- Posts by Greg DuffPrincipal
In addition to founding GSB’s national Hospitality, Travel and Tourism group, Greg serves as the Firm’s Chair, a role in which he oversees management of day-to-day operations and strategic direction in partnership with the ...
This week’s Update features an important story on possible changes to keyword contracting practices (or at least a new argument as to why existing practices are no longer appropriate). Enjoy.
Dutch Authorities Scrutinize Keyword Restrictions
("Booking.com and peers may face Dutch scrutiny of ad deals with hotel chains," MLex Insight, June 7, 2019)
In a study issued last week, the Dutch Authority for Consumers and Markets examined hotel booking platforms’ (Agoda, Booking.com, Expedia and others) practice of agreeing contractually with hoteliers not to post advertisements in response to searches featuring the hoteliers’ keywords (i.e. keyword restrictions). According to the Authority, such restrictions are likely to lead to higher prices on websites, which ultimately harms consumers. Although the study did not identify plans for a formal investigation or recommend sanctions, those of you seeking keyword restrictions (or seeking amendments to existing restrictions) should expect to hear a lot about this.
Airbnb Begins Integration of Traditional Lodging Products
("Airbnb Tests Hotel Integration by Adding Some HotelTonight Partners," Skift Travel News, May 29, 2019)
As a critical first step in its integration of the newly acquired HotelTonight, Airbnb has begun adding limited hotel inventory from some of HotelTonight’s hotel partners. At the same time, Airbnb has eliminated guest fees on new hotel listings (making the site more competitive with the host-only fee models of Booking.com and Expedia) and begun cross promoting its hotel inventory on both the Airbnb and HotelTonight platforms. Although full integration of the HotelTonight inventory on the Airbnb platform will take time (and require the platforms to reconcile their many differences), many believe it is only a matter of time before the former exclusively alternative accommodation platform transforms itself into fully fledged online distribution channel. Only time will tell...
Booking.com Amends Its Commission Policies
("Booking to Charge Commission on Resort Fees in Major Shakeup for Hotel Revenue," Skift Travel News, May 20, 2019)
Although it was a relatively quiet week in the distribution world (at least in terms of the number of noteworthy stories), this first story garnered a lot of attention and deservedly so. We had heard rumblings over the past few weeks that Booking.com was notifying hotels of its plans to charge commissions on hotels’ resort fees and other guest charges (e.g., Wi-Fi charges) irrespective of whether Booking.com or the hotels collect the charges. These rumblings became a reality as the many usual outlets began featuring articles detailing Booking.com’s plans. According to these reports, US hoteliers should see the additional commission charges beginning in June. Hoteliers need to review their contracts carefully to determine whether this unprecedented move is contractually permitted.
The week’s stories remind us how quickly things continue to change in the distribution landscape. Enjoy.
State Attorneys General Exploring Alleged Anti-Trust Violations
("U.S. state AGs looking into Expedia Group, hotel practices in antitrust probe," Reuters Company news, May 9, 2019)
News of state attorneys generals’ investigation into hoteliers’ online practices has made headlines these past two weeks. Initiated by the Utah state attorney general in 2017 (and now involving an unidentified number of additional state attorneys general), the ongoing investigation is centered on hoteliers’ alleged agreement to not bid on each other’s keywords (the same claims made by Travelpass in its pending Texas litigation).
This week features another travel-shortened OTA & Travel Distribution Update. We will return with our regular format next week.
Booking.com wins Swedish court appeal on contract terms with hotels
MLex Insight on May 9, 2019 (subscription required)
Booking.com has overturned a Swedish ruling that ordered it to change its contract terms with hotels. The Stockholm Court of Appeal ruled today that the Dutch company was not in breach of competition rules, annulling a decision made last July by a lower competition court. Today's decision can't be appealed further.
Expedia Under Investigation by Utah Over Hotel Collusion Claims
Bloomberg Quint - Stories on May 9, 2019
Expedia Group Inc. is under investigation by the Utah attorney general for allegedly conspiring with the biggest U.S. hotel chains to suppress competition in online travel booking. The office is investigating whether Expedia conspired with Marriott International Inc., Hilton Worldwide Holdings Inc. and other hotel companies to manipulate.
Misleading online ads and EU dual-pricing ban scrutinized by Dutch Authority
Bloomberg Quint - Stories on May 9, 2019 (subscription required)
Companies conveying a false impression of scarcity to consumers could face more regulations in the Netherlands, the head of the Dutch Competition said.
