This week’s Update features two stories detailing the role that online buy now pay later companies hope to have in the travel industry’s recovery. Enjoy
Booking Holdings to Repay Pandemic Aid
("Booking Holdings to Repay $110 Million in Pandemic Aid After Dutch Criticism About Bonuses,"June 4, 2021 via Skift Travel News) (subscription may be required)
Last week, in a Securities and Exchange Commission filing, Booking Holdings, Inc. announced that it plans to repay $110 million in government aid ($78 million of which came from the Netherlands) that it received during the pandemic. The announcement came after the Dutch parliament had raised concerns about the compensation packages that were paid to CEO, Glenn Fogel, and CFO, David Goulden in 2020.
This week’s Update features a couple of stories (including one by Seattle’s own Geekwire.com) detailing the recent executive shake up at Expedia. Enjoy.
Expedia’s Re-Structuring Continues
("Expedia Group Hires Top Execs From Apple and Verizon as Part of Leadership Structure Overhaul," May 24, 2021 via GeekWire; "Expedia Trims Business Units, Sees a Trio of Executive Departures," May 24, 2021 via Skift Travel News (subscription may be required))
Over the past few weeks, we’ve featured stories detailing Expedia’s ongoing re-structuring efforts. Last week saw another big change at Expedia as the company announced the departures of veterans, Cyril Ranque, Adam Jay and Tucker Moodey. Ranque’s departure is particularly interesting as Ranque, the Travel Partners Group President, had been featured prominently in many supplier contract issues and negotiations. Joining Expedia are two top executives from Apple and Verizon, Jon Gieselman and Rathii Murthy, respectively. Gieselman will oversee the newly created business unit, “Expedia Brand,” while Murthy becomes Expedia’s new Chief Technology Officer. With these changes, Expedia also announced the creation of four new consolidated business units or “key pillars” within Expedia – Expedia Services, Expedia Brands, Expedia Marketplace and Expedia for Business. It will be interesting to note where Expedia’s products and services fall within these units and how the units will work together to sell these products and services to their key supplier partners.
This week’s Update contains a variety of stories, including details of a recent court win for German hoteliers and the recent musings of the always entertaining, Barry Diller. Enjoy.
Barry Diller’s Latest
("Expedia’s Barry Diller on Biz Travel Doubters: ‘They’re All Dopes’," May 21, 2021 via Skift Travel News (subscription may be required))
Last week, in a CNBC interview with Expedia Group chairman, Barry Diller, he shared his latest views on the return of travel. Diller, like many, believes that leisure (consumer) travel will be the first to return. Diller did take issue with those that speculate business travel will never return. Barry’s assessment? “They’re all dopes.” Many in the airline industry share Diller’s view on business travel with several predicting a return following the Labor Day holiday.
This week’s Update features a number of stories and perspectives on last week’s earnings releases from Booking Holdings, Expedia Group and Tripadvisor. Enjoy.Key Takeaways: Booking Holdings' First Quarter Earnings Report
For those of you interested, we’ve included transcripts from last week’s earnings calls for both Booking Holdings and Expedia Group. For those of you who don’t pour through financials (myself included), I find the earnings calls very informative. My key takeaways from last week’s Booking Holdings’ call are below:
- For years, analysts have speculated that Booking Holdings was first and foremost a European distributor, but now we have some actual numbers to prove it. According to Booking Holdings’ CFO, David Goulden, slightly more than 50 percent of Booking’s pre-COVID business came from Europe. As for other regions, Asia has historically accounted for approximately 20 percent of Booking’s pre-COVID business (no single country accounting for more than low single digits), and the rest of the world (including North America) has accounted for the remaining 30 percent (pre-COVID).
- Booking continues to make strides in the North America, particularly in the United States, which was Bookings’ strongest performing major country in the first quarter, with room night growth in Q1 2021 exceeding growth in Q1 2019. Both Priceline and Booking.com reported strong first quarters in the United States.
- Booking remains focused on its core strategies by growing the Booking.com brand in the United States, and continuing to expand adoption of its payment platform and building out the “Connected Trip.”
