The future has arrived, and it has a strange sense of humor. Pokémon Go — an “augmented reality” game that requires players to travel to real world locations to capture imaginary monsters through apps on their mobile devices — is changing how millennials choose their travel destinations and hotels. These games have inspired a new generation of travelers, and present novel opportunities to businesses in the hospitality sector.
Hospitality industry stakeholders who host sites for online reviews or rely on review sites such as Yelp, Trip Advisor, Urban Spoon, or Oyster, may take comfort in the recent Ninth Circuit decision regarding the liability of the publishers of those reviews. See Kimzey v. Yelp! Inc., No. 2:13-cv-01734 (U.S.D.C. Wash. Sept. 12, 2016). But, there is an argument to be made that the protections afforded under Section 230 of the Communications Decency Act (“CDA”) may be wearing thin. As the industry looks for more ways to leverage data harvested from online reviews, it is slipping out from the protective umbrella afforded to “passive hosts” of user generated content.
On Monday, July 25, 2016, the Seattle City Council unanimously voted to place Initiative 124 (“I-124”), entitled the “Seattle Hotel Employees Health and Safety Initiative,” on the November 2016 ballot. Many voters will likely not even bother to look beyond the title before casting their vote. But they should. There is much more to this initiative than the title suggests.
I-124 is comprised of five substantive parts, plus definitions and a “miscellaneous” section (containing perhaps the most important piece of the entire initiative – more on that in the following paragraph). Each of these parts has an admirable statement of purpose (e.g., “Protecting Hotel Employees from Violent Assault and Sexual Harassment”), and a slew of requirements that are allegedly aimed at achieving that purpose. But, as with the title of the entire initiative, each part contains language that prompts countervailing concerns.
The annual HSMAI Digital Marketing Strategy Conference was held in New York, NY on February 17, 2016.
For those of you who attended, or did not attend the conference, my presentation, “Distribution Parity: Where Do We Go From Here?”, is available below. It features an update on recent worldwide parity developments (through December 2015) as well as some practical distribution contracting recommendations.
Free to contact me if you have any questions.
Since their official unveiling in December 2014, the FDA’s final menu-labeling rules have given rise to a multitude of questions from hospitality businesses who wonder how to comply or whether they must comply at all. The FDA, in turn, appears to be trying its level best to provide enough time and guidance to ease these businesses’ transition to the new rules. First, the FDA extended the deadline for compliance by a full year from December 1, 2015 to December 1, 2016, citing the agency’s extensive dialogue with chain restaurants, grocery stores, and other members of the hospitality industry.
Bernice Johnson Blessing is an Associate in GSB’s Labor and Employment, and Hospitality and Corporate Law practice group. She is also the newest member of the hospitality team and has had a distinguished career in leading human resources teams for hotel management companies and major hospitality brands for more than 15 years. You can reach Bernice at firstname.lastname@example.org or 206.816.1465.
From franchisers and companies hiring workers through staffing agencies, to participants in the so-called “sharing economy,” companies and individuals today enter into a variety of contractual arrangements to reduce costs and to maximize available capital, flexibility, talent and efficiency in delivering goods and services. The recent decision of the National Labor Relations Board (“NLRB” or “Board”) in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015), may change how many of these relationships function, and even, whether some of them are now too risky for some participants.
A distributor is knocking on your hotel restaurant’s door, offering key chains from a hot new distillery for your customers. A brewery just dropped off coasters for use in the restaurant’s bar. And a winery offered cork screws for your sommeliers.
As a responsible retail licensee, you know that most states tightly govern the relationships among liquor retailers, manufacturers, and distributors.
But where’s the line? What kind of “swag” and other valuable items can your hotel restaurant accept for free without running afoul of the law? To find out, read on.
Our friends (and former contributors) at Seattle-based BrandVerity produced an infographic showing that the average hotel brand is losing 26,500 website visitors on direct web traffic each month, leading to a real loss in revenue as these bookings are made elsewhere. Their findings are based on the information found in the hotel selection of their quarterly report on The State of Branded Keywords in Paid Search.
The report assesses the paid search landscape on branded keywords of over 250 consumer-facing brands. Looking at Q1 2015, it found that trademark bidding has cost the typical brand tens of thousands of visitors each month. The full report is available for download today at https://www.brandverity.com/branded-keywords/.
The Competition & Markets Authority (CMA), which investigates business practices and enforces anti-competition and consumer protection legislation in the UK, just released a report and call for information that signals more scrutiny for online reviews and endorsements. Though the report does not identify companies or sites that will be the subject of investigation, it expresses a general concern that a number of businesses are breaking the law. The report does not point fingers, but it’s worth noting that the hospitality industry is mentioned several times as an area of particular interest, based in part on a survey conducted by the British Hospitality Association in March of this year. Consumer reliance on reviews for vacation travel, the relatively higher cost for hospitality related services, and the sensitivity of the hospitality related services to negative reviews were cited by the CMA as reasons why the industry is an area of particular concern.
UK regulations are, of course, aimed at protecting UK consumers, but U.S. companies are well advised to take heed of the report’s warnings and recommendations because, as the report notes, the CMA plans to assume the Presidency of the International Consumer Protection and Enforcement Network (ICPEN), of which the U.S. is an active member. And, the practices flagged by the CMA, as well as the steps businesses can take to address the CMA’s concerns, closely parallel those identified by the Federal Trade Commission (FTC).
