Airbnb Tries a Different Tactic in Mexico: Giving Regulators What They Want


An Airbnb listing in Isla Mujeres, Mexico. In Mexico, the company is making an effort to work directly with government regulators to collect and remit taxes. Airbnb

Skift Take: Learning from your previous missteps is always a good thing. But is it enough to simply collect and remit taxes? What happens when regulators press for more restrictions?

— Rachel Bronstein

When Elvira Fernandez decided to turn her Mexico City apartment into a temporary rental space through Airbnb Inc., she never imagined she’d be cashing in as much as 50 percent more than a long-term lease would’ve yielded.

Fernandez has a lengthy list of reasons why Airbnb is her best bet: She doesn’t have to deal with lawyers, guarantors, unpaid rents or bad tenants. She receives the money on time, directly from Airbnb, and can immediately cancel a reservation if a visitor misbehaves. Not that she’s had to resort to that; her experience so far has been nearly perfect.

“My first rental was a couple that stayed for a month and a half, so I’ve been really lucky,” the 39-year-old historian said by telephone from Mexico City. At first, she thought it’d be a tough sell because her apartment is in a residential suburb, not exactly a tourist magnet. But that hasn’t been the case. “I already have my apartment booked from January to May of next year. Imagine that! It’s guaranteed money.”

Airbnb has noticed the success of property owners like Fernandez. The home-sharing platform has set its eyes on the Mexican capital as its next big market after its business there almost tripled in 2016, making it the one of the company’s fastest-growing cities.

New Approach

Airbnb opened its first offices in Mexico City earlier this year and, in a move that surprised many, sought to ward off the criticism that has plagued it in other parts of the world by agreeing with the local government to collect and remit a 3 percent occupancy tax. Announced last month, the new levy equals what hotels pay in the city. In a sort of test case, the company tried to ward off the multiple legal problems it has faced in cities such as New York and Barcelona by giving the authorities, and hotel associations, more of what they crave: regulation.

“We have some pretty big numbers in Mexico,” said Nathan Blecharczyk, Airbnb’s co-founder and chief strategy officer, in an interview in San Francisco. “Home-sharing is very popular there, and the local government is excited about the benefits we can bring.”

The company recorded more than 1.5 million visits to the country via its platform from June 2016 through May 2017, he said. Travel within Mexico rose in the first couple of months this year as a weaker peso made it more affordable for foreigners to come enjoy the famous beaches, while discouraging locals from traveling abroad.

Airbnb is valued at $31 billion, surpassing the market caps of Hilton Worldwide Holdings Inc. and AccorHotels in Europe. The home-sharing website takes a commission of 6 percent to 12 percent from guest fees, in addition to a small fee it charges hosts. The company has no expenses related to maintaining and cleaning properties.

The 3 percent tax in Mexico is the first of its kind in Latin America, and the company is studying whether it can replicate it in other cities. “We want to strike the right balance between the governments and our users,” Blecharczyk said. “If there are concerns, we can work together.”

Mexico could use the extra revenue. In 2015, the country ranked last out of all OECD members in its tax-to-GDP ratio, which at 17.4 percent is half of the organization’s average, according to the latest data available. Whether the Airbnb deal will be enough to assuage the concerns of hotel groups is another question.

While Alberto Albarran, the Mexico City Hotel Association’s director, agreed that the measure is “positive,” he said it doesn’t go far enough. “We still have to pay licenses, permits, social security, income taxes, have fire alarms, seismic alarms and payroll, just to name a few,” he said in an interview at his office. “There are still many challenges.”

Blecharczyk’s response? “There will always be a powerful lobbying group wanting more.”

Growing Income

Already, Airbnb has become a cottage industry in Mexico, spawning more entrepreneurs. Fernandez offers advice and sets up profiles for would-be Airbnb landlords for 2,000 pesos (about $110).

Agustin Samano, a 34-year-old mechanical engineer who has hosted Airbnb guests, came up with AlohaBNB, a platform to help hosts manage their rentals.

“Changing sheets, welcoming guests, and cleaning everything takes quite some time,” he said in a phone interview from Zapopan, Jalisco, where the company is based. AlohaBNB takes a 10 percent or 15 percent cut of the rent, depending on which package the host chooses.

Airbnb now boasts 73,000 Mexico listings. The most popular state is Quintana Roo — home to world-famous destinations like Cancun, Playa del Carmen and Tulum. It’s followed by Mexico City, Jalisco and Baja California Sur, home to Los Cabos.

In Mexico, where the murder rate is at the highest since at least 2001, Airbnb hasn’t yet faced any additional challenges because of the surge in violence and is relying on the safety checks put in place throughout the world to alert travelers of bad neighborhoods and shady listings, said Blecharczyk. “It has served us well in Mexico,” he said.

For years, the company has faced pressure from governments saying its home-sharing platform squelches the housing supply — which is already tight in many popular cities — by providing landlords with incentives to turn apartments into illegal hotels. Until recently, the startup had taken a combative approach to some city regulators, pushing back on the idea that hosts should have to register their apartments with city officials.

In May, Airbnb settled long-standing disputes with the city governments of New York and San Francisco, two of the company’s most lucrative markets. In San Francisco, Airbnb agreed to require that hosts register its rental properties with the city. In New York, the company agreed to permit its hosts to rent only one unit at a time, the home where they live.

