Duff on Hospitality Law

Resort fees garnered most of the industry’s headlines this past week as California’s governor signed legislation prohibiting hidden fees and the Federal Trade Commission finally released its proposed federal trade regulation – “Rule on Unfair or Deceptive Fees.”  The good news is that both laws appear to apply equally to suppliers and third party distribution platforms.  Highlights:

• • Hopper Terminates Its Supplier Contract with Booking.com.  As noted briefly in last week’s Update, Hopper has indeed terminated its supplier agreement with Booking Holdings.  In an effort to avoid the public fallout (including demands by several of its B2B customers) that occurred following Expedia’s termination of its supplier agreement with Hopper, Hopper elected to strike first and terminate before Booking could do so.  Until Skift broke news of the Booking contract’s termination, most were unaware that Hopper had such a contract.  Days following the Booking contract’s termination, Hopper announced its widespread layoffs, which according to recent reports, resulted in the complete shuttering of Hopper’s home rental offering and the loss of Hopper’s entire B2C team in APAC.  With these recent changes, Hopper’s ability to secure and maintain direct supplier relationships will be critical to its long term success. 

• • The True Value of Paid Search Advertising – At Least According to Booking.com.  And we thought the OTA giant was seeking to move away from paid search advertising.  Think again.  In testimony at the ongoing anti-trust trial against Google, Booking.com Senior Vice President and Chief Marketing Officer, Arjan Dijk, stated that the platform could not stay in business but for the traffic it receives from display advertising on the search engine.  When asked about the relationship between Google and Booking.com, Dijk noted that the relationship is completely one-sided, characterizing the relationship as a benevolent dictatorship. 

• • California Prohibits Hidden Fees.  As we reported a few weeks ago, California governor Gavin Newsom had options when considering how best to address so-called junk fees.  Of the two options awaiting signature – one focused on the hospitality industry and the other drafted more broadly to apply to any industry that features advertised or displayed pricing - the governor chose the broader option.  Effective July 1, 2024, the newly signed legislation prohibits the display of a price that does not include all mandatory fees and charges (excluding shipping charges and government imposed charges).  Note that the legislation does not require that the total price be the most prominently displayed – like other standards.  Under the California legislation, all advertised prices must reflect the “total” price.  The legislation applies equally to suppliers and their OTA counterparts and will require “total” pricing both for hotels located in California (regardless of whom might see the listing) and for hotels located outside California whose listings will be shown to California residents. 

Have a great week everyone.  For those of you attending next week’s hospitality law event in Washington D.C., I hope to see you there.