Booking.com Amends Its Commission Policies
("Booking to Charge Commission on Resort Fees in Major Shakeup for Hotel Revenue," Skift Travel News, May 20, 2019)
Although it was a relatively quiet week in the distribution world (at least in terms of the number of noteworthy stories), this first story garnered a lot of attention and deservedly so. We had heard rumblings over the past few weeks that Booking.com was notifying hotels of its plans to charge commissions on hotels’ resort fees and other guest charges (e.g., Wi-Fi charges) irrespective of whether Booking.com or the hotels collect the charges. These rumblings became a reality as the many usual outlets began featuring articles detailing Booking.com’s plans. According to these reports, US hoteliers should see the additional commission charges beginning in June. Hoteliers need to review their contracts carefully to determine whether this unprecedented move is contractually permitted.
The week’s stories remind us how quickly things continue to change in the distribution landscape. Enjoy.
State Attorneys General Exploring Alleged Anti-Trust Violations
("U.S. state AGs looking into Expedia Group, hotel practices in antitrust probe," Reuters Company news, May 9, 2019)
News of state attorneys generals’ investigation into hoteliers’ online practices has made headlines these past two weeks. Initiated by the Utah state attorney general in 2017 (and now involving an unidentified number of additional state attorneys general), the ongoing investigation is centered on hoteliers’ alleged agreement to not bid on each other’s keywords (the same claims made by Travelpass in its pending Texas litigation).
This week features another travel-shortened OTA & Travel Distribution Update. We will return with our regular format next week.
Booking.com wins Swedish court appeal on contract terms with hotels
MLex Insight on May 9, 2019 (subscription required)
Booking.com has overturned a Swedish ruling that ordered it to change its contract terms with hotels. The Stockholm Court of Appeal ruled today that the Dutch company was not in breach of competition rules, annulling a decision made last July by a lower competition court. Today's decision can't be appealed further.
Expedia Under Investigation by Utah Over Hotel Collusion Claims
Bloomberg Quint - Stories on May 9, 2019
Expedia Group Inc. is under investigation by the Utah attorney general for allegedly conspiring with the biggest U.S. hotel chains to suppress competition in online travel booking. The office is investigating whether Expedia conspired with Marriott International Inc., Hilton Worldwide Holdings Inc. and other hotel companies to manipulate.
Misleading online ads and EU dual-pricing ban scrutinized by Dutch Authority
Bloomberg Quint - Stories on May 9, 2019 (subscription required)
Companies conveying a false impression of scarcity to consumers could face more regulations in the Netherlands, the head of the Dutch Competition said.
New Hotel Booking Platform Centers on Sustainable Travel
Lodging Magazine on May 8, 2019
Not-for-profit hotel association Bee + Hive is launching a new booking platform centered around hotels that offer sustainable travel experiences. Guests that want to travel responsibly and adventure while on vacation can plan a trip based on activities, locations, and sustainable resources.
While Marriott’s entrance into the vacation rental business garnered most of the attention this week (we’ve included one of the many stories written this week about Marriott’s move), a few other stories warranted inclusion in this week’s Update.
We’ll be back with our usual format next week.
This week’s Update features a story on an issue – OTA cancellations – that we’ve been hearing a lot about recently. Enjoy.
Further Details Emerge on Japanese Regulators’ Investigation into Rate Parity
("Comment: Booking.com, Expedia and Rakuten in Japanese regulator's sights over price-parity requirements," MLex Insight, April 22, 2019) (subscription required)
In a follow up to a story we featured a few weeks ago, this past week more details (and speculation) emerged about the recent raids by the Japan Fair Trade Commission (JFTC) of Expedia, Booking.com and Rakutan. According to reports, the Japanese investigation is likely to focus on both broad parity (indirect and direct channel parity) and so-called “narrow” parity (direct channel parity only), which was widely used by Expedia and Booking.com as a compromise to satisfy EU regulators’ concerns regarding the OTAs’ rate parity practices several years ago. Japanese regulators have allegedly questioned whether the “narrow” parity compromise truly solves the anti-competitive effects of rate parity. If the results of the JFTC’s investigation into Amazon and its pricing parity practices from several years ago offers any indication as to how this newest investigation might turn out, hoteliers may soon find themselves free of rate parity (indirect and direct) throughout Japan. More to come . . .
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.