That’s what makes the 3 percent Mexico City tax stand out. The company sidestepped an issue it likely knew it was going to face and set off on the right foot.

“At least there’s now the perception that those involved in renting out their properties through Airbnb are paying the same as hotels,” said Alberto Miranda, a partner at Deloitte Mexico who specializes in tax and legal services. The government is now tapping into a new source of income, so it’s a win-win situation, he said.

There could still be some tax-related hiccups, said Bernardo Reyes-Retana, a lawyer at Gonzalez Calvillo Abogados. For instance, there’s really no way for the government to know how much each host is earning from renting out rooms or apartments.

The issue isn’t Airbnb’s responsibility — the company doesn’t get into any levies the hosts should pay regarding the extra income, and instead has a disclaimer reminding hosts that they’re responsible for any taxes due, recommending they check their local rules and regulations.

“It’s become a very convenient tool for people and has been such a boom that Mexican legislation has fallen short,” Reyes-Retana said.

Fernandez has been consulting tax experts to understand what her obligations are as an Airbnb host and how to go about them.

“I like to go to bed with peace of mind,” she said. “That’s why I pay my taxes.”

©2017 Bloomberg L.P. This article was written by Andrea Navarro and Olivia Zaleski from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

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AmEx Is in Hand-to-Hand Combat With JPMorgan Over Rewards Cards

American Express

AmEx responded in March to competition from other banks by offering customers of its Platinum card $200 of free Uber rides, while raising the annual fee. American Express

Skift Take: The success of JPMorgan Chase’s Sapphire Reserve Card has forced American Express to compete and spend the most in at least nine years on its card rewards. It’s time to check if you have the most generous card.

— Sean O’Neill

Wooing those affluent credit-card customers is getting expensive.

American Express Co. spent the most in at least nine years on rewards last quarter as it worked to retain customers lured by a spate of recent offerings from competitors. AmEx, which has described its core U.S. card holders as those with annual income over $200,000, has seen wealthy customers flock to new products like JPMorgan Chase & Co.’s Sapphire Reserve.

AmEx’s Doug Buckminster, the president of global consumer services, said in March that his company has been in “hand-to-hand combat” with JPMorgan as issuers sweeten rewards to attract business. Spending on American Express cards was flat in the second quarter, while revenue posted a surprise increase, helping profit top analysts’ estimates.

JPMorgan made a splash last year with its Sapphire Reserve card featuring an initial sign-up bonus of 100,000 points, drawing so many applicants it temporarily ran out of materials to mint it. AmEx responded in March by offering customers of its Platinum card $200 of free Uber rides, while raising the annual fee. Users are also able to earn quintuple reward points at eligible hotels booked through AmEx’s website.

“We made some significant investments in the U.S. on both the business Platinum and consumer Platinum card and that is really driving a really nice result,” Chief Financial Officer Jeff Campbell said Wednesday on a call with analysts. He said AmEx added 2.7 million new customers in the quarter.

Last month, AmEx announced it won exclusive rights to issue credit cards for Hilton Worldwide Holdings Inc., ending an agreement in which the lender had shared the business with Citigroup. The news ended a string of defections that began in 2015, the year AmEx lost its largest co-brand partner, Costco Wholesale Corp., to Citigroup.

Jenny Surane

Profit Beats

There were many signposts of progress this quarter,” Chief Executive Officer Ken Chenault, 66, said Wednesday in a statement announcing quarterly results. “The work is not complete, but we’re now moving forward with a stronger foundation.”

Net income fell 33 percent to $1.3 billion, or $1.47 a share, from $2.02 billion, or $2.10, a year earlier, when AmEx recorded a $667 million gain from the sale of its Costco loan portfolio, according to the statement. The average estimate of 22 analysts surveyed by Bloomberg was for adjusted profit of $1.44 a share.

Worldwide billed business, a measure of customer card spending, was little changed at $269.6 billion, but rose 8 percent excluding the impact of severing its Costco relationship. Revenue increased less than 1 percent to $8.3 billion, exceeding analysts’ estimates, while expenses climbed 21 percent to $5.8 billion, fueled by a 9 percent jump in card rewards to $1.93 billion.

The company set aside $584 million for bad loans, a 26 percent boost from a year earlier, largely due to growth in lending and a higher write-off rate, the company said. Write offs will probably continue to climb as the company’s portfolio shifts following the Costco breakup, Campbell said on the call.

Campbell also said the lender expects full-year adjusted revenue growth to exceed the earlier forecast of 5 percent to 6 percent, without giving a new number. He reiterated guidance of full-year profit per share of $5.60 to $5.80.

AmEx shares slipped 1.1 percent to $84.99 at 6:03 p.m. in New York. The stock gained 16 percent this year through the end of regular trading, compared with the 6.6 percent advance of the S&P 500 Financials Index.


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How the Digital Concierge Is Reshaping the Hotel Industry

Skift Take: Hospitality brands who want travelers to book directly on hotel websites should work to optimize the customer experience from pre-booking to post-stay. Download this report on the rise of the digital concierge for free!

— Dawn Rzeznikiewicz

Today, most people book their hotel stays on the web. Unfortunately for the hotel industry, more people are reserving their visits using a third-party site. Despite pushes from big brands like Hilton in the past couple of years to get customers to book directly, hotels are still struggling to win the booking war.

