Indian Online Travel Agent Joins Ranks of Those Being Investigated for Potential Consumer Abuses
(“MakeMyTrip faces battery of allegations of unfair business practices following merger,” MLex Market Insight on Nov 1, 2019)
Indian (and Nasdaq listed) online travel agency (OTA) MakeMyTrip is the latest online travel platform to face scrutiny over allegedly questionable business practices. The Competition Commission of India (CCI) has ordered an investigation of the OTA following receipt of a complaint from the Federation of Hotel & Restaurant Associations of India (FHRAI). The FHRAI complaint contains a number of allegations that should be familiar to our readers – market dominant position (63 percent of domestic online market), excessive commissions (22-40 percent) and broad rate and availability parity requirements. Findings from the investigation are expected in four to five months.
Japanese distributor Rakuten leads off this week’s Update with a story detailing the circumstances leading to the distributor’s recent commitment to abandon all contractual parity requirements. Enjoy.
It’s Official: Rakuten Eliminates All Parity Requirements
(“Travel platform Rakuten becomes first firm in Japan to commit to remedies by eliminating parity clauses,” MLex Insight on Oct 25, 2019)
Japan’s Fair Trade Commission (JFTC) announced this past Friday that Rakuten (Japan’s largest domestic online travel platform) has officially committed to remove all rate and availability parity obligations in its contracts with the nearly 33,000 hotels listed on its site. The commitment will run for three years, at which point Rakuten’s industry position will be re-examined. It’s unclear what effect Rakuten’s commitment might have on Booking.com or Expedia, both of which were part of the JFTC’s investigation that began in April with raids on each distributor’s Japanese offices.
This week’s OTA Update leads off with stories about two of the largest OTAs seeking to diversify their offerings through the addition of flights. As each of these travel platforms continues to evolve and seek to add more products and services, it won’t be long until there will be little to differentiate them. Enjoy.
Booking.com Takes Off (Literally)
(“Booking.com Launches Flights Through Partnership Across Europe,” Skift Travel News on Oct 15, 2019)
As further evidence of Glenn Fogel’s planned evolution of Booking.com into a full-service travel platform, Booking.com rolled out this past week standalone flight offerings to travelers in the United Kingdom, Germany, Italy, Spain, Ireland, Austria, Belgium and the Netherlands. Travelers previously seeking airline tickets in these countries (and still today in other locations) were re-directed to sister metasearch site, Kayak, where travelers were then re-directed to other OTAs or the airlines themselves for booking. Now, travelers in the eight listed countries can book flights directly on the Booking.com website/application through Swedish travel partner eTraveli (though some travelers are re-directed to eTraveli’s site Gotogate to complete the booking.)
This week’s OTA & Travel Distribution Update features a number of stories on recent changes at Google with regard to the way in which it displays vacation rentals and the market’s response to those changes. Enjoy.
“Alexa, find me tickets to…” Destinations Go Vocal
("How destinations might soon have a voice via Amazon and Google," Phocus Wire on Oct 11, 2019)
Meet Simpleview. The UK-based digital agency that specializes in the tourism industry is building (beta version is expected by year end) one of the first destination-focused applications for Amazon Alexa and Google Home. When finished, the application will allow users to search third-party destination information (e.g., activities, dates and times) via their voice-activated devices.
Welcome to our inaugural issue of Foster Garvey’s OTA & Travel Distribution Update. On October 1st, the combination of Garvey Schubert Barer and Foster Pepper into the new Foster Garvey became effective. The combined firm now boasts 180 attorneys in 6 offices – Seattle, Spokane, Portland, New York, Washington D.C. and Beijing. Personally, I’m thrilled to have played a small role in bringing these two long-standing firms together and excited by the prospect of having twice the resources to better serve our hospitality and travel clients. Details about the combined firm are available at www.foster.com. More to come....
As for the Update, it was a relatively quiet week on the distribution front as opinions and viewpoints regarding the recently announced Expedia/Marriott agreement continue to roll in. What this agreement might ultimately mean for the industry is unknown, but as other distributors and bed banks race to offer hoteliers “similar” intermediary services, there is definitely a wholesale shakeup on the horizon.
