OTA & Travel Distribution Update – Jan. 6th, 2017

Our first client OTA & Travel Distribution Update for 2017 is below.  Not a lot to report this week, so we will keep the Update short.

  • Short-Term Rentals’ Share of Lodging Industry Expected to Continue Growing [Short-Term Rentals].  In the latest report attempting to predict the long-term effect of short-term rentals on the lodging industry, financial analyst Susquehanna International Group (SIG) predicts that by 2018 short-term rentals will make up nearly 20% of the overall global lodging market.  SIG further predicts that Booking.com and Expedia (and their broad range of offerings, including short-term rentals) stand the most to gain from the continued growth in the short-term rental industry.

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Private accommodation travel bookings to reach $106 billion by 2018
Private accommodation will account for almost a fifth of global hospitality bookings within two years – and the online travel agency giants are tipped to benefit.
Tnooz News Feed on Jan 3, 2017

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OTA & Travel Distribution Update – Dec. 30th, 2016

My final client OTA & Travel Distribution Update for 2016 is below. It has been a quite week in the world of distribution. Here’s to a 2017 filled with much success and happiness. Happy New Year.

  • Loyalists More Likely to Use Airbnb [SHORT-TERM RENTALS]. According to a December 22 report issued by Morgan Stanley, hotel loyalty program members are the most frequent users of Airbnb. Apparently, this phenomenon remains true even if you consider the fact that Airbnb users are likely to be those that travel most frequently. Just imagine what might happen if Airbnb created an effective loyalty program . . .
  • Priceline Is About to Lose Its First-Mover Advantage [OTA/METASEARCH]. No big surprise here. With Expedia’s recent announcement that it was joining TripAdvisor’s Instant Booking platform, Priceline (the first and until now, only, OTA to use the platform) is about to lose the first-mover advantage it previously enjoyed. Expedia’s announcement is likely good news for both Expedia and TripAdvisor and may finally provide TripAdvisor the critical mass it needs to make Instant Booking a success.

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The failure of hotel loyalty programs to defend against Airbnb, quantified | qz.com
If hotels are counting on loyalty programs to keep their best customers away from Airbnb, they might want to come up with a Plan B. Members of hotel loyalty programs are more likely than other travelers to have booked a stay in Airbnb.
Quartz on Dec 28, 2016

How Could Expedia’s Instant Booking Partnership Affect Priceline?
Priceline (PCLN) was the first OTA (online travel agent) to become part of TripAdvisor’s Instant Booking platform, joining it in late 2015. The Priceline partnership was an important step in the Instant Booking platform’s success.
Yahoo! Finance Lodging News on Dec 27, 2016

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OTA & Travel Distribution Update – Dec. 22nd, 2016

Our weekly client OTA & Travel Distribution Update for the short week ending December 22, 2016 is below.  This week’s update is brief one.

  • Long-Awaited Outcome to US Airways Suit Is Finally Here [GDS].  A federal jury found last week following an 8-week trial that Sabre had restrained trade by forcing unfavorable contract terms on its supplier, US Airways, and awarded US Airways $15 million in damages.  At issue were the terms and conditions contained in Sabre’s GDS contract, including the contract’s “full content” provision that required US Airways to provide Sabre access to all of US Airways’ seats.  According to US Air, Sabre’s market dominance (38% of US Airways’ revenues came through the GDS, while the GDS enjoyed 58% market share) put the airline at an extreme disadvantage when trying to negotiate the critical GDS contract.  The $15 million damage aware was considerably less than the $40 – $70 million sought by the airline.  While I understand and appreciate there may be critical differences between the airline and hotel industries, it seems foolish to think that we won’t one day soon see an enterprising lawyer well versed in U.S. anti-trust law make assertions similar to those made by US Airways against one of the large OTAs on behalf of his or her hotel industry client.
  • Build Your Ideal Vacation Rental [SHORT-TERM RENTALS].  In an effort to promote the availability of HomeAway’s vacation rental listings as part of Expedia’s core lodging offerings (yes, hotel and vacation rentals are now both available on Expedia’s website), Expedia launched a microsite this past week named Dream Holiday Home.  The site allows users to build their dream vacation home by choosing among a number of variables, including location, styles, interiors, recreational activities, etc.   Just what everyone needs . . .

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Jury Awards US Airways $15M In Sabre Antitrust Trial
A federal jury in Manhattan on Tuesday awarded US Airways $15 million after finding that trip-planning giant Sabre Inc. restrained trade by forcing unfavorable contract terms on the airline, but found Sabre did not conspire with other firms not to compete for better airline fares. Sabre will have to pay …
Law360 – Transportation on Dec 21, 2016

Expedia pushes vacation rentals with Dream Home game
Expedia wants to get more of its core audience interested in (and buying) vacation rental trips, so is trying everything it can to …
Tnooz News Feed on Dec 21, 2016

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The New 2016 Form I-9: Smart, Flat and Complicated

November 2016 held more than one shock for many in America. Not only did the presidential election cycle come to a dramatic close, but the government introduced its new Form I-9, Employment Eligibility Verification.

