Regulators in Europe and elsewhere are in overdrive – they have a lot of catching up to do. Technology companies have grown so fast that legislation hadn’t really kept pace. It’s not light reading, but all of this has significant implications for hotel distribution and relationships within the travel industry ecosystem.
The most far-reaching legislation that has significantly impacted our world recently is the General Data Protection Regulation (GDPR), probably the strictest data protection law in the world. Although it applies in the European Union (EU), it binds organisations all over the world when collecting data from people in the EU. Due to the large amount of (sensitive) personal data and the fact that this data is constantly in circulation, the travel and tourism industry is heavily affected by the GDPR. If you want to compare the GDPR with data protection and security laws around the world, this website is for you. Effective date – 25 May 2018.
Package Travel Directive – This allows for strong cancellation rights on packages: With the new rules, travellers can cancel their package holiday for any reason by paying a reasonable fee. They can cancel their trip for free if their destination becomes dangerous due to war or natural disasters, for example, or if the package price is increased by more than 8% of the original price. Although the impact was skewed during the Covid 19 pandemic, this is an area that hotel and travel companies need to consider when creating and pricing packages. Effective date – 1 July 2018
Payment Services Directive 2 (PSD2) – Originally scheduled to come into force on 14 September 2019, but has been delayed until 31 December 2020. PSD2 aims to reduce fraud and improve consumer choice, in particular through strong customer authentication (SCA), which is required for all European e-commerce transactions. Effective Date – 31st December 2020 Enforcement Date UK – 14th September 2021 (more information here)
The Omnibus Directive, which came into force on 7 January 2020, aims to provide EU consumers with additional protection in situations where accommodation is available and bookable for EU consumers. For the hotel industry, this has implications for special offers and discounts. The discounts displayed on the platform of an online travel agency (OTA) should represent the actual savings for those booking. This means that the price used by hotel companies as a benchmark for the discount should be the lowest price available for bookings on that platform during a reasonable period of time before the discount. The reasonable period must be at least 30 days. Effective date – 7 January 2020
Digital Markets Act (DMA) – a regulation proposed by the European Commission in December 2020 and signed into law by the European Parliament and the Council of the EU in September 2022. The Digital Markets Act (DMA) came into force on 1 November 2022 and aims to make the digital economy fairer and more competitive. The DMA focuses on regulating the monopolistic behaviour of gatekeeper platforms. Gatekeepers are large online platforms, measured by annual turnover or market capitalisation, that are active in several EU Member States. Many well-known OTAs such as Booking.com and Expedia and their role are likely to be reviewed as part of this process. Being classified as a gatekeeper means additional checks and controls. Effective date – 1 November 2022
Digital Services Act (DSA) – The DSA imposes new obligations on digital service providers operating in the EU. The DSA focuses on more security for users, more transparency of platforms and better enforcement. The most important element for hotel companies is that the DSA targets the “secret sauce” of the big OTAs and other online platforms. It requires the platforms to share more on how their algorithms work. This should give bookers a better idea of who is trying to influence us and how, and allow bookers to decide for themsleves whether or not to trust. The law will come into force on 16 November 2022 and most companies have 15 months to implement it. Effective Date in all EU Member States – 17 February 2024.
What’s coming next? Short Term Rental Regulation is expected on the back of the DSA.
This is where legal meets distribution – organisations need to find time and resources to ensure that we stay compliant and optimise the benefits of these regulations.