- Booking points to its current Booking.com’s “Back to Travel” campaign, which launched in April and features a $50.00 post-stay travel credit for U.S. travelers booking through the Booking.com app. This initiative sets an example for possible future promotions that could help grow Booking.com’s business in the United States and possibly other markets. Other efforts include the continued growth of Booking.com’s vacation rental inventory. As for the payment platform, CEO, Glenn Fogel reported continued growth (just over 20 percent of bookings) of the integrated platform via increased adoption by Booking.com’s U.S. supplier partners. In 2020, the payment platform operated close to breakeven, but through other monetization opportunities, Fogel expects the platform to lead ultimately to incremental EBITDA growth. Finally, Booking’s continued focus on growing its non-accommodation products, particularly flights this past quarter, will be critical in establishing Booking’s “Connected Trip” vision – and capturing potential travelers further “up funnel”.
This week’s Update features a number of stories on the growing short-term rental industry, including Sonder’s recently announced plan to go public. Enjoy.
Ryanair Takes on Online Travel Agents (OTA)
("Ryanair launches new price checker and verified seal to further protect customers from OTAs," April 28, 2021 via Travel Daily News)
Last month, Ryanair announced the launch of two initiatives: the Price Checker and Verified Seal. Both initiatives, which are available only on the Ryanair website and app, are designed to stop OTAs (none of which have commercial relationships with Ryanair) from overcharging users, providing incorrect passenger details and preventing the airline from dealing directly with passengers. The Price Checker allows passengers who have booked tickets through an OTA to check the amount actually paid by the OTA to Ryanair, versus any margin, markup or other fee added by the OTA. The Verified Seal guarantees passengers that they are booking directly with Ryanair, and not through an unauthorized distributor or reseller. Those booking directly through Ryanair are assured to receive the lowest fares, the lowest fees and charges for ancillary items and refunds paid directly by Ryanair to the passenger (and not an intermediary).
This week’s Update provides several updates on stories we featured previously, including details on Expedia’s recent settlement of false advertising claims that we first detailed back in 2016. Enjoy.
The Return of (Offline) Travel Agents
(“Make Way for the Travel Agents. Again.,”April 14, 2021 via New York Times - Global Business) (subscription may be required)
“Book me now. Book me anything.” Last week, The New York Times featured a story predicting the strong return of travel agents. According to Wendy Burke, Founder and CEO of Cadence, a Southern California travel agency, travelers are calling her agency asking her agents to book them travel to just about anywhere as the prospective travelers wait the mandatory 15 minutes following their COVID-19 vaccine. Other agencies report that business is up 35 percent over pre-pandemic (2019) levels. Does this mean a return to “normal” for traditional (offline) brick and mortar travel intermediaries? While travelers may communicate with their agents a bit differently now (texting, online interfaces, etc.), travelers trying to navigate the myriad of COVID travel restrictions are relying on their trusted travel advisors now more than ever.
While the debate around health care passports continues, our latest Update offers Booking Holdings’ CEO’s perspective on the growing controversy. We also take a look at two major distributors’ plans for public offerings – one via a SPAC (Traveloka) and the other through a new secondary listing (Trip.com). What each distributor does with the proceeds from the offerings will be interesting to watch. Enjoy.
Expedia Joins Other Platforms in Offering COVID-19 Advisory
(“Expedia Group Launches COVID-19 Advisor Tool to Track Global Travel Restrictions, April 8, 2021 via Hotel News Resource)
Recently, Expedia announced plans to launch the COVID-19 Travel Advisor, offering information that other platforms have made available to travelers for some time. The Travel Advisor will offer users of several of Expedia Holdings’ consumer sites real-time information on COVID-related travel restrictions in various destinations. According to Expedia, an initial pilot of the Travel Advisor resulted in 1.6 million travelers using the tool on Expedia Holdings’ sites since November 2020. Whether this new advisory will be enough to draw prospective travelers to Expedia Groups’ sites earlier in their search (before identifying or booking a flight or accommodation) – which is clearly the intent behind the new Travel Advisor – remains to be seen.
