Duff on Hospitality Law

On March 22, 2023, Senators Richard Blumenthal (D-CT) and Sheldon Whitehouse (D-RI) introduced a bill “to limit and eliminate excessive, hidden, and unnecessary fees imposed on consumers.”  In response to President Biden’s call for legislation, the “Junk Fee Prevention Act” was referred to the Senate Committee on Commerce, Science and Transportation for consideration. 

The Junk Fee Prevention Act targets fees and pricing disclosures in the lodging, ticket, and to a limited extent, the airline and communications industries.  With respect to the hotel and lodging industry, the proposed legislation could result in a reset in the market for hotels that charge a resort or amenity fee, and provide a level of uniformity between price disclosures made by hotels directly and those made by third-party applications used to advertise and book hotel rooms.

Specifically, the legislation would apply to both hotel/lodging providers as well as any third-party that “advertises rates or the purchase of short-term lodging.”  Such covered entities would be required to display – at the first time any price is shown – the “total price” of the lodging, including any “mandatory fee” that is either required, not reasonably avoidable, or not expected by a reasonable consumer to be included in the price.  Violation of the Junk Fee Prevention Act would amount to an “unfair or deceptive act or practice” pursuant to the Federal Trade Commission Act.  Enforcement would be provided by the FTC as well as State Attorneys General. 

The Junk Fee Prevention Act is the latest legislative proposal aimed at targeting resort fees, following the February 2023 announcement of AB 537 in California. Similar bipartisan legislation was introduced in September 2019 in the US House of Representatives but was not enacted.

Click here to access the contents of the bill.

This week’s Update features two anti-trust / competition law updates from the EU (the Netherlands) and South America (Chile).  Enjoy.

• • Google Offers Price Guarantee.  Late last week, Google announced it was re-launching a pilot program to guarantee the prices of select U.S. flights; if travelers find a lower airfare prior departure, Google will refund them the difference.  Google piloted a similar limited guarantee in 2019, but ultimately terminated the pilot with the arrival of COVID.  For those flights that benefit from the guarantee, Google monitors the price of the flight until the scheduled departure.  If the price does drop, Google refunds the traveler the difference in Google Pay that can be used for other online purchases or ultimately refunded.  Refunds are capped annually at $500 for up to three guaranteed bookings. 
    
    
  • Chilean Authorities to Examine Online Platforms in Travel Industry.  The Chilean competition authority announced last week its plan to launch a detailed study of the hospitality industry, including  online digital platforms that advertise and facilitate the booking of accommodations.  According to the authority, a preliminary survey of the market found it necessary to examine whether the existing regulatory structure was adequate to ensure competition.  The study is expected to be complete in December, with a final report issued in March 2024. 
    
    
  • Dutch Court Releases Decision Referring Booking.com’s Contract Clauses to Full EU Court.  Readers will recall the significance of this case and the Dutch’s court’s decision to refer the case to the higher EU Court.  At stake are not only Booking.com’s contractual parity provisions, but more importantly, the correct methodology to be used when defining the online travel market.  If the market is narrowly defined (i.e., online sellers of travel products and services only), then Booking.com most certainly will be determined to have a large share of the market and likely subject to greater anti-trust scrutiny (including the Digital Markets Act (DMA)).  Although the linked decision is entirely in Dutch, it contains English commentaries throughout.
    
    
  • Yet Another Story on the Growing Influence of Social Media in Travel Marketing.  Ten thousand dollars ($10,000) a month and a $7500 travel allowance to travel the world and stay at Blueground’s U.S. and European properties, sign me up.  I think I’d make a great travel influencer.  This story follows up on a recent story we featured emphasizing the growing importance of social media platforms in travel marketing.

This week’s Update features a heavy dose of online group booking platforms and an interesting report on the growing importance of social media and in particular, travel influencers. Enjoy.

• • Wyndham Adopts Groups360’s Online Booking Platform. Wyndham is the latest large hotelier to announce its adoption of GroupSync, Groups360’s booking platform that allows users to view, select and book blocks of guest rooms and meeting space online or via Groups360’s so-called “Smart RFP.” Wyndham properties will soon be available via Smart RFP and later this year via GroupSync’s online platform. Marriott made a similar announcement earlier this year.
    
    
  • CVENT Set to Go Private – Again. Well, its official, the rumored purchase of group booking lead generator and booking platform, CVENT, by Blackstone is happening. Blackstone announced last week that an affiliate (along with minority investor, Abu Dhabi Investment Authority) is acquiring CVENT for approximately $4.6 billion. The purchase price represents roughly a 52% premium for existing shareholders. According to Blackstone, the purchase provides another example of Blackstone’s continued belief in (and investment focus on) the recovery of the events and travel industries. From my perspective, it will be interesting to see whether this change in ownership results in any meaningful improvements in CVENT’s sometimes strained relationships with its largest hotel operator customers, particularly as Groups360 (partially owned by many of these same customers) continues to announce corporate-wide partnerships with the industry’s largest players. Stay tuned.

Finally, we’re thrilled to announce the arrival of our newest hospitality team member, Erin Snodgrass. Details about Erin and her practice can be found here, but in short, Erin rejoins our hospitality team after a 20+ year hiatus forming and leading her own women-owned law firm. While at her firm, Erin represented a number of hospitality and travel industry clients (Starwood, Expedia, Egencia, Amex GBT and others) and technology clients (Microsoft and Amazon). Erin’s addition will add much needed capacity to our team in the areas of privacy, sales and marketing, distribution and procurement. Please join me in welcoming Erin.