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Posts from June 2017.

This week’s GSB OTA & Travel Distribution Update for the week ending June 23, 2017 is below.  A variety of stories this week.

Time to Take French Legislative Prohibitions Seriously [OTA/PARITY]
("Expedia fined in France over hotel price parity clauses", Mlex, June 23, 2017)
Expedia learned first-hand this past week that France’s Loi Macron legislation is indeed the “law of the land” – at least for now.  Last week, a French Court of Appeals ruled that Expedia’s rate parity provisions violated the legislation’s ban on rate parity and fined Expedia one million euros.  Recall that France was one of three EU countries whose competition authorities agreed in 2015 to’s proposed “narrow” (direct channel only) approach to rate parity, but then soon thereafter passed legislation banning rate parity altogether.  Many have questioned the effect of the French legislation given the inconsistent prior administrative resolution.  For now, we have a sense as to how French courts might view rate parity.

Umbrella - SeattleInitiative 124 (aka I-124), the ballot measure approved by voters in November 2016 that establishes several new purported "safety and health" standards for hotel employees in the city of Seattle, opens the door for unprecedented exposures for Seattle's hotel operators. Since its enactment last December, Initiative 124 has given rise to several questions about how, if at all, insurance policies might respond to allegations under the new law.

Our weekly client OTA & Travel Distribution Update for the week ending June 16, 2017 is below. Several interesting stories this week...

Price-Fixing Technology the Subject of EU Regulators [PARITY]

("Enforcers Must Watch for New Algorithmic Price Fixing Online, EU Says," Mlex Market Insight, June 15, 2017)
As a follow up to a story we featured back in March of this year, we again this week highlight the work of the European Commission in the area of technological-based price fixing.  Last week, both the European Commission and the EU’s Organization for Economic Co-operation and Development issued reports looking at the growing use of pricing algorithms and their associated anti-trust (price-fixing) challenges.  Although the reports focus heavily on traditional online retailers, online travel agents didn’t escape the regulators’ attention.

This week’s OTA & Travel Distribution Update for the week ending June 9, 2017 is below. This week’s Update features a variety of stories.

Online travel bookingAirline Surcharge Challenged [DIRECT BOOKING]

("IAG Flight-Booking Surcharge Faces Antitrust Complaints," MLex Market Insight, June 6, 2017)
A week or two ago British Airways announced plans to join Lufthansa in its practice of charging travelers who book through an intermediary (rather than direct with the airline) a booking surcharge ($10.00). Last week, the Business Travel Coalition (a US-based managed-travel lobbying group) filed anti-trust complaints with regulators in Spain, the UK and the EU, arguing that British Airways' parent company, International Airlines Group (IAG) was abusing its superior market position by levying the charge. More information to come on this developing story in the weeks ahead.

This week’s client OTA & Travel Distribution Update for the week ending June 2, 2017 is below.  A short update this week...

  • Expedia Defends (Again) Billboard Effect [OTA].  In the latest salvo regarding the existence of the so-called “billboard effect,” Expedia’s Melissa Maher shared last week the results of what Melissa claims is the latest in a string of studies to show that the billboard effect is real.   This latest report authored by Cornell’s, Chris Anderson, contradicts a report sponsored, in part, by AHLA and released in 2015, which claimed that the billboard effect was largely dead.  While this latest report acknowledges that the effect may be less significant, the report relies heavily on the underlying study’s central finding that 65% of travelers who book directly with a major hotel brand visited one or more OTA sites prior to booking.  Further, over 30% of direct bookers began their hotel search with an OTA.  A complete copy of the study is available in the linked article below.

Latest Thoughts on the Billboard Effect
Tnooz, June 1, 2017
Consumer engagement trends continue to evolve, in turn changing how travelers interact with online resources during the path to purchase. For hoteliers, this has made it difficult to determine which sales and marketing efforts lead to demand. 

This week’s OTA & Travel Distribution Update for the week ending May 26, 2017 is below.  A short, but significant update this week.

  • Bi-Partisan Legislation Introduced to Stop Online Booking Scams [OTA].  In an effort to curb the growing problem of misleading and fraudulent online booking websites, U.S. senators and representatives from both sides of the isle introduced legislation on Wednesday, May 17, entitled “Stop Online Booking Scams.”  A complete copy of the proposed legislation is available.  If enacted, the legislation will require unaffiliated, third-party booking sites to post conspicuous notices prior to completing a booking that notify users that the sites are not affiliated with the subject hotel.  Failure to post the required language would constitute an unfair or deceptive act under the Federal Trade Commission Act and allow for a variety of enforcement alternatives.  It will be interesting to see if and how the hotelier in the oval office supports this important legislation.

Legislation Introduced to Combat Online Hotel Booking Scams
Lodging Magazine, May 18, 2017
A group of bipartisan Senate and House leaders introduced legislation aimed at stopping online hotel booking scams that are increasingly impacting consumers and hoteliers alike... 

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Greg Duff
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.

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