Duff on Hospitality Law

Good Saturday afternoon from Seattle . . . Our weekly Online Travel Update for the week ending Friday, November 21, 2025, is below. Google captured much of the industry’s attention and imagination early in the week with its announcement of new AI-enabled travel booking tools, but it then spent much of the remainder of the week walking back its travel industry intentions. Never a dull moment. Enjoy.

• • Trump Administration to Challenge State Regulation of AI. For those of you who have seen my presentation on AI and its effects on the travel industry, you will likely recall the uncertainty that I expressed about future regulation of AI, particularly at the state level. While there are numerous examples of states legislating in this area (Colorado being the example that I tend to discuss most in my presentations), the future of those efforts is in jeopardy. Having failed to include language prohibiting state regulation of AI generally in its “Big Beautiful Bill,” the Trump administration is now considering an executive order directing the Department of Justice to create an “AI Litigation Task Force” to sue states for adopting AI legislation or regulation that allegedly violates federal law, including Constitutional protections around free speech and interstate commerce. The order also directs the Department of Commerce to explore options for withholding federal funds from states that legislate in the AI arena and tasks advisors to the administration to draft federal legislation establishing a federal regulatory framework for AI. President Trump is expected to sign the executive order as early as this next week. Bottom line, don’t expect to see meaningful US regulation or oversight of AI any time soon.
  • Travelers Increasingly Look to OTAs to Start Their Hotel Searches. In a report released this past week, Siteminder shared the results of its recent study of global travelers (12,000 travelers across 14 countries) and their booking and travel preferences. A complete copy of the report is available in the story below. A couple of key takeaways . . .
    • Travelers are now more likely to begin their search for hotels on OTAs (26%) versus search engines (21%)
    • Of those travelers who begin their search with OTAs, an increasing number (18%) elect to book direct (3.3% increase over last year)
    • Those using AI as a first step in their exploration has increased fourfold from 1% to 4% (and even higher among younger demographics), though those wanting AI-powered capabilities as part of their search (including price monitoring) has increased significantly (now 80%).
  • Consumer Class Action to Move Forward Against Booking.com. Separate and apart from the pending class action by European hoteliers against Booking.com, the Consumer Competition Claims Foundation (“CCC”) and Consumentenbond announced plans this past week to move forward after failed settlement discussions and to take their claims to a Dutch court. The claimants are demanding that Booking.com stop its alleged abusive and misleading practices and compensate Dutch consumers for damages suffered. The potential class includes all Dutch consumers who booked hotel rooms online through Booking.com or other online platforms. As of the date of last week’s announcement, 267,000 people had registered to be part of the class.
  • Google Launching AI Mode Flight and Hotel Booking Tools. In today’s Update, we offer several stories (including Google’s own press release) detailing Google’s announcement this past week of several new travel related tools, including, most notably, the upcoming release of new Google AI mode agentic booking tools that allow users to book reservations for flights and hotels. The announcement comes on the heels of Google’s recently announced agentic booking tools for booking restaurant reservations, buying event tickets and making beauty and wellness appointments. While Google is still developing the new tools (an official launch date was not provided), it did provide some details about the new tools and the anticipated user experience (which from this person’s viewpoint, sounds a lot like a natural language facilitated metasearch platform) . . .
    • Google is working with industry partners Booking.com, Expedia, Marriott, Choice, IHG and Wyndham in developing the new tools. Google expects to announce additional industry partners (“of every size” including aggregators) at the time of the launch.
    • Users will be able to select among identified travel partners based on price and other attributes.
    • Booking flows, payments, etc. still need to be worked out, though Google made clear that industry partners will serve as the merchant of record and will manage / service existing bookings.
    • Google wants to incorporate users’ previous interactions with AI Mode into the booking tools and user experience (e.g., preference for luxury travel, member of particular loyalty programs, etc.).

Following the announcement, both industry pundits and investors raised questions about the effects of the new Google tools on existing OTAs, which leads us to our final featured story below.

• • Google Walks Back Industry Intentions Following Latest Product Announcement. Facing questions about its long term industry intentions and possible OTA (also known as ADVERTISERS) disintermediation (and loss of market value) following its announcement of forthcoming agentic flight and hotel booking agents, Google was quick to clarify (walk back) its intentions. In a follow up interview with Skift, Google’s vice president of engineering for Travel and Local, Julie Farago, tried to clarify Google’s intentions – “Google has no intention of becoming an online travel agent.” According to Farago, even with the introduction of the new AI tools, users will continue to work with their partner of choice (whether OTA or direct channel) as they do now with standard search.

