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OTA & Travel Distribution Update: Southwest Airlines takes a contrarian approach; begins enforcement of resort fee commissions outside the U.S.; TripAdvisor considers a formal loyalty program

This week’s Update features a story on relative newcomer to third party distribution (Southwest Airlines) and includes, yet again, another update on the on-again/off-again saga of commissions.  Enjoy.

Southwest Airlines Takes a Contrarian Approach
("Southwest Airlines adds content to two GDSs," Phocuswire on Aug 7, 2019) 
In an era when airlines are seeking alternatives to traditional distribution channels, renegade Southwest has again decided to take a different approach.   Southwest announced last week plans to provide content and full booking capabilities to two key global distribution system providers – Amadeus and Travelport.  The move, according to Southwest president, Tom Nealon, rounds out Southwest’s three-legged distribution strategy for business travel – direct, Swabiz and now, GDS.  The addition of traditional GDS to Southwest’s distribution arsenal is expected to add $10-$20 million in additional revenue during the last half of 2020. 

They’re Back: Begins Enforcement of Resort Fee Commissions Outside the U.S. 
("Booking Holdings Makes Good on Resort-Fee Commission Charges," Skift travel News on Aug 5, 2019) 
Booking Holdings spokesperson, Leslie Cafferty, confirmed last week that is indeed beginning enforcement of its controversial commission policy, at least with hotels outside the United States.  As our readers know, this contradicts earlier statements from that it was delaying (and possibly even reconsidering) enforcement of the new policy until January 1, 2020.  We encourage anyone faced with these new commissions to take a hard look at the language in its contract and consider whether the commission is permissible.  As we all know, there are many ways in which to effectively address the sometimes legitimate concerns of consumers regarding resort fees – beginning with the manner (both timing and substance) in which resort fees (or other additional charges) are disclosed.  Allowing revenue maximizing distributors to unilaterally impose commissions on these fees – all under the guise of protecting consumers - is not the answer. 

TripAdvisor Considers Loyalty
("TripAdvisor Looks to Counter Google by Considering Loyalty Initiatives for First Time," Skift Travel News on Aug 8, 2019)
In an effort to counter Google’s increasing forays into travel, TripAdvisor CEO, Steve Kaufer, noted last week during TripAdvisor’s quarterly earnings call that it was considering alternative approaches to membership, including the possible establishment of a formal loyalty program.  While Kaufer (like other distributors) called for greater scrutiny of Google’s practices, Kaufer also noted that membership and loyalty could help alleviate the effects of Google’s practices.   

Other news:

Despegar Uses Installment Payments to Prod Demand
Skift Travel News on Aug 8, 2019
Despegar has been using consumer financing as a crowbar to build its travel agency sales in Latin America, where many shoppers are reluctant to make big purchases online. A majority of its transactions are now done via monthly installment payments.

Culture Trip finally unveils its online travel agency, promises to cover the full funnel
Phocus Wire on Aug 6, 2019
The company claims it has spent a lot of time understanding customer needs and is not just “replicating a bog standard OTA."

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About the Editor

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.

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