First introduced in 1986, the “Form I-9, Employment Eligibility Verification,” must be completed for every new employee. Over time, it has been expanded from one page to two. And its instructions have grown from less than a page, to six pages for the 2013 edition to 15 pages of Instructions – more than four for the employee section alone – for the 2016 edition in English and in Spanish.

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OTA & Travel Distribution Update – Dec. 16th, 2016

This week’s OTA and Travel Distribution Update for the week ending December 16, 2016 is below.  This week’s Update contains an update on one important recent court decision involving OTAs.

  • California Supreme Court Issues a Potentially Troubling Opinion [OTA / Tax].  Although I don’t often comment on the multitude of OTA tax decisions issued across the country, I felt that the recent California Supreme Court decision finding (once again) in favor of OTAs warranted some discussion.  Although the California Court, like so many courts before it, based its decision on the rather uncontroversial conclusion that the OTAs were not “Operators” (the party expressly obligated to collect the occupancy tax under the applicable San Diego Municipal Code) of the subject hotels, language found elsewhere in the decision caught our attention.  Specifically, in at least three sections of the Court’s decision, the Court indicates that California hoteliers (not OTAs) could be held liable for occupancy taxes calculated on the full sell rate (as opposed to the net rate) to the extent that hoteliers set the sell rate (e.g. via mandatory markups or margins added to the net rate).  In other words, hoteliers that seek to control the ultimate sell or retail rate for their rooms could be opening themselves up to tax liability on that sell or retail rate.  While language found in most negotiated OTA contracts requiring the OTA to indemnify the hotelier for claims regarding unpaid tax liability would appear to protect California hoteliers from the effects of this recent decision, it may be time to take a close look at your contract’s indemnity provision.

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Local governments can’t collect taxes from online travel firms
In a loss for local governments, the California Supreme Court decided Monday that online travel companies such as Expedia Inc. are exempt from paying hotel occupancy taxes. The ruling came in one of several lawsuits filed by California cities and counties against the online firms.
LA Times – Orange County on Dec 13, 2016

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What Hotels Should Prepare for When Integrating Augmented Reality Games at Their Destinations

The future has arrived, and it has a strange sense of humor.  Pokémon Go — an “augmented reality” game that requires players to travel to real world locations to capture imaginary monsters through apps on their mobile devices — is changing how millennials choose their travel destinations and hotels.  These games have inspired a new generation of travelers, and present novel opportunities to businesses in the hospitality sector.

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OTA & Travel Distribution Update – Dec. 9th, 2016

Our weekly client OTA & Travel Distribution Update for the week ending December 9, 2016 is below. Nothing too earth shattering this week, so we will keep things short . . .

  • Short-Term Rental Regulations Continue to Evolve [SHORT-TERM RENTALS].  If I were asked by a law student today to identify areas of the law most likely to need new lawyers in the future, I’d have to say the short-term rental industry.  Monitoring San Francisco’s every-changing regulatory landscape alone will require at least 3 or 4 lawyers.  In a surprising move, the mayor of San Francisco last week vetoed legislation that would have capped the number of nights that a host could make her residence available for nightly rentals at 60.  Only a few days earlier, Airbnb made several large concessions over earlier adopted City legislation requiring hosts to register with the City (which legislation remains subject to a pending (and still unresolved) federal lawsuit brought by Airbnb).  Oh to be counsel to Airbnb . . .
  • New Definitions of “Direct Booking” Begin to Emerge [OTA / METASEARCH].  Tnooz last week featured a story highlighting a discussion among panelists at a recent travel industry event co-hosted by Tnooz and the London School of Economics.  Although the discussion was focused on airline distribution, the points made have equal application to the hotel industry.  While reading the story, I was again struck by the fact that distributors and suppliers (at least those realizing the challenge of supporting and managing the dozens of existing and anticipated future distribution channels used by travelers) are beginning to strike a much more conciliatory tone about the distributor / supplier relationship.  Yes, everyone on the surface remains a competitor, but many of these competitors are starting to realize the need to leverage each other’s technological advances, historical relationships with travelers and customers, etc.  These new relationships are likely to challenge the traditional notions of “direct” and “indirect” bookings.

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S.F. mayor vetoes 60-day cap on Airbnb rentals
San Francisco Mayor Ed has vetoed the city’s 60-day hard cap on the amount of time residents can rent out their homes through Airbnb and similar competing sites.
NY Business Journal Residential Real Estate News on Dec 9, 2016

When a Direct Booking (Maybe) Isn’t a Direct Booking – Tnooz
Where does the intermediary’s relationship with the customer end and the airline’s begin and what exactly is a direct booking? When you gather travel distribution execs together, inevitable discussions ensue around collaboration, emerging technologies and the power of Google and other companies including Facebook.
Tnooz on Dec 5, 2016

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OTA & Travel Distribution Update – Dec. 2nd, 2016

Hello all,

With the new year, we plan to post portions of the OTA & Travel Distribution Updates that I prepare and circulate among our hospitality clients each week.  Although the posts will be a week or two behind the initial client updates, we hope that the information will nevertheless be relevant to those of you working in the digital marketing / e-commerce / distribution world.  We hope you enjoy and benefit from these new posts. Below is the weekly update ending December 2nd, 2016.