Fortunately for hotels, online travel agencies (OTAs) can’t provide the seamless end-to-end experience travelers are looking for that goes well beyond the initial booking. A new report from [24]7 noted that while travelers may be getting a discount in price on sites like, they’re also signing up for a disjointed guest experience. So how can hospitality brands come out on top? The report, “Hospitality and the Digital Concierge,” says hotels can get ahead by creating a digitally powered, personalized customer service experience from pre-booking to post-stay with Digital Concierge.

By giving customers a mobile option to easily ask questions, confirm dates and chat with the front desk, hotels can provide a seamless guest experience and offer their customers big benefits.

This report will:

● Define what hotel guests traditionally expect from a concierge service, and why that’s vital, and achievable, digitally

● Illustrate how embracing digital allows hotels to reach customers at every point of the booking experience, from room selection to post-stay feedback

● Spotlight the three types of digitally-collected data that helps to provide guests with contextualized assistance

● Recommend strategies to maximize on-site concierge and front-desk staff

● Show how creating a digital guest experience ensures brand loyalty and leads to repeat bookings

For more insights on how Digital Concierge is creating a more seamless guest experience, download the full report for free here.

This content was created collaboratively by [24]7 and Skift’s branded content studio, SkiftX.

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Air France-KLM Thinks the World Needs an Airline for Millennials

Air France-KLM Group

Visuals from Air France-KLM’s new Joon airline. The group is targeting millennials. Air France-KLM Group

Skift Take: It’s official: We’ve hit peak millennial.

— Patrick Whyte

Air France-KLM Group will start flights this autumn of its Joon reduced-fare brand that will target millennial customers as Europe’s biggest carrier seeks to fend off growing competition from discounters such as Norwegian Air Shuttle ASA.

Joon, previously code-named Boost, will initially offer medium-haul services from the airline’s Paris-Charles de Gaulle airport base and begin long-haul routes in mid-2018, the company said Thursday in a statement, reiterating earlier plans. The unit, which the carrier describes as complementary to the Air France mainline brand rather than a low-cost airline, will be led by digital-services and direct-sales executive Jean-Michel Mathieu, 48.

The brand will be positioned to serve primarily adults aged 18 to 35 and is part of Air France-KLM Chief Executive Officer Jean-Marc Janaillac’s strategy to increase earnings amid intensifying competition. The proposed mix of flights to European cities and destinations further away would follow Norwegian Air’s expansion into trans-Atlantic and Asian routes. Janaillac’s plans for Joon have been complicated by the need to end labor strife dating from his predecessor Alexandre de Juniac’s term as he seeks to hold back spending.

Janaillac has hammered out deals for Joon flight attendants to work under contracts separate from Air France labor agreements, while pilots will retain most of their original contract conditions from the main division after agreeing to 40 million euros ($46 million) in cost savings including giving up some days off.

The name Joon, which echoes the word “jeune” for “young” in French, is “short, punchy and international” and marks a “lifestyle brand” designed for a worldwide audience, Air France said. The business was “entirely designed” to win over millennial-generation customers whose lives revolve around digital technology, it said.

Operations will start with six medium-haul planes, with four added for the long-distance flights next year, an Air France spokeswoman said by phone. While the company has outlined an electric-blue corporate color for Joon, more information on cabin livery and other service details will be unveiled in September, she said.

©2017 Bloomberg L.P.

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Smart Travel Companies Leverage Tech Giants Rather Than Fear Them


A white paper examining the future of travel distribution suggests traditional travel companies could benefit from partnering with newer platform companies such as Airbnb. Airbnb listings are pictured here. Bloomberg

Skift Take: A new white paper critiques today’s industry mania for mergers, which is driven by a fear of rising digital gatekeepers such as Airbnb, Google, and Expedia. The contrarian take is refreshing but begs questions.

— Sean O’Neill

Management consultants famously borrow your watch to tell you the time.

A possible case in point may be a new white paper created by the management consultancy A.T. Kearney and sponsored by travel technology giant Amadeus.

The consultants quizzed external industry experts about how 70 trends — from nationalism to the rise of new programming standards — might change the distribution of airline and hotel inventory.

The management consultants have come back with four possible scenarios. By a happy coincidence, they found that “the traditional aggregator for the travel industry — global distribution systems [meaning, companies like Amadeus] — will remain relevant under all scenarios.”

It seems that “hubris leading people to be caught by surprise” was not one of the 70 trends analyzed by the authors of the report.

The critique here is not that the Madrid-based distribution giant is likely to disappear in a decade’s time. On the contrary, publications like The Economist have called like Amadeus “the ineluctable middleman” for good reason.

The critique instead is that the report would have gained in persuasiveness if it had entertained the idea that so-called “black swan” events may catch executives off guard.

Forget “go big or go home”?

That issue aside, the white paper — “What If? Imagining the Future of the Travel Industry” — is compelling because it crystallizes and challenges some common assumptions.

One widespread idea that the report implicitly critiques is this: To deal with technological disruption, many executives think you have to “go big or go home.”

In other words, there has been a recent mania for mergers and achieving scale among airlines, hotel groups, online travel companies, travel management companies, cruise lines, wholesalers, and tour operators.

The report argues that the merger mania has been driven by many travel executives believing that they must consolidate and do more vertical integration to combat the growing power of “digital gatekeepers” that are heavily visited by consumers, such as Alibaba, Airbnb, Amazon, Expedia, Facebook, Google, LinkedIn, and WeChat.

