This week’s OTA & Travel Distribution Update includes Google prominently featured in the news and a new agreement for Choice Hotels. Enjoy.
Google Continues to Unveil New Travel Products Despite Pandemic
(“Google Quietly Debuts Game-Changing Tours and Activities Advertising Product,” Aug 17, 2020 via Skift Travel News) (subscription may be required)
Last week, we featured a story on Google’s release of new pandemic-related information on popular travel destinations. This week, we introduce you to Google’s new tours and attractions advertising platform. Although the new advertising is viewable today by users in only a few select markets, the advertising, which appears higher than traditional search ads and organic results, is poised to do to tours and attractions what similar advertising did to hotels. The price to participate in the new advertising is not cheap; featured tours and attractions providers are rumored to be required to provide Google a perpetual license to use the providers’ content. I’m sure this won’t be the last story on this new Google travel product.
Parity Commitments Extended by Expedia and Booking.com
(“Expedia, Booking.com voluntarily extend 'price parity' antitrust commitments, Aug 14, 2020 via MLEX Insight)
While the European Commission continues its re-examination of Expedia’s and Booking.com’s parity practices, both platforms recently announced their decision to extend their so-called “narrow” parity commitments (the commitments by both Expedia and Booking.com were set to expire in July). While the extensions were welcome news for many regulators, hoteliers throughout Europe continue to challenge the effectiveness of the commitments and demand an outright ban on all parity requirements. I doubt we will see much movement on this issue by regulators as the world continues its struggle with the COVID-19 pandemic, and regulators are caught up in their ongoing investigations of larger online platforms like Google and Facebook.
Below is an abbreviated version of this week’s OTA &Travel Distribution Update. Enjoy.
Booking Holdings Feels "Full Impact" of Coronavirus as Gross Bookings Plunge 91 Percent in Q2 2020
Aug 6, 2020 via Phocus Wire
Booking Holdings’ gross travel bookings plummeted 91 percent to $2.1 billion in the second quarter of 2020 as the company felt the “full impact” of COVID-19, said President and CEO Glenn Fogel.
This week’s Update takes a deep dive into all things Expedia, and includes several stories regarding Expedia’s recent disastrous quarterly earnings release, an actual copy of the release as well as a copy of a complaint recently filed in Washington state against Expedia that raises some interesting questions for Expedia and other travel intermediaries. Enjoy.
Expedia’s Recent Quarterly Earnings Release Reflects Current Travel Industry Misery
(“Abysmal April pulls Expedia Group down to record lows in second quarter,” Jul 31, 2020 via PhocusWire)
Where to start…Here are my key takeaways from Expedia’s second-quarter earnings report:
- “Worst quarter the travel industry has seen in modern history.” Peter Kern, Expedia CEO
- 82 percent decline year over year in overall revenue ($3.2 billion to $566 million), with lodging revenue declining 78 percent
- 90 percent decline year over year in gross bookings
- 91 percent decline year over year in media and advertising revenues (Trivago and Expedia Group Media Solutions)
- Company-wide selling and marketing expenses in the second quarter dropped from $1.6 billion to $296 million
- April was the low point (cancellations exceeding bookings), but May and June have seen modest increases in bookings (and cancellations have stabilized).
- Drive-to destinations are the first to return
- Vrbo has become Expedia Group’s pandemic bright spot with daily rates continuing to increase (yes, increase) and the overwhelming majority (experts speculate as high as 83 percent) of bookings coming through organic (less expensive) sources. Dare we say that Vrbo is engaged in its own form of direct booking program…
- Although Expedia’s $275 million industry recovery program has been rolled out to partners in 80 countries, no information was given on the number of partners that have actually enrolled in the program and/or how much of the $275 million has actually been distributed.
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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.