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Edition XVIII | July 8, 2016
The Travel Technology Association
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Monthly analysis & insight on policy issues affecting the travel technology industry



Washington, D.C.
United States Congress
Halftime on Capitol Hill

As Congress hustles to complete unfinished business before recessing on July 15th for the rest of the summer, it is instructive to consider what has happened since the start of the year and what is still left to be done in the remainder of the 114th Congress. 
 
FAA Reauthorization
The year began with a flurry as the House Transportation & Infrastructure Committee, under the chairmanship of Bill Shuster (R-Pa.), released an ambitious six-year Federal Aviation Administration (FAA) reauthorization bill that includes massive reforms to the nation’s air traffic control system.  The committee marked up the 273-page proposal in a marathon 17-hour session that ended with bitter disagreements among the membership and a vote that fell largely along party lines.  The air traffic control overhaul has proven to be too much for the rest of the House, and despite Shuster’s best efforts the bill is not yet ready to reach the House floor. 
 
Seeing an opportunity to pick up the ball and run, the Senate Commerce Committee released its own bill in early March.  While still addressing hot topics such as unmanned aerial vehicle standards, aircraft certification, and safety in aviation, the Senate bill steered well clear of any air traffic control reforms.  As such, the committee approved the bill unanimously and sent it to the Senate floor where it passed in early April. 
 
Travel Tech worked with members of both committees to ensure that the bills sought to promote full transparency in air travel for the American consumer as well as a more competitive environment in the aviation industry both domestically and globally.  Travel Tech’s proposal for a national commission to study the state of competition in the air travel market landscape was supported by numerous stakeholders representing business and leisure travelers, national travel associations, and travel technology innovators.  While the House unfortunately adopted an amendment that will only serve to frustrate the consumer’s ability to see and compare the all-in cost of air travel, Travel Tech successfully fought back efforts to do the same in the Senate version.  The Senate also adopted a reasonable approach to ensuring that families can be accommodated and seated together on flights.
 
The House and Senate remain at odds over how to proceed on FAA reauthorization.  Current aviation law will expire on July 15th and another short-term extension will be passed in mere days.  Over the next year and well into the next Congress, Travel Tech will continue to press members in both chambers on the need for meaningful reforms in aviation policy that will provide consumers with better choices, better service, and more transparency. 

 
Hotel Bookings
In May, the House Subcommittee on Commerce, Manufacturing, and Trade examined a bill that would place new onerous disclosure requirements on perfectly reputable and extremely popular online travel companies for no apparent reason.  The bill also authorizes the Federal Trade Commission (FTC) to study whether or not consumers are being harmed while booking hotel rooms through online travel companies. 
 
Fortunately, members of the subcommittee saw this legislation for what it was: yet another attempt by the trade association representing the nation’s largest hotel chains to sully the reputation of the online travel industry by manufacturing a problem that no other organization or consumer group can substantiate.  The bill did not advance beyond the subcommittee hearing.
 
Travel Tech is proud to represent an industry that created an entire marketplace where consumers can shop for hotels, flights, car rentals, and other travel-related activities across thousands of brands on a single platform, all while making informed choices and saving money in the process.  Competition leads to lower prices and better service, and Travel Tech happily advocates for these principles on Capitol Hill.
 

Congressional Calendar for Second Half of Year
Time is not on the side of congressional action.  Congress will recess on July 15th and not return until after Labor Day.  Both parties will hold their national conventions by the end of the month – the Republicans go first in Cleveland and the Democrats will follow in Philadelphia – while the entire month of August will be spent campaigning.  And while Congress is scheduled to be in session in September, they will gavel out again for all of October and through the November 8th elections. 
 
Fortunately for all members – current and those newly elected in the fall – the policy issues affecting the American traveler will still be here when the new Congress is sworn into office in January, and Travel Tech will gladly educate them on the benefits of independent travel distribution.