But history suggests that the passion for consolidation is cyclical. The current push for achieving scale may also sputter out, predicts one of the experts spotlighted by the white paper — Martin Cowley, a one-time CEO of the Asia Pacific division of Amadeus’s rival Sabre and currently a consultant.

“There is a lot of anxiety in the industry about the encroachment of tech giants,” says Cowley. “Much of the anxiety is misplaced and could lead to poor investment decisions.”

Cowley argues that two factors that have halted consolidation in the past may rear their heads again soon: the complexity of merged operations (which often become unmanageable for executives), and a lack of consumer appeal (given that consumers have not historically fallen in love with one-stop shopping).

So what is a travel executive to do? If merging one’s way to greater negotiating power with digital platform giants isn’t the best choice, what is?

One option is to focus on understanding the needs of your customers and how to solve their unmet needs, according to one of the paper’s authors, Yelena Ageyeva-Furman, senior principal from A.T. Kearney.

“What we see across all industries is that, where there is a pain point for consumers, that is exactly where disruption is going to happen and where new players may challenge your company’s position,” she said in an interview.

Ageyeva-Furman advises racing to identify and solve points of friction before other companies beat you to it.

She cautioned that spending energy trying to defend against the perceived threat of giants like Amazon and WeChat can be a dangerous distraction.

what if amadeus future travel

Travel Industry Frenemies: A Love Story

The white paper cautions travel executives that the business case for gatekeepers like Google to try to intervene and take market share in travel is vulnerable to geopolitical events, such the threat of increased regulation and a closure of physical and virtual borders for both people and data.

The authors predict that, if the world opts for more openness, interconnectivity, and growth, companies like Google are more likely to invest in trying to take a larger share of the travel distribution pie because the potential rewards will be bigger.

For instance, a favorable, deregulated, globalized business environment would increase the potential rewards such platform companies could earn by investing in tools that enable the personalization of trips, where software programs can accurately predict the preferences of a traveler for details of their trips, from transportation to the type of pillow they like when sleeping.

Yet regardless of how geopolitical events play out, the report argues that executives should focus more on how to gain or maintain competitive advantage in specific niches and segments of their business and be willing to cooperate selectively with tech “gatekeeper” platforms like Google and Alibaba to the extent those partnerships can improve one’s market position via one’s other immediate rivals.

Alex Luzarraga, vice president of corporate strategy, said in an interview that he thinks the platform companies not specialized in travel, like Alibaba, Amazon, and Facebook, and the ones that are specialized, like Airbnb, Expedia, and Uber, aren’t going to go away.

But their size shouldn’t scare travel suppliers. There is more to gain by seeking partnerships with them.

Luzarraga thinks travel companies can thrive if they look for ways to complement the tools that technology platform giants (Google, Alibaba, etc.) provide consumers with their solutions. Examples he gives include providing richer travel content to enhance the data those platforms already have, or by marrying data sets to provide more personalized service to customers during the booking process.

To its credit, Amadeus didn’t push A.T. Kearney to specifically predict the future of the world and its impact on travel distribution. The paper sketches out four scenarios, and doesn’t say one is more likely than the other.

Some people may find that frustrating. (“Just tell me what’s going to happen and what to do!”)

Yet the track record for predictions by experts isn’t great. Large-scale studies testing the accuracy of predictions by experts show they’re often no better than chance, according to “Superforecasters,” a 2015 book by Wharton professor Philip Tetlock.

Amadeus advocates that travel companies do similar scenario-planning exercises for stress-testing their company strategy. Your company could come up with a handful of industry outlooks and assess how those trends — from regulations to demographic shifts to new consumer behaviors — may affect your company’s strategy.

Once you’ve described the scenarios, you can monitor trends. When one scenario of the bunch appears to be materializing, you can act accordingly by implementing a plan rather than reacting in an uncoordinated way.

Sadly, the paper doesn’t give advice on how to structure scenario-planning to avoid common mistakes, such as having excessive self-confidence in your own company’s impregnability. But by a happy coincidence, A.T. Kearney says it’s taking on new clients to do scenario-planning for them.

Here’s a pro tip: After they borrow your watch, be sure to ask for it back.

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Google Is Testing Vacation Rental Search in Its Hotel Price-Comparison Tool

This apartment, based in Paris’s 15th arrondissement (or neighborhood), is available on and was listed yesterday for a booking of 8 to 14 people via Google’s “hotel search.”

Skift Take: In tests involving about 7,000 property listings in Europe, Google is checking if travelers would like to use it to search and book vacation rentals. Online travel rivals should be on the alert.

— Sean O’Neill

In the past month, some Google searches have been revealing an option to comparison-shop vacation rentals.

In our checks Tuesday, Skift could find vacation rental filters for Barcelona, Berlin, Bordeaux, Cologne, Dresden, Frankfurt, Lisbon, Madrid, Munich, Milan, Naples, Nice, Nuremberg, Paris, Palermo, Porto, Reims, Rome, Seville, and Venice.

The results are limited to a small subset of alternative lodging inventory similar to traditional vacation rentals. Collectively we counted about 7,000 property listings. That is a mere smattering of the potential rental listings in Europe.

Our search Tuesday of and for the term “hotels in Paris” unveiled the option to filter the results by choosing “vacation rental” from a drop-down menu for “accommodation type.”