Travel Industry Pricing Practices Garner Singapore Regulator Attention
("Online travel sites' drip pricing can raise competition issues, Singapore antitrust agency says," MLex Insight on Sep 30, 2019)
Following completion of its recent investigation into Singapore’s online travel industry, the Consumer and Competition Commission of Singapore (CCCS) released last week its findings and proposed guidelines. The investigation identified four widely used practices by online travel providers that raise consumer protection concerns: (1) drip pricing, (2) pre-ticked boxes, (3) strike-through pricing and (4) pressure selling tactics that lead to a false sense of urgency (many of these same practices led to the recently proposed “principles” in the UK). In an effort to address some of these concerns, the CCCS report contains proposed price transparency guidelines, including mandatory inclusive pricing (all mandatory fees and charges must be included in the headline price). A copy of the CCCS report and proposed guidelines, which remain open to public comment through October 21, can be found here.
Consumer protection concerns are a re-occurring theme in this week’s Update.
Proposed Legislation Targets Resort Fees
("House Bill Would Halt Undisclosed Resort Fees," Benzinga.com on Sep 27, 2019)
This past Wednesday, House members Bernice Johnson (D-TX) and Jeff Fortenberry (R-NE) introduced the Hotel Advertising Transparency Act of 2019. The federal legislation (a copy of which is attached) requires advertised room rates to include all “required” fees (other than taxes). Violations of the Act are deemed to constitute unfair and deceptive trade practices under the FTC Act and subject to FTC enforcement. Given our current political climate, it is doubtful this legislation will ever go far.
A good mix of stories in this week’s Update, including another name change for one of the largest OTAs. Enjoy.
The CMA Declares Victory
("Major overhaul of hotel booking sector after CMA action," Competition and Markets Authority (CMA) (gov.uk) - All Content on Sep 13, 2019)
On Friday, the UK Competition and Markets Authority (CMA) issued a press release touting the number of online hotel booking sites that have now implemented the CMA’s sector wide principles for complying with the UK’s consumer protection laws. According to the CMA, 25 companies – including traditional OTAs, metasearch sites and major hotel chains – have agreed to change how they display rates, inventory and other booking information. What was perhaps most interesting about the press release, however, was the CMA’s announcement that it is co-leading an international effort by consumer protection agencies around the world to examine the hotel industry’s consumer protection law compliance. Details about this international effort can be found on the group’s website - https://www.icpen.org
Fall has definitely arrived here in the Pacific Northwest. This week’s OTA & Travel Distribution Update is below and features stories on TripAdvisor, Booking.com, Vacasa and the soon-to-be-effective, Strong Customer Authentication (SCA). Enjoy.
TripAdvisor Continues to Defend Claims of Fake Reviews
("TripAdvisor defends itself against claim that up to one in seven reviews might be fake," CNN Recent News on Sep 6, 2019)
It seems that every few months we hear claims that some material portion of TripAdvisor’s many guest reviews are suspect. The latest claim comes from UK consumer group Which? Travel, which claims that 1 in 7 reviews for the 10 top ranked hotels in 10 global destinations is fake. According to Which? Travel, it evaluated nearly 250,000 reviews for the top ranked hotels and found “blatant hallmarks” of fake reviews. What is perhaps most troubling about this latest claim, is that many of hotels identified by Which? Travel as benefitting from these allegedly fake reviews had been previously identified by TripAdvisor as using fake reviews within the past year (and in some cases, even penalized for the reviews). Hotels located in the Middle East and Las Vegas were identified as likely being some of the worst culprits.
Ettsa demands Europe-wide harmonisation of hotel booking rules
Travel Weekly (UK) - News on Aug 30, 2019
The European technology and Travel Services Association (Ettsa) has demanded EU regulators enforce tighter standards “on all players” in the accommodation-booking sector. Ettsa welcomed new standards imposed on the sector by the UK Competition and Markets Authority (CMA) which come into force on September 1.
With summer coming to an end, I anticipate a healthy dose of Update worthy items in the weeks ahead.
The Sabre/FareLogix Saga Continues to Unfold
Last week we featured a story detailing the US Justice Department’s planned litigation against Sabre should it carry through with its announced plans to close its FareLogix acquisition last week. By now, everyone knows that the Justice Department made good on its promise and has likely read the dozens of stories detailing the many factual allegations behind the claims. We’ve included a copy of the Justice Department’s complaint for those interested in seeing first-hand the Justice Department’s apparent new approach to anti-trust enforcement where dominant industry members seek to “stamp out” their upstart (and potentially disruptive) competitors.
Greg Duff founded and chairs Foster Garvey’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.