New Hotel Booking Platform Centers on Sustainable Travel
Lodging Magazine on May 8, 2019
Not-for-profit hotel association Bee + Hive is launching a new booking platform centered around hotels that offer sustainable travel experiences. Guests that want to travel responsibly and adventure while on vacation can plan a trip based on activities, locations, and sustainable resources.
While Marriott’s entrance into the vacation rental business garnered most of the attention this week (we’ve included one of the many stories written this week about Marriott’s move), a few other stories warranted inclusion in this week’s Update.
We’ll be back with our usual format next week.
This week’s Update features a story on an issue – OTA cancellations – that we’ve been hearing a lot about recently. Enjoy.
Further Details Emerge on Japanese Regulators’ Investigation into Rate Parity
("Comment: Booking.com, Expedia and Rakuten in Japanese regulator's sights over price-parity requirements," MLex Insight, April 22, 2019) (subscription required)
In a follow up to a story we featured a few weeks ago, this past week more details (and speculation) emerged about the recent raids by the Japan Fair Trade Commission (JFTC) of Expedia, Booking.com and Rakutan. According to reports, the Japanese investigation is likely to focus on both broad parity (indirect and direct channel parity) and so-called “narrow” parity (direct channel parity only), which was widely used by Expedia and Booking.com as a compromise to satisfy EU regulators’ concerns regarding the OTAs’ rate parity practices several years ago. Japanese regulators have allegedly questioned whether the “narrow” parity compromise truly solves the anti-competitive effects of rate parity. If the results of the JFTC’s investigation into Amazon and its pricing parity practices from several years ago offers any indication as to how this newest investigation might turn out, hoteliers may soon find themselves free of rate parity (indirect and direct) throughout Japan. More to come . . .
This week’s Update features a number of stories on important developments in the EU. Enjoy.
Sabre’s Previously Announced Acquisition Runs Into Regulatory Trouble
("Sabre's Farelogix purchase draws 'killer acquisition' questions from UK watchdog," MLex Insight, April 19, 2019) (subscription required)
Several months ago, we featured a story detailing the evolution of the airline distribution industry and in particular, the growing rivalry between legacy (read: old) global distribution systems (like Sabre) and airlines they serve over airlines’ attempts to bypass the global distribution systems through the use of emerging technologies (like the new distribution capability (NDC) offered through Farelogix). In a somewhat ironic move, Sabre announced plans in November of last year to acquire Farelogix for $360 million. The US Department of Justice and now the UK’s Competition and Markets Authority (and possibly other EU regulators) have begun to ask questions about the proposed deal and its potentially stifling effects on competition within the distribution industry (aka “killer acquisition”). There are many potential lessons to be learned here for the distribution industry generally, which is why we will continue to feature stories updating the status of Sabre’s efforts.
Other than the news that Marriott and Expedia completed negotiations over their new contract (congratulations to Marriott for getting this behind you), this past week was relatively quiet on the distribution front. Enjoy.
Traveloka Challenges OTA Acronym
("Southeast Asia’s Online Travel Agency Traveloka Moves Into Food, Wellness Choices," News, APril 10, 2019)
Indonesia-based Traveloka is challenging what it means to be an online travel agent. The OTA recently added tours and activities to its traditional travel offerings and has begun targeting users in its domestic markets through the addition of lifestyle products (e.g., food, beauty, movies). In Indonesia, where Traveloka’s “discovery” platform was first introduced, users can purchase discounted restaurant vouchers, read reviews of local restaurants, and book a wide range of lifestyle products and services offered by many of the country’s traditional retailers. Content for the platform is sourced directly from suppliers and vendors or indirectly through other third-party channels. Traveloka plans to roll out its discovery platform to other Southeast Asian countries, including Australia. If attempts by Traveloka (and AirAsia) to diversity their user base through the addition of lifestyle products and services proves successful, how long will it be before the more traditional global distributors follow their lead?
Expedia Unable to Stop Withholding of Critical Airline Data
("U.S. judge rules against Expedia in United Airlines fare listings lawsuit," Reuter US News, April 5, 2019)
In the continuing saga of United Airline versus Expedia, a federal judge in NYC ruled last week that Expedia was not entitled to a court order prohibiting the airline for cutting off access to critical fare and schedule data following the September 30 contract termination. According to the court, while Expedia was able to demonstrate a “likelihood of success” on the merits of its breach of contract claim, it was not able to satisfy the requirements needed for an immediate injunction. More to come...
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.