In the Paris example, applying that filter turned up only 420 apartments — a sliver of the more than 50,000 available for rent in that city according to short-term rental leader Airbnb.

Doing a search on a straightforward phrase like “vacation rentals in Paris” didn’t turn up the feature. Only searching for a phrase like “hotels in Paris” cued the search box to appear.

google vacation rental search hotels rome
Google is doing the test in multiple markets, too. A search on French site for “hôtel à Paris” found similar results. A search on German site found results for vacation rentals, or Ferienwohnungen, too.

It is a cross-device test, too. We saw the option to have vacation rental filters on tablets and smartphones when running searches on Google in the U.S., UK, Germany, and France.

google vacation rental search hotels rome is the biggest vacation rental player to have listings in the tool. It is providing the bulk of the content. But only a handful of its 753,465 vacation rental listings is being pulled into Google’s system today.

To be sure, there were a few listings from other players, like Expedia Inc.-owned

Yet we found none from the dedicated vacation rental platforms of Airbnb, FlipKey, HomeAway, or Tujia.

Caveats aside, the test is a milestone for Google. It is the first time we’ve seen the search giant attempt to add vacation rentals as a lodging category alongside hotels.

Google declined to comment for this story. Skift has inferred this is a test given the search giant’s history of doing similar public tests before releasing new features.

When typing “hotels in Rome” on the U.S. edition of, the search engine fetched its search widget, which featured a few hotels plotted on a map with some sample rates.

One of the drop-down menu options under a new “accommodation type” filter is “vacation rentals.” Clicking that took us to a full search listings page with about a dozen listings.

google vacation rental search july 2017 1

Gradually expanding test

The tests were first noticed a few weeks ago by Koddi, a Fort Worth, Texas-based marketing technology vendor. Koddi noticed the search results were available in Paris and Berlin.

Koddi CEO Nicholas Ward says that his team has noticed stray vacation rental listings accidentally getting into the Hotel Ads interface for a few years.

But he says the listings of the past few weeks represent a different, purposeful test by the search giant.

Ward explains: “In the past, some vacation rental listings have been coded and miscategorized by advertisers in the data distribution process, and have slipped through and appeared as if they were hotels. And sometimes the properties have confusing hybrid models like ‘aparthotels,’ and these have also slipped through.”

In a couple of rare exceptions, this is still true. When searching the “vacation rental” listings for Vienna, we saw one for serviced apartments available by the day. That could plausibly have slipped through as a “hotel” due to poor categorization and its hybrid sales model.

He says this is the first time Google has tested having a drop-down option to filter accommodation results by “vacation rentals” as a category separate from hotels.

That said, some of the listings we saw Wednesday appear to be owner-managed and it seems like the owners have posted a business listing on Google Places and Google Maps and gotten automatically included in the search results.

Ward says, “It appears that if the property is bookable on a Hotel Ads advertiser and is matched to Google’s listing through their integration, it has a chance to show up as bookable.”

Google hasn’t figured out all of the details yet.

When asked about how property owners could try to get listed in Google search automatically, Koddi’s Ward noticed a note from Google’s “help” section about the types of listings that are “restricted” from appearing and that note includes “rental or for-sale properties, such as vacation homes, model homes or vacant apartments.”

Ward says, “The advice I’d (unofficially) give to a property that wanted to show up would be to set up a listing, make sure you categorize your place as a Holiday Apartment and make sure there is a rich description, images, and some reviews.”

Ward’s team at Koddi has reason to watch this development. The company helps travel digital marketers with reporting and bid management tools for placing ads on metasearch platforms like Google Hotel Ads, TripAdvisor, Kayak, and Trivago. Vacation rentals could potentially open up a new category of business for it.

google vacation rental search

Fixes to be made

In the tests, Google has not modified its search interface to provide options more suitable to the vagaries of hunting for a vacation rental.

An analysis earlier this year by a hotel digital marketer found that Google Hotels Ads’ traffic volume has been outpacing TripAdvisor hotel metasearch.

If Google dived seriously into vacation rental metasearch, the first companies to be most affected might be the dedicated vacation rental metasearch players, such as and AllTheRooms.

But other online travel players, especially metasearch brands like Kayak (which offers instant booking integration with some partners like and TripAdvisor (which offers rentals on its main site and sister site FlipKey) should also be on the alert.

The biggest gainer might be the technology vendors that help property managers connect to platforms like Google, such as the Dutch company NextPax.

But the entire ecosystem of property managers and tech providers that Skift Research covers in “The State of the Global Vacation Rental Market 2017” could be affected.

Ward says Google has to fix three shortcomings: the user experience, the content, and the number of reviews.

He adds: “Airbnb is the gold standard for having the filters someone shopping for a vacation rental prefers, and these filters aren’t there in Google’s search. If I were looking for, say, a three-room property for ten guests, Airbnb or HomeAway would be much faster and more intuitive to use.”

“From a content perspective, photos are crucial for deciding which rental to choose. The imagery is not there yet in Google, in contrast to the hotel content, which is super rich in text descriptions and imagery.”

“The third challenge is review density. We only see a handful of reviews for each property in most of these test examples. That’s not enough to give a traveler confidence to book.”

Ward adds: “But these are all data and engineering problems and commercial partnership issues, and Google is a great position to solve them if the tests show that there’s consumer demand.”

