Duff on Hospitality Law

Good Sunday afternoon (for some of us, a dreaded “spring forward” afternoon) from Seattle . . . Our weekly Online Travel Update for the week ending Friday, March 6, 2026, is below. This past week began with news out of the UK of a new CMA investigation into the hotel industry and ended with ChatGPT’s apparent recognition that platform transactions may be harder than first thought. Our stories below provide the details. Enjoy.

• • ChatGPT Scales Back Platform Purchasing – For Now. A report this past week by The Information (which was later confirmed by ChatGPT to Skift) indicated that ChatGPT is scaling back efforts to provide users the opportunity to buy (or book) directly within the platform. Instead, ChatGPT intends to focus its efforts on product search and discovery while deferring to merchants to handle the actual booking process via their ChatGPT apps. Good news for Expedia and Booking.com, which in recent weeks have seen drops in their stock prices over disintermediation concerns. So why the change? Commentators suggest that “AI commerce” is far more difficult than originally anticipated – technology, user habits (and trust) and regulations all present significant hurdles. What does this mean for suppliers? My view of these platforms as natural language meta search sites continues to ring true. Assuming prospective travelers’ use and trust in AI continues to grow, I believe that it remains critical for suppliers to be present and part of travelers’ “search and discovery” on these platforms. Differentiation will become the challenge. In this world, OTAs will lean into the AI platforms and double their efforts to capture (and re-direct) as many travelers as possible early in the sales cycle/funnel via content, discounted pricing and ultimately advertising.
  • State and Federal Legislators Focused on Technology-Based Pricing. For the past several weeks, we have featured stories on state and local efforts regarding technology-based pricing (sometimes referred to as “surveillance pricing”). This past week, the U.S. House Oversight Committee sent letters to the CEOs of five companies, including Expedia and Booking.com, asking whether they used surveillance pricing (in the form of pricing algorithms and personal data) in setting online prices. At the state level, pending legislation in Connecticut, Maryland, Ohio and Tennessee prompted the Travel Technology Association to send letters to legislators in each state warning that the proposed legislation would limit the ability for online retailers to offer consumers discounts, loyalty programs and other promotions.
  • Booking Holdings Claims Partial Victory in Ongoing Hotelier Claims. In a press release last week, Booking Holdings claimed that the Dutch court overseeing competition claims by German hoteliers has agreed with several of its positions, including the fact that German hotels have yet to provide enough evidence that Booking.com’s use of rate parity provisions prior to 2016 violated competition laws. More importantly, according to Booking, the court expressed concerns regarding the narrow market definition applied by German competition authorities and courts, suggesting that they failed to take in account the threat posed to Booking by other available sales channels as required by the European Court of Justice’s ruling in 2024. Expect more on this case and others currently pending against Booking Holdings in the weeks to come.
  • UK’s Competition and Markets Authority (CMA) Opens Investigation. Hoteliers Hilton, Intercontinental Hotel Group (IHG) and Marriott, together with real estate analytics firm, CoStar (owner of STR), are under investigation in the UK. According to the CMA’s statement announcing the investigation, the sharing of competitively sensitive information among competing companies, even via a third party services provide, has the possibility of reducing how strongly the companies will compete. Recall that similar claims were made (unsuccessfully) in the U.S. against hoteliers a year ago. The CMA’s investigation is expected to continue through August.

Have a great week.

Good Sunday afternoon from Seattle . . .  Our weekly Online Travel Update for Friday, February 27, 2026, is below. This week’s Update features a variety of stories, including a few new perspectives on the existential threat posed by AI to the existing online travel behemoths. For reasons I cannot explain, this week’s Update features as many questions (perhaps more) than answers. Enjoy.

• • Major OTAs Set New Record in Annual Marketing Spend. Booking Holdings, Expedia Group, Trip.com Group and Airbnb spent a combined $20 billion in sales and marketing in 2025. Despite OTAs’ efforts to boost direct bookings (through loyalty program expansion and other means), experiments with AI customer acquisition and changing sales and marketing investments, the amount spent on sales and marketing efforts continues to grow. It will be interesting to watch how these numbers change (and the detail behind these numbers) with OTAs’ much publicized AI efforts.
  • AI Not for You? Kayak Has an Answer. Are Kayak’s newest ad campaigns a true representation of “average” travelers’ fear and general distrust of AI or a desperate last gasp at meta site relevancy?
  • Effects of OTA Disintermediation Beyond Lower Stock Prices. This week we include one of the dozens of stories that came across our inbox detailing the financial fallout of travelers’ potential use and reliance on AI platforms. Are reports of the threats posed by AI to OTAs (or now public acknowledgements by the largest OTAs) overblown? If these threats are real, how will these threats affect OTA behavior in the months and years to come? In the face of an existential crises, will OTAs continue to honor “commercial” understandings or will they ultimately be forced to resort to nuclear options – price discounting, keyword (or AI equivalent) purchases, misuse of opaque or package rates, obscuring or blacklisting property listings?
  • Travel Ads Spotted on ChatGPT. Over the past few weeks, we’ve included several stories detailing OpenAI’s planned introduction of ads for its lowest tiers of ChatGPT users. Google too has discussed plans for introducing ads on its AI mode platform. Apparently, some of these ads on OpenAI are now live and of course, one of the first ads, is from Expedia.

Have a great week everyone.