Skift Travel News Blog

California Governor Gavin Newsom signed into law on October 7 a bill to ban mandatory hidden fees — also called junk fees — starting July 1, 2024.

“The price Californians see will be the price they pay,” said Rob Bonta, the state attorney general.

As Skift previewed, the law broadly requires upfront disclosure of any mandatory fees by hotel companies, online travel agencies, car rental companies, online concert ticket sellers, and others.

If a company doesn’t comply, a consumer could seek “at least $1,000” in damages via the state’s existing consumer protection claims processes. (See the law, embedded below.)

Junk Fee Reform

It’s unclear how California’s new law will impact companies in mid-2024.

California has the largest population of any state in the U.S., and so some big companies choose to apply its requirements nationally.

Yet there could be lawsuits from industry groups, and corporations could find workarounds to keep profitable fees. California has rules on fees for car rentals, but many online travel agencies choose to display those fees in ways that vary depending on jurisdiction.

Another wrinkle: Newsom hasn’t yet taken a position on another bill awaiting his signature, Senate Bill 537. He has until Saturday night to decide whether to let that bill pass into law. The bill would prohibit businesses that sell lodging for up to 30 days in California from displaying a room rate that doesn’t include all fees or charges (except government-imposed taxes) as of July 1, 2024.

It’s possible the Governor may feel the bill he’s signed already covers this, making a law specific to hotels unnecessary. Either way, the state’s 6,000 hotels and thousands of short-term rentals are currently facing new rules about the display of so-called junk fees, such as resort fees and housekeeping fees. 

Here’s the legislation that’s just passed:

Michelin Guide, whose star ratings are coveted by restaurants worldwide, said on Thursday it would begin designating “the most exceptional hotels.”

Like with the restaurant rankings, Michelin intends to create a stir by revealing its list of hotels at a ceremony in the first half of 2024.

Unlike its restaurant ratings, Michelin will award its favorites “keys” instead of stars. Michelin will judge hotels by criteria including local character, design, decor, and amenities — among other factors.

Michelin bought the online travel agency Tablet Hotels in 2018. The site’s hotel vetters use guest reviews to help evaluate hotels. For several weeks now, the Guide has been offering a selection of over 5,000 hotels globally on its site, long-listed from top-reviewed properties on Tablet Hotels. This long list of about 5,000 hotels will be the ones Michelin reviewers will use to award “keys.”

Generator Group, which owns or runs 21 hotels, gave a financial update on Monday that underscored the post-pandemic boom in travel.

London-based Generator Group forecasted that it’s on track to produce revenues of about $238 million (€225 million) this year — which would represent a 25% jump over the company’s revenue in the pre-pandemic year of 2019.

The privately held company anticipates this year it will produce earnings before interest, tax, depreciation, and amortization of about $80 million (€75 million). That would represent a 50% jump in earnings compared with 2019 — highlighting strong pricing power in so-called “compression,” or high-demand, markets.

PE-Backed Hostels

Private equity firm Queensgate Investments bought Generator for $480 million (€450 million) in 2017, and the group’s flagship brand is Generator, a set of premium economy hostels. Queensgate spent about $400 million in 2019 to acquire Freehand Hotels, which operates properties in New York, Chicago, Los Angeles, and Miami, and folded that into the group.

Generator said it has nearly 12,000 beds in ten countries. It told the Financial Times, “in the next year, it is planning to launch 10 more sites worldwide under an asset-light model where it does not own the long-term lease, including a new hostel in Bangkok.”

Queensgate is a part or whole owner of nine Generator-run properties. Generator also acts as a management company for other hostels.

For more context on Generator’s strategy, watch the interview with its CEO from last year’s Skift Global Forum East (below) or read Skift’s piece Generator’s Takeover of Paramount Hotel in Times Square Is Part of Broader Hostel Reboot.

Hyatt said on Thursday it would shift its strategy in marketing vacation rentals. It plans to launch before year-end a short-term vacation rental platform called Homes & Hideaways by World of Hyatt.

Hyatt also said it intended to sell its vacation rental management business — Destination Residences Management — to a company called Lowe, which, through an affiliate, will run it under Lowe and Coral Tree.

The Homes & Hideaways project will spotlight U.S. vacation rentals managed by Lowe, such as a home by the sea in Hawaii or a ski chalet in Colorado.

To book these vacation rentals, customers have to be one of the 40 million members of the hotelier’s loyalty program.

The move follows other plays in vacation rentals by major hotel groups, such as Marriott’s Homes & Villas by Marriott Bonvoy and Accor’s OneFineStay.

Hyatt’s CEO elaborated on the company’s broader strategy on Wednesday at the Skift Global Forum (story below).

Hyatt Sees a Business Travel Rebound

Today’s edition of Skift’s daily podcast looks closer at Hyatt’s business travel optimism, Lufthansa’s strong signs, and Airbnb’s international playbook.

Read More

Marriott International on Wednesday debuted Four Points Express by Sheraton, a midscale hotel brand aimed at Europe, the Middle East, and Africa.

The brand aims to target the “midscale” segment of affordable lodging. Marriott estimates that about a half-million independent or locally-branded hotels are in this segment — many of which may be ripe for conversion to a global brand.

The first hotel will be a 52-room property opening later this year in Lara, a district of Antalya in Turkey. Next year, another property in Turkey is likely to open. So is a 201-guestroom property in London near the Euston rail station.

