Startup Seeks to Turn Traditional Group Booking Upside Down
(“Booking Startup Stayker Makes Room Blocks Less Risky for Planners,” Skift Travel News on Nov 20, 2019)
Launched last Thursday, Stayker seeks to disrupt traditional group sales and contracting. Rather than rely on traditional room blocks and all that they entail (e.g., room revenue commitments, cut-off dates and attrition), meetings planners using Stayker would bypass the entire rooms negotiation process (and related uncertainties) and instead offer their attendees a link to the new online booking platform. Attendees using the platform would then be able to view all available room inventory in the area (from multiple properties) and book wherever (and whenever) they want at the current rates (no negotiated group rates.) Should such a platform catch on, the group segment (and its associated revenue) could change dramatically. Group bookings would cover food and beverage and meeting space only. Hotels seeking to house group attendees would compete on an area-wide basis and market and promote their inventories (once again) through a third-party online intermediary. It will be interesting to see whether meeting planners embrace this new model. Stay tuned.
Vrbo Repositions Itself
(“Expedia’s Vrbo to Reposition Itself Beyond Vacation Rentals as a Family Travel Business,” Skift Travel News on Nov 14, 2019)
Fresh from its disappointing third-quarter financial results, Expedia Group’s recently announced “repositioning” of Vrbo may be just what the doctor ordered. Earlier this month, Vrbo’s new general manager, Jeff Hurst, announced that Vrbo (Expedia’s short-term rental platform) plans to reposition itself as a family travel site offering vacation products and services (e.g., resort accommodations, in-stay services, etc.) beyond short-term rentals. Expedia provided few details about the new platform and no timeline for the planned repositioning.
Algorithms Under EU Scrutiny
(“Algorithms might raise collusion concerns, Franco-German study says,” MLex Insight on Nov 8, 2019)
As many of you probably already know, algorithms are the heart and soul of most online travel booking platforms (if you doubt me, just try asking for details about property rankings.) The antitrust authorities from Germany and France recently released a joint study examining the effects of algorithms on competition. In particular, the study focused on the relationship of pricing algorithms and horizontal collusion, and how the market dominance of certain platforms (including online travel agencies) may affect the algorithms used. If anyone would like a copy of the study, please let us know.
A recent settlement between Seattle chef Tom Douglas and his restaurant employees highlights the potentially costly technical requirements of Washington’s automatic service charge laws for hospitality businesses.
Washington law allows all “employers” that provide food, beverage, entertainment or portage services (e.g., restaurants, caterers, convention centers and hotels) to impose an automatic service charge on customers for such services. Sounds fairly straightforward, right? Not so fast. This law has two technical, yet important, requirements that employers must follow:
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.
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.