were cut by approximately 23 percent, resulting in approximately $330 million in personal expense savings (no additional cuts are currently anticipated)

For readers who have been following our Online Travel Updates since its inception, we thank you for your continued support. In this year of 2021, June will mark our six-year anniversary of publishing these weekly updates dedicated to keeping our readers up-to-date with legal, regulatory, and market and industry trends related to the online travel space. We hope you continue to find them informative and helpful as the online travel industry keeps evolving.

This week’s Update includes several stories spotlighting a few Expedia Group companies – Expedia, Trivago and Vrbo. We’ve also included another story on the so-called “digital health passports.” Whether you agree with their use or not, we suspect the passports will be part of travel (and life) for the foreseeable future. Over the past several weeks, we’ve spent a lot of time with clients considering the role of COVID-19 testing, the pros and cons of offering testing to guests as an onsite amenity, and how best to leverage the test results (and soon vaccination records) via the many available digital health passports. This is one part of our practice that we would have never anticipated delving into just 14 months ago. Enjoy.

Unlike our short Update last week, this week’s edition is filled with several important stories.

Have a Unique Cancellation Policy? Not Anymore
(“Booking.com changes hotel cancellation and deposit policies,” February 5, 2021 via Hotel Owner) (subscription may be required)
Last week, Booking.com announced plans to limit the number and types of cancellation, and advance deposit policies that its platform will support. The change takes effect on April 6, 2021. This is not the first time Booking.com has announced its own approach to cancellations regardless of the policies maintained by its hotel supplier partners.

As evidenced by our list of stories below, it was a relatively quiet week for online travel.

Tripadvisor Introduces Virtual Voice Tours for Amazon Alexa
(“Tripadvisor creates virtual destination tour via Amazon Alexa,” January 29, 2021 via Phocus Wire)
Working with tourism authorities in Abu Dhabi, last week, Tripadvisor launched what it claims to be the first virtual destination voice tour for Amazon Alexa. Users in the United Kingdom can summon the voice tour by asking their Alexa-enabled device “to explore Abu Dhabi.” The voice tour is part of a larger campaign between Abu Dhabi and the review/distribution platform and, according to Tripadvisor, the feature will be made to other destination partners.

This week’s Online Travel Update features updates to a number of stories that we covered previously – online vaccination records, Apple’s privacy policy and the many challenges associated with regulating online platforms’ algorithms.

Expedia Dominates Early 2021 Television Advertising
(“Vrbo and Expedia Dominate Online Travel TV Advertising in the U.S. So Far in 2021,” January 21, 2021 via Skift Travel News) (subscription may be required)
Although overall television advertising spending by OTAs (online travel agencies) is dramatically down this year (approximately 81 percent lower), there has been a change at the top of the television advertising leaderboard. At this time last year, Booking.com, dominated U.S. television advertising among its OTA competitors. This year, Expedia Group companies, Vrbo and Expedia.com, have dominated U.S. television advertising spending with their common “togetherness” campaigns. Some may say that the effort at a time when COVID-19 infections across the country are an all-time high is a crazy waste of money. I disagree. I believe the campaign is entirely consistent with Expedia Group’s previously announced plans to re-focus its efforts on its core travel businesses by ramping up advertising while its largest competitors lay low.