All of this leads the skeptic in me to question whether AI will really be the game changer that it is often promoted to be. Yes, it may present a far more useful and powerful form of search allowing users to access and organize content in ways never before seen, but will the dominant (and likely, most trusted) AI players really do or try anything that disrupts the current status (and financial benefits) of online search and booking? We know that the OTAs are working hard to ensure that outcome. Regardless, the next months and years will definitely be interesting. I love this job.

For those of you celebrating Thanksgiving, I hope you and your families have a wonderful holiday. Our next Online Travel Update will be on Friday, December 5. Have a great two weeks.

Good Sunday morning from Seattle . . . Our weekly Online Travel Update for the week ending Friday, November 14, 2025, is below. This week’s Update features of variety of stories, including Apple’s recent Digital ID announcement. As promised last week, we’ve also included a copy of the transcript from last week’s Expedia earnings call. Finally, for our readers under the age of 18, you may want to consult with your parents before proceeding. Enjoy (but not too much).

• • Apple Announces New Digital ID Functionality. On Wednesday, Apple announced Digital ID, a new feature that allows iPhone users the opportunity to use digitally stored passport information to pass through TSA checkpoints without a physical passport of identification. Today, the functionality is limited to U.S. domestic travel (12 states and 250 airports (with more on the way)) and cannot yet be used for international border crossings. With important digital ID changes coming to the EU in the next few years, expect to see more about digital IDs in upcoming Updates.
  • Airbnb Sues Over Alleged Conspiracy Against Short Term Rentals. This past week, Airbnb sued the City of Biloxi, Mississippi, in federal court alleging that the City illegally conspired with the Mississippi Hotel & Lodging Association to severely limit short term rentals and thereby raise the Association’s members’ (local hoteliers) profits in violation of state and federal anti-trust law. According to Airbnb’s complaint, the Association, through its illegal conspiracy with the City, has prohibited short term rentals in large sections of the City, severely restricted short term rentals in others and inserted itself in unprecedented ways into the review and approval of new short term rentals applications. For those of you interested, a copy of the complaint is linked in the story below.
  • Airbnb Launches Hotel Pilot. Airbnb is moving ahead with its previously announced plans to re-enter the hotel industry. Airbnb has launched a pilot program in three cities – New York, Los Angeles and Madrid – where restrictive short term rental regulations have severely limited inventory. For now, the pilot is focused on independent and boutique hotels. Recent changes to the Airbnb platform now allow users to view room types and other detailed property information (unlike Airbnb’s first foray into hotels) like more traditional hotel booking platforms. According to Airbnb CEO, Brian Chesky, the addition of hotels presents a multi-billion dollar opportunity that won’t be dilutive to its existing short term rental business. Chesky further believes that Airbnb won’t need to invest the billions of dollars in marketing that its competitors (Expedia and Booking.com) do because of its existing strong brand identity (and resulting direct traffic). Stay tuned.
  • Want to Get Lucky? Plan a Vacation. Every now and then we encounter a story that creates far more questions than it answers. Last week was one of those moments when we came across a press release on the Booking.com website claiming that for the majority of American women (56%), a partner planning and booking a trip is just as arousing, if not more, than foreplay. What? Let the questions begin. I cannot wait to raise this nugget in my next Booking.com negotiation.

Have a great week everyone. I’m booking a trip on Booking.com. 

Good Sunday morning from Seattle . . . Our weekly Online Travel Update for the week ending Friday, November 7, 2025, is below. Expedia’s quarterly earnings report garnered most of the attention this week as Expedia reported relatively strong third quarter results. We’ll include a transcript from this week’s earning release call in next week’s Update. Enjoy.

• • Expedia Posts Better Than Expected Quarterly Earnings. Expedia’s third quarter earnings reflected continued strength in its B2B business and a stabilizing B2C business. Here are a few of the key numbers:
    • Company-wide revenue grew 9% YOY to $4.4 billion (B2B revenue grew 18% YOY)
    • Advertising revenue grew 16% YOY
    • Company-wide gross bookings grew 12% YOY (B2B bookings grew 26% and B2C bookings grew by 7%)
    • Booked room nights grew by 11% (outpacing competitors Airbnb and Booking.com for the quarter)

When asked during the earnings call about Expedia’s current AI efforts, CEO Ariane Goren noted that the Company had two primary priorities – ensuring that its brands and content appeared in responses to users’ prompts on the major AI platforms and directing traffic from those platforms back to Expedia. Goren’s comments regarding the leads received by Expedia from popular AI platforms mirrored those of Booking Holdings’ Glenn Fogel just a week earlier - few leads today but growing and good quality.