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Here’s Why the Next Great U.S. Airfare Battle Will Take Place in Denver

Frontier Airlines

A Frontier Airlines jet sits in front of a hangar in Denver. Frontier is growing at its hometown airport, and United Airlines is prepared to compete. Frontier Airlines

Skift Take: It’s not clear whether United or Frontier will win this battle in Denver. But what is nearly certain is that passengers will be the beneficiaries. They’ll likely find cheaper fares.

— Brian Sumers

Looking for cheap airfares? You might consider flying to Denver, or at least connecting there.

Frontier Airlines, one of two larger U.S. discount airlines, said this week it will expand in Denver, beginning later this year and continuing into summer 2018. From Denver, Frontier plans to launch 21 new destinations, including Albuquerque, Oklahoma City, and Ontario, California, with fares on some routes as low as $39, each way. It’s part of a broader Frontier expansion, in which the airline will fly 85 new routes within a year. 

But for competitive reasons, Denver is probably the most interesting market. Denver is among United’s most profitable hubs, the airline’s president, Scott Kirby, said last year, and United is expected to aggressively defend it. Southwest, which operates a large focus city there, likely will do the same — and that should lead to lower fares on competitive routes. United may match Frontier’s pricing, offering its own cheap no-frills fares, called Basic Economy, in markets the two airlines fly.

“In the near to medium term, any time you have capacity growth from anyone, but particularly a low-cost carrier, it’s going to lead to some pricing pressure,” Kirby said Wednesday on United’s second quarter earnings call.

For Frontier, the expansion seems like a logical move. It is based in Denver, and before it was purchased in late 2013 by a private equity firm, which turned it into a ultra low-cost airline, Frontier flew many of these routes. Over time, though, it canceled many flights to medium-sized and smaller cities, preferring larger markets, including Miami and Philadelphia. It’s generally easy to fill planes between two big cities at cheap prices.

Relying on connecting passengers

Before it changed its model, Frontier was a full-service airline, and it connected a significant number of passengers through the hub. However, after it changed its strategy, it stopped facilitating most connections, instead selling point-to-point fares. Operationally, it’s simpler for an airline to sell nonstop fares from, say, Miami to Denver, than sell one-stops from Miami to Jackson, Wyoming. Among other things, with point-to-point sales, an airline need not worry about moving checked luggage from one flight to another.

However, with the Denver expansion, United’s Kirby said Frontier again will need to rely on connecting passengers. That’s probably the only way Frontier can fill many new flights, especially to smaller markets like Fargo, North Dakota and Fresno, California.

And Kirby, who generally speaks candidly, said he’s not sure cost-conscious Frontier can pull it off. There’s a reason, he said, that ultra low-cost carriers often don’t sell connections. In the United States, Spirit occasionally offers connecting itineraries, but Allegiant Air does not. In Europe, many discount airlines historically required passengers to purchase two tickets to connect, though that’s changing. Ryanair said earlier this year that would allow passengers to make connections on one ticket.

“When you’re trying to run a connecting model, you have to slow down the aircraft utilization,” Kirby said. “You have to wait for passengers and employees to connect and airplanes to be timed correctly. You have to staff up. You have peaks and valleys. You’ve got to connect bags, which is one of the most operationally complex things we do.”

As an example, Kirby mentioned a Frontier flight from Orlando to Denver that might be two hours late. Today, while it may annoy the passengers, it doesn’t matter much for the airline. But in the future, Frontier may have make a calculation. Does it hold flights to Albuquerque or Ontario to wait for connecting passengers from Orlando? Does it find hotel rooms for passengers and put them on a Westbound flight the next day? Or does it let the Albuquerque or Ontario flights depart on time, and then buy tickets for customers on United later the same day?

“It is exponentially more complex to run a connecting model,” Kirby said.

Kirby guaranteed to the analysts that United will win in Denver.

“I have watched the ULCC growth for the last decade,” he said, referring to ultra low cost airlines, “and this is the best news i have heard in the last 10 years.”

A Frontier spokesman did not immediately reply to a request for comment.

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International Tourism to the United States Dropped in 2016


Foreign visits to the U.S. in 2016 began to drop off after last summer. Pictured are tourists in boats at Central Park in New York City. Skift

Skift Take: Many travel brands had said last year was tough as full-year international visits to the U.S. decreased in 2016 for the first time since 2009. We’ll need to wait until this time next year to see if this is a hiccup or a new trend.

— Dan Peltier

International tourism to the United States had been on an ascent over the past seven years as many economies recovered from the global recession of 2008 and 2009. But last year, that mountain of momentum hit a descent as nearly two million fewer international visitors traveled to the U.S. in 2016.

Last year, 75.6 million international arrivals (Canada, Mexico, and overseas) visited U.S. destinations, a 2.4 percent (more than 1.8 million) decrease in such arrivals from 2015, according to data from the U.S. National Travel and Tourism Office and U.S. Department of Commerce. The last year inbound tourism declined was 2009.

Only three of the top 10 countries for international visitation – Mexico, China, and South Korea – had more arrivals year-over-year. Some 81.9 percent represented leisure visits and 13.9 percent represented business travel.

Visits from overseas countries (not Canada or Mexico) were down 2.1 percent year-over-year while visits from Canada were down 6.8 percent and visits from Mexico were up 1.9 percent.

Brazil had the largest decrease (-24 percent) as that country has undergone political and economic turmoil in recent years (see chart below).

