Hotel trade group slams Expedia-Orbitz deal
The American Hotel & Lodging Association (AH&LA) has registered its opposition to the pending acquisition of Orbitz Worldwide by Expedia.
The trade group said the deal is bad for consumers as it will further restrict competition and will also mean higher commissions paid by hoteliers.
"This transaction and the resulting consolidation of the online travel marketplace will result in significant negative consequences, particularly for consumers, but also for the large number of our members who are small business owners and franchised properties," said AH&LA CEO Katherine Lugar.
According to the AH&LA, Expedia charges about 11% more commission than Orbitz, and should the deal get regulatory approval, Orbitz’s commission rates would likely be hiked to fall in line with Expedia’s.
Small independent hoteliers which rely on the big OTA’s marketing reach would suffer the most, AH&LA says.
"We believe the combination of Expedia and Orbitz will cause small and independent hotels to pay significantly more to advertise online in the increasingly pay-to-play ecosystem of online search. Taken together, these effects could substantially drive up the cost of doing business."
With the Orbitz acquisition, Expedia and rival Priceline would account for 95% of the US online travel agency market for hotel bookings, according to PhoCusWright research.
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