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Umbrella - SeattleInitiative 124 (aka I-124), the ballot measure approved by voters in November 2016 that establishes several new purported "safety and health" standards for hotel employees in the city of Seattle, opens the door for unprecedented exposures for Seattle's hotel operators. Since its enactment last December, Initiative 124 has given rise to several questions about how, if at all, insurance policies might respond to allegations under the new law.

Our weekly client OTA & Travel Distribution Update for the week ending June 16, 2017 is below. Several interesting stories this week...

Price-Fixing Technology the Subject of EU Regulators [PARITY]

("Enforcers Must Watch for New Algorithmic Price Fixing Online, EU Says," Mlex Market Insight, June 15, 2017)
As a follow up to a story we featured back in March of this year, we again this week highlight the work of the European Commission in the area of technological-based price fixing.  Last week, both the European Commission and the EU’s Organization for Economic Co-operation and Development issued reports looking at the growing use of pricing algorithms and their associated anti-trust (price-fixing) challenges.  Although the reports focus heavily on traditional online retailers, online travel agents didn’t escape the regulators’ attention.

This week’s OTA & Travel Distribution Update for the week ending June 9, 2017 is below. This week’s Update features a variety of stories.

Online travel bookingAirline Surcharge Challenged [DIRECT BOOKING]

("IAG Flight-Booking Surcharge Faces Antitrust Complaints," MLex Market Insight, June 6, 2017)
A week or two ago British Airways announced plans to join Lufthansa in its practice of charging travelers who book through an intermediary (rather than direct with the airline) a booking surcharge ($10.00). Last week, the Business Travel Coalition (a US-based managed-travel lobbying group) filed anti-trust complaints with regulators in Spain, the UK and the EU, arguing that British Airways' parent company, International Airlines Group (IAG) was abusing its superior market position by levying the charge. More information to come on this developing story in the weeks ahead.

This week’s client OTA & Travel Distribution Update for the week ending June 2, 2017 is below.  A short update this week...

  • Expedia Defends (Again) Billboard Effect [OTA].  In the latest salvo regarding the existence of the so-called “billboard effect,” Expedia’s Melissa Maher shared last week the results of what Melissa claims is the latest in a string of studies to show that the billboard effect is real.   This latest report authored by Cornell’s, Chris Anderson, contradicts a report sponsored, in part, by AHLA and released in 2015, which claimed that the billboard effect was largely dead.  While this latest report acknowledges that the effect may be less significant, the report relies heavily on the underlying study’s central finding that 65% of travelers who book directly with a major hotel brand visited one or more OTA sites prior to booking.  Further, over 30% of direct bookers began their hotel search with an OTA.  A complete copy of the study is available in the linked article below.

Latest Thoughts on the Billboard Effect
Tnooz, June 1, 2017
Consumer engagement trends continue to evolve, in turn changing how travelers interact with online resources during the path to purchase. For hoteliers, this has made it difficult to determine which sales and marketing efforts lead to demand. 

This week’s OTA & Travel Distribution Update for the week ending May 26, 2017 is below.  A short, but significant update this week.

  • Bi-Partisan Legislation Introduced to Stop Online Booking Scams [OTA].  In an effort to curb the growing problem of misleading and fraudulent online booking websites, U.S. senators and representatives from both sides of the isle introduced legislation on Wednesday, May 17, entitled “Stop Online Booking Scams.”  A complete copy of the proposed legislation is available.  If enacted, the legislation will require unaffiliated, third-party booking sites to post conspicuous notices prior to completing a booking that notify users that the sites are not affiliated with the subject hotel.  Failure to post the required language would constitute an unfair or deceptive act under the Federal Trade Commission Act and allow for a variety of enforcement alternatives.  It will be interesting to see if and how the hotelier in the oval office supports this important legislation.

Legislation Introduced to Combat Online Hotel Booking Scams
Lodging Magazine, May 18, 2017
A group of bipartisan Senate and House leaders introduced legislation aimed at stopping online hotel booking scams that are increasingly impacting consumers and hoteliers alike... 

Our weekly OTA & Travel Distribution Update for the week ending May 21, 2017 is below.  Nothing earth shattering this week...

  • Accor Launches Dynamic Packaging [DIRECT BOOKING].  Joining the ranks of Marriott and other large hotel brands, Accor rolled out last week its previously announced dynamic packaging that allows users of Accor’s website the opportunity to book both hotels and flights.  Through its partnership with MisterFly, Accor is now able to offer packages consisting of rooms at over 200 Accor properties and flights with a variety of network and low-cost carriers.  Dynamic packaging is just one more example of Accor’s ongoing efforts to provide its customers one-stop shopping for their entire travel experience.   Unique to Accor’s package offering, Accor loyalty program members can earn loyalty program points based on the value of the entire package – both hotel and air. 