California | New York
Short-term Rental Regulations

Major Cities Move to Limit Short-term Rentals through Advertising Requirements and Platform Liability

San Francisco, CA
This month the San Francisco Board of Supervisors unanimously approved a new short-term rental regulation in that city. The new ordinance threatens to fine short-term rental platforms for any short-term rental listing that does not contain a valid registration ID from the city. This raises serious legal questions about the responsibility of short-term rental platforms when it comes to policing third party users and their listings.
 
New York 
Earlier this month, the New York legislature moved to outlaw the advertising of homes in what New York designates as class A multiple-dwelling buildings, where an owner is not present during a guest’s stay. The law targets owners, operators, and hosts who advertise those residences for less than 30 days, imposing significant punitive fines ranging from $1,000-$7,500 simply for listing one of these properties. The bill presently awaits a signature or veto from Governor Cuomo.
 
Los Angeles
In late June the Los Angeles Planning Commission voted 5-4 to back a proposal that would cap the number of days for homesharing at 180, and significantly curb traditional vacation rentals with a maximum of 15 rental nights per year in Los Angeles. Even more concerning is the inclusion of a provision that imposes fines on short-term rental platforms for listings that are not registered with the city and requires the platforms to regularly provide the city detailed data on their users. The proposal will next be heard by the city council.
 
Travel Tech will continue to advocate for fair and reasonable regulations when it comes to short-term rentals, raising questions about platform liability, concerns about the impact such restrictive ordinances have on compliance and the traveler experience, and the need for local governments to recognize the growing demands of the modern traveler. 

 

U.S.A.
Peer to Peer Economy: GUEST POST

Old Consumer Protection Laws Don't Necessarily Fit Sharing Economy

Online ratings, background checks and GPS tracking give users choice and safety.

Within the sharing economy, consumers participate in an entirely new marketplace and are empowered as part of the historic shift of leverage from traditional businesses. It's not just a different venue for delivering existing products and services. It's a new commerce where consumers can obtain the experience and exactness of products and services they desire: how they want them, when they want them, and at the price they want them.

Consumers are accessing a plethora of new options whether it is ride-share, home-share, web-to-door household services, or even eating out in someone else's home. In turn, this transformative economy should trigger a matching reconsideration of how to apply laws and regulations governing commerce. For consumers' benefit, the sharing economy requires a rethinking of what consumer protection should be.

Emphatically the goals of consumer protection should remain relevant and vibrant, including prohibitions on discrimination, deceptive marketing and fraud. Yet today certain consumer regulations often are not applied in ways that match consumer needs. It is inappropriate to assume that laws largely devised in the 1960s and '70s are applicable to today's fast-developing technology and internet-based commerce. Rather than government action seeking consumer relief after the fact, consumers are now themselves a driving force behind the level of convenience and cost, and risk, they decide to accept.


Federal and state regulators need to embrace the sharing economy as a marketplace where consumer choice, satisfaction and protection is already flourishing. These consumers have a completely different set of expectations. They recognize renting a room in someone's house need not always include ceiling sprinklers or an evacuation map on the back of the door; they understand web-based ordering of their ride-share puts the driver under surveillance, and on notice, to be caught for an illegal act; and they accept that ordering a craft from a virtual bazaar likely won't have same return policy as a big box store.

As with all consumer-focused businesses, complaints against sharing-economy companies make news. Instances occur when a company might not supply enough transparency for some consumers to make well-informed decisions, such as sufficient pictures of a product offered or a lack of an updated background check on the provider. For some potential customers, traditional businesses provide a measure of familiarity and reassurance, and that's the point — consumers can vote with their feet.


But overregulation through the misapplication of legacy consumer protection regimes does not further the growth of our economy. Commonly an imbalance of information favors the merchant such as where a host knows how clean or noisy his room may be, or a driver knows how safe or fast he may speed. Consumer protection laws can overcome this imbalance but at a high cost that can lead to a scarcity of services, inefficiencies in their delivery, or lack of more competitive pricing. Everyone with a bad cab story knows this.


