One year ago, Russia annexed Crimea, a territory that had been in eastern Ukraine. Since then Western sanctions on Crimea have put online travel companies in an awkward position.
In December, US President Barack Obama issued a third executive order prohibiting American companies from doing most types of business with Crimea.
Since the executive order, the US-headquartered Expedia Inc brands and lines of business stopped offering flights to, and hotels and other travel components in, Crimea, a spokesperson confirmed.
If you search today on Expedia.com, for example, you'll see some listings for Crimean hotels, but they'll have “sold out” messaging. Customers are prevented from booking.
As of two weeks ago, Airbnb was still offering peer-to-peer rentals in Sevastopol, a city on the Crimean peninsula, and other areas covered by the executive order. On Tuesday, that had changed. A spokesperson said:
"To comply with international sanctions, the Airbnb platform does not permit bookings or listings in Crimea."
Priceline Group said that its group brands are compliant with the law.
Prior to our inquiries, the Priceline.com's US site had already pulled its hotel inventory in Crimea.
Yet as of Monday, the Priceline.com US site was still enabling the purchase of airline tickets from the US to Crimea. In one search, we found 39 ticket choices for the route between New York City and Simferopol, the capital city that is disputed by Russia and Ukraine.
Priceline responded by saying that its flight and hotel listings are compliant with the law. It had no further comment.
As of Friday Orbitz, not yet officially acquired by Expedia Inc, was offering flights to Crimea, including more than 100 itineraries to Sevastopol. It also had hotel options.
A spokesperson for Chicago-based parent company Orbitz Worldwide said on Tuesday:
"We had been waiting for OFAC to publish the final regulations to implement the Executive Order to determine the extent of the Crimea prohibitions.
Given the delay in the publication and knowing that others industry participants have moved forward on their own, we reassessed our position and are taking action to inhibit all travel to, from, and within Crimea from all of our brands.
Most of these inhibitions are already in place, and anything that might be remaining will be removed very shortly."
As of Friday, CheapOair, owned by New York City-based FarePortal, was offering flights to Crimea, such as 356 options for a New York to Simferopol itinerary. On Monday, a spokesperson for the company said it had no comment.
At publication time, CheapOair still offered hundreds of flights from the US to Crimea.
"OTAs don't offer tourism services"
In December the Council of the European Union issued a similar regulation, specifically saying:
"it shall be prohibited to provide services directly related to tourism activities in Crimea or Sevastopol."
Yet European-headquartered, online travel intermediaries interpret that regulation as something that doesn't apply to them. Tnooz couldn't find any European online travel company that had dropped Crimea from its listings.
One legal compliance officer for a European online travel brand spoke to Tnooz under the condition of anonymity because the company did not want to discuss its legal decisions in public.
The officer said that activities directly related to tourism (as specified in the EU regulation) are not what online travel companies preform. Instead, the companies merely facilitate bookings.
German hotel booking site HRS has many Crimea listings. So does for the Spanish conglomerate eDreams Odiego, such as eDreams.net, which offers flights to Crimea from destinations such as Paris.
Online travel agency Booking.com continues to offer direct bookings of hotels in Crimea, including more than 110 properties in Sevastopol. While Booking.com is the largest source of revenue for American conglomerate Priceline Group, the brand is headquartered in Amsterdam and considers itself subject to European rules.
A couple of metasearch companies say the regulation doesn't apply to them.
Skyscanner, based in Britain, said:
"We don’t believe the EU regulations apply to metasearch companies, such as Skyscanner, which enable travelers to search for travel options from different companies but which don’t directly provide tourism services.
As a global business we’re continuing to monitor the situation closely with the relevant regulatory bodies."
Trivago, a Germany-headquartered company recently acquired by Expedia Inc., continues to enable hotel booking for Crimea.
In the US, metasearch firms are also doing business as usual.
Kayak has plenty of flight and hotel offerings in Crimea. It said it is compliant with the law. Hipmunk, the US-based metasearch site, offers Crimean flight and hotel bookings, too. It declined to talk about its policy.
TripAdvisor, the world's largest source of user-generated reviews and a provider of metasearch bookings for hotels and flights, continues to offer its services regarding Crimea.
The US-based company declined to comment for this story.
But one aspect of TripAdvisor services that might be said to differ from metasearch is its Business Listings services, which enables hotels to pay a fee for enhanced digital marketing services to travelers worldwide.
For example, a hostel in Simferopol could pay a fee, either monthly or annually, for digital marketing services, such as adding its phone number to its TripAdvisor listing, adding special offers and mobile and desktop announcement, a mobile click-to-call option, and a property dashboard, and a photo slideshow.
When asked about this, the company said it had no comment.
A matter of interpretation
Travel companies are, of course, not the only businesses affected by the regulations. Take Google, for instance. It has suspended AdWords, AdSense, and Google Play in Crimea, solutions that all involved an exchange of services with Crimean companies for payment.
The US executive order does not have explicit wording stating exactly that "travel companies should not deal with Crimea and its entities." The order is instead broadly written.
The order's wording bans, among other things, the "indirect exportation, sale, and supply of services and technology from the US to the Crimea region of Ukraine."
This wording may be relevant because US travel intermediaries render technology and advertising services for Crimean accommodations on travel companies’ own websites or websites of their affiliates or partners.
For flights, the issue may be whether the carrier is based in Crimea, not the destination being Crimea, according to one company, which spoke with Tnooz anonymously, because it didn't want to discuss its internal policies in public.
By that interpretation, it would be okay to allow transactions for flights run by non-Crimean airlines.
Another travel company executive told Tnooz on background that he believed that there was an exception for travel services, related to the so-called Berman Amendment to International Emergency Economic Powers Act. That amendment includes the following language:
"The authority granted to the President by this section does not include the authority to regulate or prohibit, directly or indirectly ....
...any transactions ordinarily incident to travel to or from any country, including importation of accompanied baggage for personal use, maintenance within any country including payment of living expenses and acquisition of goods or services for personal use, and arrangement or facilitation of such travel including nonscheduled air, sea, or land voyages."
So the law may not be being broken by any of the travel companies.
But if the law is, in fact, being broken, the consequences could be huge. The US Office of Foreign Assets Control has the power to levy large penalties, freeze assets, and bar parties from operating within the US.
Case in point: in 2014, it reached a $1 billion settlement with the French bank BNP Paribas, in relation to violations of sanctioned-countries regulations.
Despite the sanctions, Crimea isn't empty of tourists.
While Western travel to Crimea is down sharply, Crimea has seen a huge spike in Russian visitors, up 178% up in the past year, according to consultancy ForwardKeys, which explains:
"This was largely thanks to the Russian government’s special vacation support given to public workers and their families for visits to Simferopol."
CORRECTION: 9:30ET In the original version, I mis-attributed the ownership of Hotels.com. Sorry.