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In this week’s Update, I’ve again included a larger than normal number of stories given the interesting updates we are seeing. Not all the updates may be directly related to traditional distribution, but there is a connection. If there are particularly topics that you would like us to cover in future updates, please let us know. Enjoy.

Is the Canary We Should All Be Watching?
(“What’s Next for Group as Coronavirus Crisis Subsides in China?,” Skift Travel News on Apr 1, 2020)
Yes, another story on (f/k/a and its efforts post-COVID-19. As the industry seeks clearer direction on what things will look like in the days, weeks and months after COVID-19, has become the industry’s unofficial canary. Last week, Skift sat down with CEO Jane Sun to get her firsthand perspective on COVID-19 and the rebounding travel market within China. Sun confirms that the “green shoots of recovery” are definitely underway in China, at least with regard to domestic travel. As the COVID-19 pandemic subsides, Sun describes the next big challenge as reestablishing the confidence of Chinese consumers to travel again. Whether this means offering products to only those countries that have demonstrated an ability to control the virus or endorsing a national “health code” that identifies those healthy enough to travel, is exploring a variety of options. I encourage everyone to take the time to read the interview.

In this week’s Update, we’ve included a greater number of stories than usual given the  quantity and variety of available stories pertaining to COVID-19.

Stay safe and healthy. Together, we will get through this.  

Travel Intermediaries Accused of Leaving Travel Agents Hanging
(“Travel Agency MisterFly Slams Airlines for Delayed or Denied Refunds,” Skift Travel News on Mar 27, 2020)
Over the past few weeks, much has been written about the questionable cancellation practices of several European airlines. Notwithstanding EU regulations requiring airlines to refund travelers for canceled flights, many cash-starved airlines are only issuing credit “notes” for future travel. Travel agents and tour operators, facing demands for refunds by their clients, are now caught in the middle and demanding intermediaries (International Air Transport Association (IATA)) to do something about it.

What a week it has been. For those of you working around the clock to retain some semblance of your business and the travel industry together, we stand alongside you. Each day that passes brings with it a wave of new cancellations, news of mass furloughs or layoffs and, most recently, property closures. If we can help any of you deal with this onslaught, please let us know. We are trying to devise creative ways to support all of our clients through this incredibly tough period. 

Through all of this, we will continue to share those stories that we believe may provide direction as you continue to move forward. If there are topics of particular interest that you think we should include, we would love hear from you.  

Yesterday, March 23, 2020, Washington State Governor Jay Inslee announced that he will sign the statewide Stay Home, Stay Healthy Order (the "Order").

The Order requires every person to stay at home (unless they need to pursue an “essential activity”); bans all gatherings for social, spiritual and recreational purposes; and closes all businesses, except for “essential businesses.”

With all that has occurred in these past few weeks involving coronavirus (and its devastating effects on the travel industry and those within it), I had questioned whether I should suspend our weekly Updates until things have settled. After some consideration, I believe that there is probably no better time to provide this important information to our readers as they inevitably re-evaluate (and then re-evaluate again) their near-term and long-term plans for this new altered reality. I hope in some small way that our continued Updates are informative and helpful. If I can do things better or different, please let me know.

While this week’s Update does not include stories about Coronavirus and its potentially disastrous effects on the lodging and travel industries, I’m sure it will only be a matter of time. We are already hearing stories of distributors’ troubling responses to the outbreak.

Marketing Investments by OTAs Increase Again
(“Expedia Group, Booking Holdings spent more than $11B on marketing (mostly to Google) in 2019, Phocuswire on Mar 6, 2020)
For the past few years, we’ve reported on the staggering annual increases in marketing by the two largest OTAs – Expedia Group and Booking Holdings. This past year (2019) was no exception, although last year’s $400 million increase was almost exclusively attributable to Expedia. Combined, the two largest OTAs spent nearly $11 billion on marketing. Booking’s marketing expenses remained mostly flat (from $4.96 billion in 2018 to $4.97 billion in 2019), but Expedia’s increased significantly (from $5.57 billion in 2018 to $6.03 billion in 2019). A closer examination of Booking’s marketing expenses reveals that Booking’s “performance marketing” (display ads) investments decreased in 2019, while its “brand marketing” efforts increased. Not surprisingly, Google was the largest recipient of the OTAs’ marketing spend.