So, whether your customers are here in the States or abroad, the following practices may result in an investigation by the CMA (or FTC):
- Writing or commissioning fake negative or positive reviews.(Your marketing firm could also be on the hook for setting up fake Twitter or Facebook accounts to submit reviews).
- Cherry-picking positive reviews or suppressing negative reviews. (Your website user agreement or comments policy may well allow you to edit or delete user content containing expletives or other inappropriate material, but if those expletives all happen to be in negative reviews of your product or service, you need to consider what disclosures may be necessary to ensure the reviews as a whole are a fair and accurate representation of the actual comments received).
- Failing to disclose paid reviews or endorsements. (Whether its cash, a free dessert, or award points, you need to disclose compensation or incentives given to individuals submitting reviews or endorsements).
The best practices recommended by the CMA similarly echo the FTC’s guidelines:
- Be clear with your marketing department or outside marketing firm that they may not write or solicit reviews. Documenting that parameter in a letter or agreement will provide a paper trail that could prove handy down the road.
- If you do provide compensation or incentives for reviews or endorsements, be sure that that fact is clearly disclosed, e.g., by using a hash tag like “#paid ad.”
- Promptly publish all reviews, even negative ones. If reviews have been edited or deleted (e.g., to remove expletives), clearly disclose your policy or basis for doing so.
- Establish a procedure (whether in house or with your marketing firm) for detecting and removing fake reviews.
In conjunction with the report, the CMA published summaries on how to comply with UK consumer protection law on online reviews and endorsements.
Ultimately, the CMA and FTC share a common purpose: to protect consumers from unfair or deceptive business practices by protecting the consumer’s ability to make meaningful choices. Disclosure of the connection between a review or endorsement and its source (i.e., an independent individual or a sponsoring company) is essential to meaningful consumer choice. So, in devising your marketing strategy, especially if it includes a forum for consumer reviews, ask whether you’ve given your customer the information necessary to make a meaningful decision about your product or service. Doing so not only helps build brand loyalty, it could help avoid an investigation by the CMA (or FTC).
In today’s post, Malcolm Seymour, a member of our New York office who specializes in commercial litigation and regulatory enforcement actions, discusses the benefits and legal considerations for those who provide free WiFi to their hospitality customers.
Whether booking a hotel, reserving a flight or choosing a café, hospitality customers are increasingly influenced by the quality and availability of high-speed wireless internet networks (“WiFi”) at their chosen destination. One third of all hotel guests, and two thirds of all business travelers, say that they would refuse to return to a hotel with substandard WiFi. And with the advent of free web services that monitor hotel WiFi performance, it is easier than ever for customers to vote with their feet.
But the road to free WiFi is not without peril. Hosts of open WiFi networks risk loss of service, or potential liability under United States and international copyright laws, for infringing acts committed by their users.
The good news is that hotspot operators in the United States can, through the adoption of best practices, shield themselves from most legal liability under the Digital Millennium Copyright Act (“DMCA”). Under the DMCA, Internet service providers -- including WiFi hosts -- are not supposed to be liable for copyright infringements committed by users if they act as “mere conduits” for user traffic. The DMCA creates a safe harbor for such conduits, provided they meet several criteria:
- The WiFi host must not initiate the transmission (upload or download) of information over their network;
- The host must not mediate this transmission in any way, i.e. by specifying a recipient for the transmission, specifying the material to be transmitted, or modifying the content transmitted;
- The host must not store copies of the content transmitted for longer than necessary to complete the transmission;
- The host must adopt and reasonably implement a “take-down” plan for responding to notices of infringement and for banning repeat infringers; and
- The host must not interfere with standard technical measures used for copyright protection, such as watermarks on images, password protection, or other digital rights management devices.
Hotels should ensure that their wireless networks are enabled to comply with these requirements, especially when it comes to suspending service to repeat infringers. Hotels that have implemented reasonably thorough policies to guard against copyright infringement should be safe if litigation erupts over piracy committed by a hotel guest or visitor.
The bad news -- we are lawyers after all -- is that copyright violations can still cause law-abiding hotspot operators big headaches with their service providers, even placing them at risk of service suspension. What’s more, copyright law varies between countries, and not all travel destinations have kept pace with the United States in modernizing their laws to accommodate open sharing of WiFi connections.
Germany is perhaps the most notorious outlier, thanks to a 2012 decision and subsequent enactment that hold operators of unsecured WiFi networks liable for the copyright infringement of their users. Backlash against these laws has prompted Germany’s current parliament to propose a repeal of this law. New Zealand is another destination known for its harsh “three strikes” rule, which may necessitate implementation of special software protocols to prevent peer-to-peer sharing over WiFi networks.
With the rise of smartphones and handheld devices, hospitality customers increasingly view open WiFi as a necessity rather than a luxury. Customers, while rarely grateful for strong service or fast connection speeds, will notice and complain if service is lacking. But as these examples show, operating a WiFi hotspot introduces serious risks that can only be mitigated by someone with knowledge of local law.
Greg Duff, Editor
Greg Duff founded and chairs GSB’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.