Technology Assists Decision-Making
Yet sharing-economy companies provide information to consumers to overcome this information disadvantage. Online feedback, rating systems, background verification, GPS tracking and instant transaction details, along with the digital storage of all this information, are ways to exchange critical decision-making details. As technology addresses information shortcomings in order to empower consumers to get what they pay for, excessive and inapplicable regulation can backfire by limiting choices of consumers.


Instead regulators should work to eliminate unnecessary and burdensome rules that run counter to unique consumer interests. Regulators are well-acquainted with legal balancing tests that can weigh the empowerment of consumers participating in a sharing industry versus burdens on their choices. For instance, federal and state law enforcement agencies can challenge local government entities that use codes and rules to favor existing industries, sometimes in a monopoly-like fashion. With their anti-competitiveness mandate, state attorneys general have stepped into the fray by pushing back against local commissions and legislative bodies seeking to saddle sharing-economy companies with rules for competitive disadvantage.

Regulators should desire to cede power to consumers. When a smartphone app can provide driver profiles, actionable rankings and map tracking to allow a consumer to better protect herself at the point of service than government licensing and penalties, why not let that technology blossom? When internet consumer reviews can reveal more information about a business than any government inspection, why not encourage consumers to judge the standard of service they receive? When the so-called "gig economy" opens new avenues of employment for fellow Americans, why accumulate workplace restrictions, unproductive worker rights and government-mandated costs that limit their opportunity?


Rather than bolster a dated regulatory framework to the detriment of our growing economy, government should recognize that pro-consumer innovation enables consumer-led protection. A new regulatory model should seek to free consumers to optimize their own economic benefits, choices, risks and enjoyment.

Joe Jacquot originally wrote this piece for The National Law Journal. He is a partner at Foley & Lardner and previously served as the chief deputy ­attorney general of Florida, where he focused on consumer protection law.

 

Washington, D.C.

Steve's Corner
Unfiltered Travel Reviews

According to a recent survey from Travolution, 90% of travelers find that reading online reviews is important when making travel decisions, but only 45% trust the reviews posted to a company’s own site.  As Joe Jacquot said in the National Law Journal, “technology addresses information shortcomings in order to empower consumers to get what they pay for.”
 
Independent distributors of travel and websites that host consumer reviews (like Expedia, Priceline, TripAdvisor or Yelp) have played a critical role in ensuring the public has access to unfiltered user-generated reviews.  Whether considering options for a hotel, a restaurant, a tour or an attraction, consumers can easily learn from and trust the experiences of others without worrying about reviews being skewed by a company’s self-interest.
 
The sharing economy is embracing the efficiency of user reviews as well.  Short-term rental platforms often allow owners, operators and hosts to review guests and vice versa, and rideshare platforms do the same with riders and drivers.  When it comes to making travel choices – the more information the better.  Travel Tech companies are doing what they can to help with that, and consumers benefit from it. 
 
Lawmakers and regulators would be wise to leverage the self-regulating nature of consumer reviews to create more efficient consumer protection policies.  Businesses live and die by their cumulative ratings.  This phenomenon, the self-policing and self-regulating of a marketplace, protects consumers and encourages suppliers to offer a better experience—and it produces information that is more valuable, useful and actionable than what most government actions can provide. 


 
- S. Shur

Washington, DC

Member Spotlight

Amadeus Introduces New Hospitality Division 

Lee Horgan, CEO of Amadeus Hospitality, announced the company’s new hospitality division, which brings recently acquired companies NewmarketItesso, and Hotel SystemsPro under the same roof as Amadeus’ former Hotel IT division.  On what stands in the way of streamlined technology in the hospitality industry, Horgan wrote:

“Technology within the hospitality industry is still very fragmented between traditional IT specialists, global technology providers, and in-house creations. The hospitality industry has not kept pace with others, primarily due to the high total cost of ownership associated with current systems, point to point interfaces and legacy siloed systems built in closed architecture.”

You can read the full blog post and more on Amadeus’ work in hospitality IT
here.

 
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