Happy Holidays everyone.

  • Add Instagram to Your List of Regulated Marketing Platforms [OTA / Social Media].  With surprisingly little attention from the hospitality industry, Instagram announced last month that it was introducing commerce to its widely used visual platform.  Not only does this development present hoteliers with some interesting new marketing opportunities (as described in the linked article by Sabre), but it also provides OTAs a unique opportunity to re-direct and ultimately capture potential travelers at a much earlier stage in the travel planning funnel (inspiration).  Hoteliers now need to add Instagram to the list of platforms (e.g. search, metasearch and reviews) that must be controlled and monitored in order to limit how their properties are featured by OTAs and other third parties.
  • Amazon Makes a Seattle Connection [OTA / Search].  Amazon announced this past week that its Alexa-enabled devices have learned a new skill.  With the Expedia skill enabled, Amazon’s devices can now provide users details on flights, hotels and other trip components booked through Expedia as well as allowing users to compare and book rental cars.  In prior Updates, we have included stories detailed the growing consensus (e.g. Rich Barton, Dara Khosrowshahi) that voice-enabled search is the new frontier in on-line travel.  If you have not already come to the realization yourself, you’ve heard it here first:  Alexa’s new skill is just the beginning.  Regardless of the success of this new functionality, OTAs with their large R&D budgets will do voice-enabled search better than anyone else.  Time to now add voice-enabled search to your existing search limitations and/or requirements in each of your distribution contracts.

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  • Instagram to become shopping platform?
  • Expedia partners with Amazon’s Alexa for voice offering
  • Airbnb agrees to concessions in European cities
  • Ctrip acquires Skyscanner

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“Shopping coming to Instagram” – what this means for hotels and travel marketers
With that simple headline, commerce arrived on one of the world’s most engaging visual platforms.
Tnooz News Feed on Dec 2, 2016

Book a trip with your voice? Travel giant Expedia launches new Amazon Alexa skill
Today, Expedia is rolling out a new skill for Amazon’s Alexa-enabled devices in advance of the busiest travel season of the year. With the Expedia skill enabled, travelers can ask Alexa for details on flights, hotel reservations, and other parts of their trip booked through Expedia. They can also ask …
GeekWire on Nov 30, 2016

Airbnb concedes to housing activists in two cities, limiting number of days entire homes can be rented
Airbnb and affordable housing advocates are fighting a battle in cities around the world. Today, Airbnb made a big concession that could herald a truce between the two sides. The company announced it will limit the number of days hosts in London can rent out homes they don’t live in.
GeekWire on Dec 1, 2016

China Focus: China’s Ctrip acquires Skyscanner
China’s top online travel agency Ctrip.com International is to acquire flight comparison site Skyscanner for 1.4 billion British pounds (about 1.74 billion U.S. dollars) and become its majority share-holder, sources with the companies said Thursday.
Xinhua News on Nov 25, 2016

What Employment Law Changes Should We Expect From the Trump Administration? Ask the Magic 8 Ball

magic 9If you had asked me one month ago to predict the winner of the presidential election, I would have been wrong. Therefore, rather than make my own [ill-fated] predictions of the changes that await employers when PEOTUS takes office, I consulted my trusty Magic 8 Ball. Here’s what it predicted:

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The New Overtime Regulations Are on Hold

On Tuesday, November 22nd, a United States District judge in Texas issued a preliminary injunction that blocks the U.S. Department of Labor (DOL) from implementing a controversial rule that would have expanded overtime protections from going into effect, at least for now.  The pending regulations were scheduled to go into effect on December 1, 2016 and would have more than doubled the salary level required for employees classified as exempt under the “White Collar” exemptions.  The Department of Labor estimated if the new regulations went in to effect more than 4 million workers would now be eligible for overtime.  The salary level is currently $455 per week or $23,660 per year.  The new regulations would have increased that amount to $913 per week or $47,476 per year.

The lawsuit was filed by 21 states and a coalition of business groups.  The judge found the state plaintiffs have established a prima facie case that DOL’s salary level under the final rule and the automatic updating mechanism are without statutory authority.  The judge then granted a nationwide preliminary injunction that prevents the regulations from going into effect pending further decisions from the court.

The timing of this decision provides some relief for employers scrambling to make sure they were in compliance with the new regulations.  However, since you were in the midst of looking at your exempt positions, it is a good idea to continue the analysis to make sure the employees you classify as exempt truly meet not only the salary level test, but the duties test as well.  If you have questions as to how this decision may affect your business, please contact Nancy Cooper at ncooper@gsblaw.com or 503.553.3174, or Diana Shukis at dshukis@gsblaw.com or 206.816.1475.

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