This week’s Update features a story on relative newcomer to third party distribution (Southwest Airlines) and includes, yet again, another update on the on-again/off-again saga of Booking.com commissions. Enjoy.
Southwest Airlines Takes a Contrarian Approach
("Southwest Airlines adds content to two GDSs," Phocuswire on Aug 7, 2019)
In an era when airlines are seeking alternatives to traditional distribution channels, renegade Southwest has again decided to take a different approach. Southwest announced last week plans to provide content and full booking capabilities to two key global distribution system providers – Amadeus and Travelport. The move, according to Southwest president, Tom Nealon, rounds out Southwest’s three-legged distribution strategy for business travel – direct, Swabiz and now, GDS. The addition of traditional GDS to Southwest’s distribution arsenal is expected to add $10-$20 million in additional revenue during the last half of 2020.
This week’s Update features a wide variety of stories, including an update on our own Northwest-based short-term rental management company, Vacasa, which is growing by leaps and bounds. Enjoy.
Sabre Vows To Fight EU Allegations
("Sabre will 'vigorously defend against any allegations' of rule-breaking in EU probe," MLex Insight on Aug 2, 2019)
In its recent US securities filing, Sabre has pledged to “vigorously defend against any allegations of anti-competitive activity” by the European Commission in connection with the Commission’s anti-trust probe of both Sabre and its primary competitor, Amadeus. Since November last year, the European Commission has been investigating the two market leaders’ contracts, focusing specifically on whether the contracts contain provisions preventing airlines from providing more information to rivals’ distribution systems or even prohibiting use of rival distribution systems. According to questionnaires sent to airlines earlier this year as part of the investigation, the European Commission is trying to determine the significance of the two companies on ticket distribution and whether that significance influences their pricing and contracting practices.
This past week was relatively quiet in the distribution world as evidenced by the few stories below. Enjoy.
Booking.com Relaxes Keyword Restrictions on Its Trademarks
("Booking.com relaxes keyword bidding clause with hotels," Phocus Wire on Jul 22, 2019)
In a purported effort to comply with a recent unidentified ruling in the EU, Booking.com sent notices to many of its hotel suppliers this past week advising them that existing contract restrictions prohibiting the suppliers from bidding on Booking.com’s keywords (e.g., Booking.com) were being removed. While the change may make for interesting headlines, it is doubtful that many suppliers will race to their nearest search engine to begin bidding on Booking.com’s keywords. Unfortunately, suppliers should expect to hear a lot more about this change and Booking.com’s need for reciprocity while negotiating critical keyword protections on their valued marks in the future.
This week’s Update includes additional background information regarding the ongoing resort fee saga, which many of you requested. Enjoy.
Resort Fees – Part Two
Many of you have reached out over the past week to ask for more information on the pending litigation targeting Marriott and the events that led up to the claims. We’ve attached copies of the Marriott complaint as well as the FTC report on resort fees that was issued back in January 2017. Please let us know if anyone has questions or would like more information.
This week’s Update features a variety of topics – OTAs, short-term rentals and loyalty. Enjoy.
The Rising Importance of Metasearch
("How metasearch became the most important marketing channel in travel," Phocus Wire on Jul 10, 2019)
Online marketing spend data reported this past week by European-based Mirai demonstrates the growing influence of metasearch. Highlights from the report include the following.
- Prior to 2017, keyword-based display advertising on Google, Bing and other search engines captured the majority of online marketing investments.
- That phenomenon changed in 2017, when investments in metasearch for the first time exceeded traditional display advertising. Since that time, the amount of investment in metasearch has continued to grow.
- Among the many available travel-oriented metasearch platforms, Google (Google Hotel Ads) is the clear favorite (75% of metasearch investment). Google’s success can be attributed to its ever evolving (and improving product), the subtle integration of search and Google Hotel Ads and the ever-expanding influence of Book on Google.
This week’s travel-shortened OTA & Travel Distribution Update features two stories detailing two recently announced unique partnerships, one between Accor and Air-France-KLM and the other between Expedia and Lufthansa. We also update the status on Booking.com’s continually evolving plans to charge commissions on resort fees and other similar service charges. Enjoy.
Booking Holdings Delays Charging Hotels Resort Fee Commissions in Major Reversal
Skift Travel News on Jul 2, 2019
Booking Holdings, which had announced it would begin charging hotels in the United States commission on their resort fees, has delayed implementing the new policy, Skift exclusively learned. The company, which owns brands including Booking.com, Priceline, Agoda and Kayak, is considering delaying the new commissions until January 1, according to multiple sources. The tentative new schedule for implementation — if the company goes through with it all — is subject to change. It is believed that Booking Holdings could be using the pause to reevaluate the whole policy.
This week’s Update highlights two additional countries’ efforts to investigate alleged abuses by powerful global online platforms, including widely used online travel platforms. Enjoy.
Indian and South Korean Regulators Examine Practices of Online Platforms
("Competition issues in e-commerce the focus of study by Indian antitrust regulator," MLex Insight on Jun 28, 2019)
Regulators in India and South Korean separately announced plans last week to study the practices of global ecommerce platforms (including those serving the travel industry) and their effect on local competition. Both studies include examinations of the relevant markets and the business models and practices, including contracting practices, of the largest players. Initial results of these studies are expected as early as the end of August.
Hopper Focuses on Hotel Bookings
("Hopper ramps up hotel booking with global private rates and price tracking," Phocus Wire on Jun 20, 2019
Over the past few years, we have featured a number of stories about Hopper and its many successes – though primarily in airline bookings. Now, Hopper is seeking to leverage some of that success in its pursuit of hotel bookings. Hopper currently features over 270,000 hotels worldwide and sources rooms from those hotels through both intermediaries and direct supplier relationships. Armed with its price predictive technology, Hopper claims to be able to provide users accurate rate forecasts for the hotels it features as well as unique “private” rates that are otherwise unavailable. Unlike typical booking channels, which generally promote and market their offerings broadly, Hopper derives 90% of its bookings through personalized “private” push notifications that are powered by Hopper’s personalization AI.
The latest OTA & Travel Distribution Update features a number of stories highlighting ongoing or recently resolved regulatory complaints or investigations. Enjoy.
Nustay Seeks EU Regulatory Review
("Expedia, Booking.com targeted in EU antitrust complaint by Nustay," MLex Insight, June 11, 2019)
Dutch booking platform, Nustay, filed a complaint last week with the European Commission alleging that the practices of Expedia and Booking.com illegally restrict competition in the market. The alleged practices at issue include imposing severe consequences (e.g., reducing a hotel’s ranking or transferring the hotel to Booking.basic (Booking.com only)) on hoteliers that seek to offer more competitive prices through alternative (including Nustay) channels, which Nustay alleges, constitutes enforcement of a “new type” of wide parity requirement.
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.
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.