Our (travel-abbreviated) weekly OTA & Travel Distribution Update for the week ending February 28, 2020 is below. I’ll be back next week with our regular format. 

Booking Channels Rival Expedia and Will Cut Costs Too 
Skift Travel News on Feb 27, 2020
Like other travel companies, Booking Holdings officials are grappling with the fluid nature of the coronavirus and the negative impact on its business. And, like one other company, Expedia Group, that’s been making headlines about attacking internal bloat, Booking Holdings intends to get costs in line, although the extent of any budget trims wasn’t specified.

This week’s Update again features number of stories on Google, including an update on last week’s story detailing Google’s recent addition of direct links to competitors’ travel sites.

Last but not least, as most of you know, this past Monday, Expedia announced a massive layoff cutting 3,000 jobs, including 500 at the new Seattle headquarters. Geekwire (our local Seattle technology news outlet) has had some of the best coverage of Expedia over the past few years and broke the story. I will share my analysis later, but what this might mean for the OTA giant and its many supplier relationships remains to be seen...Stay tuned.

Google’s New Vertical Search Features a Big Hit With Travelers
(“Google’s Customized Travel Search Features Receive Massive Traffic in the U.S.: New Skift Research,” Skift Travel News on Feb 18, 2020)
In case anyone is in need of further evidence of Google’s growing prominence in online travel, Skift’s recently released report, “A Deep Dive Into Google’s Impact on Travel 2020,” provides ample details. In particular, the report details the growing prominence of Google’s vertical search features for flights, hotels and short-term rentals. In 2019, the search offerings for just two of these segments (flight and hotels) enjoyed traffic (as measured by number of U.S. user visits) almost equal to Expedia and combined. The 674 million visits in 2019 represent a 28 percent increase over 2018. Although total annual visits are far fewer in key international markets (e.g., UK, Germany, France and Japan), the annual growth rates in these markets are nearly double the U.S. rate.

Both Google and Expedia are featured prominently in this week’s Update, particularly Barry Diller and his many colorful statements made during last week’s Expedia earnings call. Enjoy.

Under Mounting EU Pressure, Google Adds Direct Links
(“Google Bows to European Pressure and Tests Adding Travel Rivals’ Direct Links,” Skift Travel News on Feb 10, 2020)
When it rains it pours, particularly if you are Google…Last week, the search engine’s many ongoing regulatory battles in the EU took center stage as Google began its appeal of the European Commission’s $2.6 billion fine for allegedly biasing shopping results and engaging in anti-competitive behavior in vacation rentals (alleged by 34 travel competitors who wrote letters to the European Competition Commissioner). At the same time, news of Google’s limited testing in the EU of a “carousel” of unpaid direct links to Google travel competitors placed above Google’s own featured travel products and services garnered the attention of many. Tests of these new direct links – for travel, jobs and local listings – have apparently been underway for the past several months in countries, including France, Germany, Spain, Italy, Belgium, Denmark, the Netherlands, Sweden and the United Kingdom. What effect these new links might have on European regulators and whether Google will roll out these changes in the United States (where it is also facing antitrust scrutiny) remain to be seen. More to come…

We lead off this week’s Update again with a story regarding ongoing regulatory activity in the EU. Enjoy.

European Commission Close to Wrapping up its Multi-Year Pricing Probe into Meliá Hotels and Tour Operators
(“Meliá Hotels' EU pricing probe heads to conclusion,” MLex Insight on Feb 7, 2020)
All indications signify that the European Commission is close to completing its multi-year pricing investigation into European tour operator pricing. The investigation is the result of an effort that began in May 2015 when the Commission announced a broad review of the online distribution of goods and services. In February 2017, the Commission focused its efforts on probes into (a) retail price maintenance efforts by electronics manufacturers and (b) the systematic partitioning of the EU market by both video game publishers and tour operators (and certain hotel partners like Meliá Hotels). As for tour operators, the Commission was focused on allegations that some of the largest European tour operators (Thomas Cook and TUI) and/or hotel groups were using geo-blocking technology to restrict access to certain discounted rates to residents in certain EU countries while providing those rates to residents in other EU countries (i.e. location-based discrimination). The announcement that regulators were prepared to discuss the results of their probe last week signals a likely end to the Commission’s investigation and upcoming announcement of enforcement remedies.

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Greg Duff
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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