Not a moment too soon, Seattle’s Office of Labor Standards on Tuesday provided mandatory employee notice posters for hotel worker protections that take effect Wednesday, July 1. Seattle hotels must post these notices immediately.
Four sweeping new ordinances affect Seattle hotels with 60 or more guest rooms. The ordinances require panic buttons for employees, set maximum housekeeping workloads, require larger hotels to fund employee healthcare coverage, and offer employees greater job security. (Read Foster Garvey’s prior coverage of these ordinances.)
This week’s Update contains a number of stories on the growing significance of metasearch, particularly as properties compete for the attention of even fewer travelers. However, we begin this week’s Update with a story on EDreams, which has been successfully growing its subscription-based travel model. Enjoy.
EDreams Subscription Model Adds Hotels
(“EDreams Now Has a Half Million Paying Travel Subscribers,” Jun 17, 2020 via Skift Travel News)
Since November, EDreams’ Odigeo has added 50,000 members to its subscription services, bringing its total membership to close to 500,000. Although the Barcelona-based online travel agency began with flights only, the service has now expanded to include hotels (adding 2.1 million hotels since November). For those of you unfamiliar with the service, EDreams’ two brands – Edreams Opodo and GO Voyages – offer members travel discounts in exchange for their annual membership fees. Faced with the pandemic’s many challenges, EDreams is currently running a promotion offering new members a free six-month trial subscription. It will be interesting to see whether this service (or others like it) gains enough traction to warrant parties’ re-examination of existing rate parity commitments and their limited exceptions.
After weeks of Updates detailing the disastrous effects of COVID-19 on the lodging industry, this week’s Update includes stories on (potential) signs of an industry recovery. I hope you enjoy.
Despegar Presses Ahead with Planned Best Day Purchase
(“Despegar Agrees to Revised Terms in Acquisition of Best Day Travel Group,” Jun 11, 2020 via Business Wire Mergers & Acquisition News)
Following its mid-April announcement that it was re-evaluating the previously announced purchase of Mexican distributor Best Day, this past week, Despegar announced that it was moving ahead under newly negotiated terms, including a revised purchase price and payment terms. With its purchase of Best Day, Despegar will further solidify its position as the leading Latin American online distributor.
We cover the gamut of distribution topics in this week’s Update – OTAs, GDS, search, short-term rentals and wholesalers. Enjoy.
Is OTA Supremacy Undeniable?
(“Online Travel: Can Anyone Challenge The Supremacy Of Booking And Expedia?” Jun, 2020 via Hospitality Net - Latest Industry News)
Similar questions have been asked frequently across the industry as pundits, analysts and experts have warned that the struggling lodging industry is destined to repeat its post-9/11 practices of effectively turning over control of its room inventory to online distributors. Several of this week’s stories look closely at this issue and try to answer the question of whether hoteliers are bound to repeat history or will perhaps use this opportunity to forge a new path.
This week’s Update again features more stories than usual. With so many in the lodging industry using the current downturn as an opportunity to question “business as usual,” we want to be as inclusive as possible. Enjoy.
Trip.com Offers Some Good News and Some Bad News
(“Trip.com Group Highlights Signs of a China Travel Rebound Despite a Sobering Outlook,” May 28, 2020 via Skift Travel News)
Trip.com’s recent first-quarter earnings release offered a little something for everyone. The optimists will point to the reported increases in domestic travel within China and South Korea, and the unexpected strong performance in the luxury segment. The pessimists will point to Trip.com’s dismal first-quarter earnings (operating loss of $211 million compared to an operating profit of $123.7 million a year earlier), projected $153-$181 million operating losses in the second quarter and the non-existent international travel market. Despite the daunting task ahead, Trip.com CEO, Jane Jie Sun remains optimistic and expects to continue the company’s focus on domestic leisure travel in the near term.
This week’s OTA & Travel Distribution Update includes a greater number of stories than usual given the ever-changing COVID-19 situation. I hope you enjoy.
Expedia’s Quarterly Earnings Release Garners the Week’s Headlines
(“Expedia Group CEO Peter Kern: ‘Google’s a problem for everyone who sells something online,” GeekWire on May 22, 2020)
Given the amount of coverage last week paid to Expedia’s first-quarter earnings release, it was necessary to feature at least one story highlighting the release’s key takeaways. In fact, we included three stories, with one from our favorite Seattle-based publication, Geekwire. Some of the points that caught my attention include (1) leadership’s continued focus on Google and its increasing influence in online travel, (2) the relatively strongperformance of VRBO and travelers’ interest in whole-home accommodations post-COVID-19, and (3) Expedia’s opportunistic view of the pandemic and hotels’ resulting need for occupancy (which may present the same kinds of opportunities for Expedia and other OTAs that existed following 9/11).
Even as Seattle hotels face devastating impacts from the COVID-19 shutdown and start planning how they might reopen, the City of Seattle is proceeding with sweeping ordinances protecting employees in hotels with 60 or more guest rooms. On May 15, the Seattle Office of Labor Standards (“OLS”) proposed administrative rules for these new hotel employee protections.
This week’s OTA & Travel Distribution Update for the week ending Friday, May 15, 2020 contains a wide variety of stories – from the tried and true to the truly bizarre. I hope you enjoy.
IHG Finally Opens Ctrip Flagship Store
(“IHG Announces Partnership with Trip.com Group's Ctrip,” May 14, 2020 via Hotel News Resource)
For some time now, many of the largest hotel companies have operated flagship stores on Trip.com’s Ctrip. This past week, seeking to take advantage of the rebounding domestic China market, InterContinental Hotels Group (IHG) announced a broad partnership with Ctrip, including the addition of a new IHG flagship store. What’s most interesting about IHG’s announcement, however, is the planned “cooperation” between the two heavyweight’s loyalty programs. Users of the IHG flagship store will be able to enroll in IHG’s Rewards Club. Direct membership matching – whereby elite members of Ctrip’s loyalty program can apply for elite membership in IHG’s program - will also be offered. As part of this new partnership, it will be interesting to see whether IHG will offer its loyalty program rates through the flagship store or provide IHG loyalty program members who book through the Ctrip store membership benefits. The last time we saw that level of cooperation between a brand loyalty program and a distributor was the headscratcher of a deal between Expedia and Red Lion from 2016.
This week’s Update features a number of stories detailing the disastrous effects of COVID-19 on some well-known distributors. No one is immune from this current downturn.
You Can Now Add Trivago and Airbnb to the Austerity List
(“Trivago Looks to Reorganize With ‘Significant’ Job Cuts,” May 4, 2020 via Skift, “Airbnb lays off 25% of staff, cuts back investment in hotels, transportation,” May 5th, 2020 via phocuswire.com)
Last week, we featured a story detailing the measures being implemented by TripAdvisor to ride out COVID-19. Last week, both Expedia Group’s Trivago and Airbnb announced their own versions of austerity measures. In addition to its 25 percent workforce reduction, Airbnb announced the temporary curtailment of Airbnb’s transportation business and a reduction in investment in its hotels and luxury categories. What this might mean for hotels currently on Airbnb’s platform (HotelTonight or otherwise) or Airbnb’s ambitions of becoming a full-service travel platform remains murky.
Yesterday, the Washington State Liquor and Cannabis Board (the “WSLCB”) announced that spirits, beer and wine restaurant licensees (“SBW Restaurants”) may sell pre-mixed alcoholic beverages for off-premises consumption during the COVID-19 pandemic (the “Bulletin”). In other words, if you are a SBW Restaurant, you can sell cocktails to-go.
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.