Top 10 Countries for Visitation to the United States in 2016

Country of Residence Percent Change December 2016 vs. 2015 Percent Change Full-Year 2016 vs. Full-Year 2015
Canada 0.5% -7%
Mexico -10% 2%
United Kingdom -6% -7%
Japan -4% -5%
China (excluding Hong Kong) 14% 15%
Germany -5% -10%
South Korea 10% 12%
Brazil -24% -24%
France 5% -7%
Australia -6% -7%


Source: U.S. National Travel and Tourism Office

The drop in international visitation had been projected by travel organizations such as U.S. Travel, but most of 2016 brought good news for international visits. Data show that overseas and Canadian visitation didn’t start decreasing until November when visits from both regions dropped two and seven percent year-over-year, respectively.

That timeframe coincides with the U.S. presidential election in November although it’s not clear what impact politics or the election had on international visitation last year.

But Brand USA, the national destination marketing organization for the U.S., found that most top visitor markets except China are less inclined to visit the U.S. because of the current political climate.

Brand USA, which began operations in 2011, attributes 4.3 million incremental international visitors since 2013 to its marketing efforts. Anne Madison, Brand USA’s chief strategy and communications officer, said the drop in visitors is in line with projections from other sources and is reflective of the strong dollar impacting international traveler decisions to visit the USA.

“To that end, we are continuing to emphasize through our marketing and communications efforts over all channels the inherent value in visiting the United States based on the breadth and depth of experiences available in the USA and the proximity of a range of destinations to, through, and beyond the gateways,” said Madison.

Visitor growth from overseas and Canada, however, began to slow year-over-year in June 2016 and January 2016, respectively. Visits from Mexico grew year-over-year each month last year but that growth was smaller year-over-year from September through December.

The decrease in international visitors is particularly notable as spending from foreign visits hit a record high in 2016 ($247.1 billion) even with fewer visitors and with a stronger dollar making trips to the U.S. more expensive for many international travelers.

Albeit, that’s only a 0.4 percent increase over 2015 and much of that increased spending was driven by Chinese travelers – one of the only markets to post an overall increase in visitation last year.

Countless factors besides currencies and politics determine why travelers choose to visit the U.S. or why they cancel or postpone a trip. While many destinations aren’t seeing any Trump slump so far this year that was widely projected, it appears there was a slump last year. It may be too soon for some cities and states to notice any significant changes in visitation this year but it’s evident that overall foreign visitation in the U.S. ended last year on a low note.

Ryan Wolkov

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Priceline CEO: Hotels Secretly Love Us Despite Accusations of Monopoly


CEO Glenn Fogel says he’s not worried about hotel lobby group claims that the fees of online travel agencies are excessive relative to the value provided. He spoke with Bloomberg’s Emily Chang outside of the Fortune Brainstorm Tech 2017 conference in Aspen, Colorado. Bloomberg

Skift Take: Priceline CEO Glenn Fogel says he wants travelers to think of’s name first when they start thinking about reserving homes and apartments for rental. He says a marketing effort is in the works to achieve that.

— Sean O’Neill

Priceline Group expects to be a fast-growing company over the next few years, but that it is despite some hotel lobbying efforts which CEO Glenn Fogel characterized as a sideshow.

Interviewed on Bloomberg TV outside of the Fortune Brainstorm Tech 2017 conference in Aspen, Colorado, which was broadcast Wednesday, Fogel draws a distinction between a hotel lobbying group and hotels themselves, which he implied liked Priceline Group practices just as they are.

Fogel says, “I’ve read some very nice things from some of the CEOs of hotel groups saying, ‘I’m not exactly sure where [the charges of oligopoly] came from.’”

The chief executive does not elaborate on where he read these written comments.

Fogel also echoes an argument he made during his company’s most recent earnings call that his portfolio of companies collectively only offer to consumers a single-digit percentage of the world’s hotels and vacation rentals. (In the past, Priceline and its competitor Expedia Inc. have each said they only have about 5 percent of the world’s travel inventory on their platforms.)

By that logic, it’s impossible that Priceline Group could be a monopoly, he says.

“People who say we have some sort of large market share should look at the statistics,” he adds.

His remarks come in the wake of news in May that the American Hotel & Lodging Association, a trade lobby that counts Hilton Worldwide, Hyatt, and Marriott International, as members, plans to step up a campaign to warn regulators and elected officials of so-called monopolistic tendencies by online travel agencies.

Priceline Group has the largest revenue and market capitalization of the online travel groups worldwide, so it potentially could be affected the most by such a campaign.

Not afraid of Airbnb competition

In other matters, Fogel said that he’s always on the alert for new competitors to possibly steal his company’s market share. He says Priceline Group has experience at surprising other companies and stealing market share, such as with the rise of’s success.

“We are used to coming out and undercutting bigger people, so I am aware that players much smaller than us who are coming up quickly. We watch what they’re doing.”

Fogel ignores talk about reports that Airbnb is building a flight search engine, focusing instead on noting that his company is managing the Airbnb threat by building out its rentals and vacation home product.

“I believe that the ability to see homes, apartments, and villas in the same search results as hotels is powerful,” Fogel says, noting that 100 percent of the company’s more than 700,000 listings are “instantly bookable,” something that rival online travel players can’t claim yet.