AccorHotels’ New Flight and Hotel Packages Target Loyalty Members First
Skift Travel News, May 15, 2017
In its attempt to own more of the traveler experience from start to finish, AccorHotels is leveraging the power of its loyalty program — something its peers, no doubt, will also want to do going forward. -Deanna Ting 

This week’s GSB weekly client OTA & Travel Distribution Update for the week ending May 12, 2017 is below. 

  • Rhetoric Over AHLA’s Planned Lobbying Efforts Ramps Up [OTA].  Not surprisingly, Priceline Group CEO Glenn Fogel has a slightly different perspective on the OTA’s influence and control over the online travel agency industry.  Responding to recent reports (see last week’s Update) outlining AHLA’s plans to lobby Trump administration officials over Expedia’s and Priceline Group’s dominance of the online travel agency industry, Glenn objected to AHLA’s characterization of Expedia’s and Priceline Group’s control as a monopolistic.   According to Glenn, such statements, when considering Priceline Group’s share of the global travel industry (as opposed to AHLA’s use of the U.S. online travel industry – a much smaller denominator) constitute “misstatements” and untrue “allegations.”  I suspect Glenn’s comments are not the last that we will see coming out of the OTAs regarding AHLA’s planned campaign. 

Priceline Group CEO Faults Hotel Association for False Allegations
Skift Travel News, May 11, 2017 

There is ample competition among hotels, online travel agencies, and airlines in the U.S. travel marketplace as all of these sectors have seen a spate of consolidation. It may make sense business-wise for these companies, but none of it is particularly good for consumers or competition.


Our OTA & Travel Distribution Update for the week ending Friday, May 5, 2017 is below. 

  • Industry To Again Focus Attention on Distribution Duopoly [OTA].  In an article last week, Bloomberg shared details from an AHLA board meeting where the Association discussed proposed plans for a wide scale lobbying effort of the FTC and incoming Trump Administration officials regarding the practices of on-line behemoths Expedia and Priceline.  A consumer marketing campaign based on the popular Monopoly board game was also discussed.  The AHLA’s proposed plans also call for the Association and its members to better promote themselves as innovative and technologically savvy – words one often doesn’t use when describing the lodging industry.  It will be interesting to watch whether these previously voiced concerns (remember the industry’s response to Expedia’s Orbitz acquisition, anyone?) have a larger effect on Trump administration versus the prior administration. 

Hotels Plan Lobbying Push Over Priceline-Expedia ‘Monopoly’
Bloomberg Markets, May 5, 2017
The U.S. hotel industry plans to step up a lobbying and public relations attack on Expedia Inc. and Priceline Group Inc., hoping to convince consumers and members of the Trump administration that the travel-booking giants are monopolistic. The American Hotel & Lodging Association, an industry group whose membership includes Marriott International Inc., Hyatt Hotels Corp. and Hilton Worldwide Holdings Inc., devised plans for a campaign saying the online travel companies use unfair practices in their search businesses, according to board meeting documents seen by Bloomberg. The trade group intends to lobby Federal Trade Commission officials on the issue and try to ensure that new members picked by President Donald Trump are friendly to hotels, according to the documents prepared for a January meeting of the group’s board.

This week’s OTA & Distribution Update for the week ending April 28, 2017 is below.  Loyalty program updates feature prominently in this week’s Update as well as story on some important changes at Airbnb to lure corporate travelers. Enjoy.

  • TripAdvisor Continues to Evolve [METASEARCH / OTA].  Several important updates from TripAdvisor this week . . .   First, TripAdvisor announced that Intercontinental Hotel Group (IHG) (one of the last major brands to feature its properties on TripAdvisor’s Instant Book) finally joined the booking platform.  Second, TripAdvisor may be returning to its metasearch roots – at least for some users.  According to TripAdvisor, TripAdvisor may no longer give preference to its own Instant Book listings over metasearch links to its partners’ sites.  Priority is now given based on a number of factors including rate, a user’s booking history and other user attributes.  Maybe it is again time to ask whether TripAdvisor a metasearch site or a booking engine – the answer may now depend on who’s asking.

TripAdvisor Instant Booking Gets Very Personal
Skift Travel News, April 27, 2017
TripAdvisor is getting more sophisticated about prodding customers to book hotels on TripAdvisor or to more effectively refer them to partner sites. In an apparently modified strategy, TripAdvisor is finding religion in being agnostic about where its users book hotels.

This week’s OTA & Travel Distribution Update for the week ending April 21, 2017 is below.  This week’s update contains a variety of stories, including a copy of the now much-publicized New York Times article detailing AH&LA’s campaign against Airbnb and Airbnb’s subsequent response.

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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.

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