• • AI, AI Agents and Corporate Travel. For the past few months now, the industry (us too) has focused almost exclusively on AI and AI agents and their effect on leisure travel. What about managed and corporate travel? What complexities do travel policy compliance, expense management and duty of care obligations introduce? According to recent comments from some of the largest corporate travel players, these added complications will make it impossible to replace TMCs and expense platforms entirely. Sounds like self-preservation talk to me. From my perspective, as AI tools are perfected in leisure travel, their extension into corporate and managed travel (and their complex data sets, which seem like natural fits for AI) seems inevitable. Anyone agree?
  • What Lessons Can Be Learned from Airlines and ChatGPT? According to recent research conducted by PROS, an airline retailing and revenue management company, referrals from leading AI platforms to airline websites is growing quickly. In September of this year, ChatGPT accounted for 2.3% of all referral traffic from search engines to airline websites (this number is up from 1.8% in August). While the importance of AI platforms may be increasingly generally, airlines may have a hard time benefitting from the increased usage. According to PROS, a wide margin of the traffic generated through ChatGPT today goes to OTAs and metasearch sites and not airlines themselves. Note that these results are quite different than the results of the AI behavioral study by Propellic that we featured in an earlier post, but they may be indicative of where hotel search is going in the future.

Have a great week everyone. 

Good Sunday morning from Seattle . . . Our weekly Online Travel Update for the week ending Friday, October 31, 2025, is below. Booking Holdings garnered most of the attention this past week as it reported its third quarter earnings and updated investors on its ongoing artificial intelligence efforts. A copy of the earnings release call transcript is linked below. Enjoy.

• • Updates on Booking.com’s Payments Business. With so much attention being paid these days to Booking.com’s AI announcements, we’ve all lost track of Booking.com’s ongoing efforts to stand up a successful payments’ platform. Anyone remember “Facilitated Payments?” Payments remain a critical component of Booking.com’s overall connected trip strategy and is likely one area (at least according to Booking.com) where AI platforms won’t be racing to displace existing players or structures.
  • Is Organic Search Dead? According to Kayak’s CEO, Steve Hafner, organic search is at least dying. In a recent Skift interview, Haftner shared that large language models (LLMs), including Google’s AI Overviews, are to blame for rising customer acquisition costs. With Google’s placement of entirely self-contained AI driven responses at the top of users’ search results, organic search is becoming less relevant and forcing advertisers like Kayak to invest more in paid search. According to Haftner, anyone who has previously relied on organic links is likely to suffer the same consequences. The result? At least for Kayak, the changes resulted in a recent $457 million accounting write down on its brand. With these important changes in search being brought about by AI (and in particular, Google’s AI Overviews and AI Mode), one must ask how relevant are Google’s newly proposed search boxes (see story below) other than to satisfy EU regulators?
  • Booking Holdings Updates Investors on AI Efforts (and Reports Quarterly Earnings). Booking Holdings released its third quarter earnings report this past week and while Booking reported a relatively strong third quarter (including some first time comments on its growing B2B business), most of the industry’s attention was focused on CEO Glenn Fogel’s comments on AI. A few takeaways . . .
    
    • It remains far too early to say with any certainty that AI is the travel industry disrupter that everyone claims it is. Yes, Booking.com is enjoying great PR (“first wave”) with regard to its new ChatGPT app, but what that app actually means for new customer acquisitions or direct channel growth remains unknown.
    • Bookings generated through AI enabled platforms reflect higher user engagement – better conversion, fewer cancellations and high customer satisfaction. All good things.
    • Booking believes that irrespective of where travelers may actually begin their search, platforms like Booking.com will continue to serve a critical (irreplaceable?) role in fulfilling and servicing the bookings (and the many complex relationships that are required to create and pay for those bookings) that ultimately result from those searches.
    • My two cents . . . Despite Glenn Fogel’s seemingly dismissal of the threat posed by AI platforms, I believe Booking.com is as afraid of AI and its possible disintermediation of travel intermediaries like Booking.com as it is excited about the potential opportunities presented by AI. I also believe that the outcome here will depend more on the aspirations (and existing or future business models) of the AI platforms versus anything that Booking or other intermediaries might ever do. Walking away from billions of dollars of ad revenue (or possible revenue) generated through the intermediaries will be difficult for any platform player. Google never made that kind of leap with traditional search. Will Google (or other newcomer AI platforms) behave differently with AI?
  • TripAdvisor to Soon Launch Its Own ChatGPT App. How relevant will this app actually be? See discussion above.

Have a great week everyone.