Other hotel groups are also focusing on midscale brands, such as IHG’s Garner,
Hilton’s Spark brand and an upcoming (as-yet-unnamed) extended-stay brand, and Hyatt’s Hyatt Studios extended-stay brand.

Marriott International said it was streamlining its ongoing process of installing charging infrastructure for electric vehicles at its properties by signing a deal with the vendor EV Connect as its preferred EV charging provider for its properties in the U.S. and Canada.

Marriott has already installed roughly 2,400 chargers and charging stations for electric vehicles, and this first preferred vendor approach may help speed up adoption.

“With EV Connect, we can offer properties an end-to-end turnkey service, simplifying the planning, installation, and maintenance processes while simultaneously delivering high-quality service our guests expect,” said Andrew Bodziak, senior vice president of global operations at Marriott.

Owners and franchisees can choose among suppliers. Some Marriott hotels have also installed Tesla Superchargers, for instance. Others provide discounts off the use of ChargePoint charging stations.

Marriott’s move, detailed here, comes at a time of growing interest in the space. Hilton earlier this month said it intended to install roughly 20,000 Tesla vehicle chargers at 2,000 hotels in North America through next year.

The European Union is on track to ban marketing claims such as “climate neutral” by 2026 that scientifically based certification can’t validate.

Claims such as “carbon neutral,” “environmentally friendly,” and “eco” will require companies to verify their products’ merits through third-party certification schemes. 

Travel companies are among the industries that may be affected by the looming ban. For example, airlines may need to change booking interfaces that offer “climate-neutral” flights in exchange for buying carbon offsets supporting projects that lack credibility.

The rules okayed on Wednesday still need formal approval from the European Union parliament and its member states — expected in November. But it would be procedurally rare for the rules to be denied.

The move came on the same day United Nations Secretary-General Antonio Guterres said “humanity has opened the gates to hell” in its failure to stop rising carbon emissions and a forecasted increase in extreme weather.

CDS Groupe, a hotel booking platform for business travel, is expanding into the German market through an acquisition. 

The France-based company said this week that it has acquired Corporate Rates Club, the business travel segment of TourisMarketing Service GmbH. 

Terms of the deal were not disclosed. 

Corporate Rates Club will continue to operate independently with its full staff,  CDS Groupe said. The CRC tool is available through a customized online booking portal or through integrating its hotel offerings into a third-party online booking engine. 

The deal is part of what CDS Groupe says is a plan for international growth.

The company in 2022 acquired Rydoo Travel, an online booking tool, from Marlin Equity. 

The combined company said it completes about €800 million annually in hotel bookings on behalf of its clients, which include corporations and business travel agents. The acquisitions have also allowed the buyer to expand its portfolio of contracts with hotels. 

The company now has 300 employees in France, Italy, Poland, Germany and Croatia.

CDS Groupe was founded in 2001 and is managed by founding shareholder Ziad Minkara.

Selina, a hotel and experiences brand focused on youth travelers, said on Wednesday that its financial metrics were trending in the right direction as it reported earnings results.

In the second quarter, the company generated $52.5 million in revenue, a bump of 15.9% year-over-year. Factors included higher occupancy rates, reductions in corporate overhead, and essentially higher revenue per customer.

The company also narrowed its losses. It reported $700,000 in adjusted earnings before interest, taxes, depreciation, and amortization, compared to a $5.8 million loss in the same period a year ago.

Selina said it was “aggressively executing a comprehensive real estate portfolio optimization plan” that “includes renegotiating all leases through abatements, deferrals, and terminations.”

In the quarter, the company also collected $10 million as the first phase of a planned strategic investment of up to $50 million led by Global University Systems (GUS), which runs for-profit universities. It also drew $10 million under its $50 million credit facility with Latin America’s Inter-American Development Bank (IDB).

Selina’s stock price dipped below $1 last month, where it has remained. If Selina’s stock remains below $1 for about a month, the Nasdaq exchange will issue a notice of a plan to delist the shares from trading. Selina will then have 180 days to push the value of shares higher.

The company aims to report a continued upward trend, which could appeal to investors.

“Selina continues to focus on three key strategic areas: improving cash flow, advancing toward profitability, and building our brand,” said Rafael Museri, co-founder and CEO, in a statement.

From today’s Daily Lodging Report newsletter: Nikkei Asia published an article on Hilton planning to expand its luxury offerings in Asia. Hilton will be bringing its Waldorf Astoria brand to Malaysia, Vietnam, India, and other countries for the first time as part of its plans to open 25 new luxury hotels in the Asia Pacific region over the next few years. That’s up from the 33 luxury hotels it currently runs in the Asia Pacific.

In 2027, Hilton will open India’s first Waldorf in Jaipur, the capital of the state of Rajasthan. Hilton has a management agreement with the Dangayach Group, which will own the hotel.

Hilton is also bringing Waldorfs to Kuala Lumpur, Malaysia; Hanoi, Vietnam; and Sydney, Australia. In China, Hilton will add its top-of-the-range hotels in Xi’an and Shanghai, while Japan’s first Waldorf will open in Osaka in 2025, followed by Tokyo in 2026.

JLL estimates that the Asia Pacific region has 560,000 luxury hotel rooms, a number that is expected to increase by 90,000 in 10 years.

See Skift’s story on Hilton’s Asia Pacific expansion for context.