It was another relatively quiet week in the online travel world as evidenced by our stories below. Expedia Group’s introduction of its Fast Track program designed to recruit unhappy Airbnb hosts and its rollout of AI-enabled virtual travel agents received most of the attention. Enjoy.
Short-Term Rentals Hosts Becoming a Hot Commodity
(“Expedia’s Vrbo Looks to Poach Discouraged Airbnb Hosts With New Incentives, March 29, 2021 via Skift Travel News) (subscription may be required)
We have all read the many stories chronicling the successes of short-term rentals during the pandemic. Our team has done more work in the space over the last six months than the past two years combined. Now, as the travel industry prepares for the anticipated return of leisure travel (and continued strong demand for traditional lodging alternatives), distributors are getting creative in their efforts to add to their rental inventory – even going so far as to create a dedicated programs seeking to expedite the transition of disgruntled hosts wishing to leave their current distribution platform. Meet Fast Track. Recently, Expedia Group introduced its new host recruitment program (Fast Track), which Expedia acknowledges was created specifically to respond to the influx of disgruntled hosts seeking to leave Airbnb over its refund practices. Participants in the program will enjoy preferred placement on Vrbo and a “New to Vrbo” badge on its listing for up to 90 days. The new program is currently only available to hosts in the United States, but is expected to be rolled out globally over the next few months.
Last week was a relatively quiet one for the online travel industry. Hopper garnered most of the headlines with its recent funding round (and accompanying $1 billion valuation). Enjoy.
JetBlue Seeks To Diversify Its Online Offerings
(“JetBlue’s Travel Tech Ambitions Take Step Forward With New Broader Booking Site,” March 25, 2021 via Skift Travel News) (subscription may be required)
Meet Paisly, the new travel website recently developed by JetBlue, which allows holders of JetBlue airline reservations to search and book rental cars, accommodations and theme park tickets. The new website is in addition to JetBlue’s existing JetBlue Vacations, which offers comparable products and services, but exclusively on a package basis. The new website is further evidence of the airline’s announced ambitions of becoming a travel technology company. By the end of the year, JetBlue hopes to offer more accommodation and activity options on the new site.
This week’s Update provides additional information (and perspectives) on Tripadvisor’s new subscription program (Tripadvisor Plus), parity updates from South Korea and the latest on Fareportal’s antitrust claims against JetBlue. Enjoy
Tripadvisor Plus Continues to Garner Attention
(“Tripadvisor’s new subscription service represents potential boon for lodging industry,” says GlobalData, March 19, 2021 via Travel Daily News)
(7 Takeaways From Tripadvisor’s Confidential Pitch Deck to Hotels, March 17, 2021 via Skift Travel News) (subscription may be required)
Readers of my weekly Update know that I’ve expressed a few concerns about Tripadvisor’s new subscription program, Tripadvisor Plus – supplemental property-level terms and conditions that harken back to the days when distributors demanded broad discretion in using a property’s intellectual property (terms and conditions that may also require a property to violate any applicable brand requirements), sourcing rooms and discounted rates from wholesalers and bed banks, etc. As seen in the two stories featured above, industry analysts continue to examine the new program and its effects on Tripadvisor and the properties that elect to participate.
- Transition to a Direct-to-Consumer (B2C) Booking Platform. For some, the program represents Tripadvisor’s dramatic shift from a historically B2B player to a B2C player (in direct competition to other B2C platforms – Expedia, Booking.com, etc.). Gone are the days of Tripadvisor serving only as a review site.
- Cost Savings? As seen from our first story above, the fact that the program is “free” (i.e., no commissions or other charges are paid directly to Tripadvisor for being featured) continues to garner much of the attention (though participation requires discounts of at least 10 percent (recommended 15 percent) and other guest perks – wine, upgrades and other additional benefits, all of which presumably cost something).
- Tripadvisor’s Organic Search Results May Not Be as Organic. According to Tripadvisor, the more value a participating property offers (via discounts and other perks), “the higher you [properties] get placed in our organic search results and marketing channels.” For those properties that don’t participate in the new program? Well, you know what happens…Time to check those Tripadvisor terms and conditions regarding needed sort order disclosures.
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.