Fogel won’t reveal the type of marketing campaign he plans. But he says he wants travelers — especially Americans — to think of’s name first when they start thinking about booking homes and apartments for rental. He says a marketing effort is in the works to achieve that.

In response to a question about Google possibly having to make changes to its search results in Europe in response to concerns by European watchdogs. Fogel says he isn’t worried about the changes. He compared Priceline Group to being like “a wingman for a pilot,” with Google being the pilot. He says his company has hundreds of engineers that can quickly adapt to any changes Google makes.

Fogel adds, “If you’re a small player, you don’t have the luxury of having those technical people [to adapt to changes by Google].”

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Cities Want to Leverage Conventions Better to Drive Growth — Meetings Innovation Report

Hustle Con 2017

Hustle Con 2017 in Oakland, California was developed to provide an innovation event for non-tech startup founders. Hustle Con 2017

Skift Take: There’s a growing conversation in the U.S. about how city governments and convention bureaus can better pool their resources to promote their local startup and research communities to convention organizers.

— Greg Oates

The Future of Meetings & Events

I’ve been speaking with a wide range of U.S. mayors, economic development executives, and convention bureau leaders this year about how cities are leveraging their innovation economies to secure more conventions in their high-priority sectors. And, how convention organizers can tap that knowledge base to drive higher business outcomes for their programs aligned with those sectors.

This week’s lead story shares data from our recent report, produced in collaboration with Meetings Mean Business: “Defining Conventions as Urban Innovation and Economic Accelerators.” There is a surprising lack of research evaluating how conventions drive long-term economic growth beyond the short-term delegate spend. So, we surveyed a selection of convention bureau executives about what they feel are the most significant legacy economic drivers that conventions deliver, along with what they see as the biggest obstacles to evaluating those drivers.

Read the full story below, and join me tomorrow at 2 p.m. EST for our webinar dissecting the takeaways from our report.

— Greg Oates

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Social Quote of the Week

“Elation, frustration & hard work: an intimate behind-the-scenes look at

@Lenovo on Twitter

The Big Picture

Cities Lack Research to Determine the Long-Term Economic Impacts of Conventions: City governments and convention bureaus would love to better understand the long-term economic impacts that conventions in advanced industries deliver to their cities, but there are a lot of challenges trying to establish metrics and tracking methodologies to accomplish that. Read more at Skift

U.S. Business Travelers More Likely to Drive Than Fly to Meetings: It can be easy to forget that most U.S. business travelers aren’t road-warriors hitting multiple cities in a week. Sometimes we fixate too much on those who travel the most instead of the majority, who spend a day or two visiting clients or potential customers. Read more at Skift

Conference & Incentive Travel Launches ‘State of the Industry’ Report: In this annual survey, more than 150 corporate and agency event planners share their perspectives on business growth, mobile apps, event ROI, incentive travel, and the most innovative event planning organizations. Read more at Conference & Incentive Travel

Meetings Mean Business Relaunches ‘Worth Meeting About’ Campaign: U.S. Travel’s meetings advocacy group, Meetings Mean Business, is bringing back its “Worth Meeting About” promotional campaign to emphasize that every great innovation in history began with a face-to-face meeting. Read more at Meetings & Conventions

Adjusting Perspectives Regarding Disruptions in Meetings and Incentives: Almost 60 percent of planners have experienced some form of disruption in their events, estimating that nearly a quarter of their events have been affected in some way. The IRF 2016 Event Disruption Study explores the frequency, causes, sources, and impact of recent disruptions in meetings and incentive travel. Read More at Incentive Research Foundation

GBTA Gives Update on Business Travel Spending: The GBTA report states that much of business travel’s contribution to the economy accrues directly to industries that serve business travelers, but their supply chain beneficiaries received an additional indirect contribution of $132 billion. Read more at Meetings Today

Next Generation Meetings

The Cities Summit at SXSW — A Fresh Look at the Future of Cities: The new Cities Summit at SXSW 2018 in Austin is designed to bridge the dialogue between city leaders and decision makers with SXSW communities — digital creatives, entrepreneurs, designers, artists and others — for a fresh look at how we shape our cities, and how they shape us. Read more at SXSW

Who Is Winning During Comic-Con: Airbnb or Hotels? Just as hotels are capitalizing on the 130,000 comic book fans, superhero junkies, and Game of Thrones zealots flooding the city, so too are home-sharing hosts. According to this post, many hosts are raising their customary rates above what one would expect during an otherwise busy July weekend in San Diego. Read more at The San Diego Union Tribune

Augmented World Expo Sets the Example for What an Augmented Reality Conference Should Be: AWE has its roots in what originally amounted to a large-scale augmented reality DIY meetup group. Now that the technology is finally catching up to the imaginations of the developers, the conference is gaining increasing traction. Read more at Next Reality

West Coast Entrepreneurs Surprised, Impressed by Albuquerque: The City of Albuquerque’s sponsorship of Hustle Con in Oakland, the nation’s biggest conference for non-tech startup founders, made considerable strides in differentiating the city from its competitors in the Southwest region last month. Read more at Innovation Central ABQ

The Alexa Tech Conference Is Coming to Chattanooga: Chattanooga’s 10-gig internet service and expanding Innovation District helped lure Amazon’s Alexa event, showcasing the future of artificial intelligence-powered voice tech. Read more at


The Skift Meetings Innovation Report is curated by Skift editor Greg Oates []. The newsletter is emailed every Wednesday.

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