The hospitality industry in America is worried about Expedia’s plans to purchase rival OTA Orbit for US $1.3 billion, which it announced earlier this year.
The American Hotel & Lodging Association (AHLA) has released a statement saying that they believe the purchase would result in larger fees for hotels and higher prices for guests, as well as resulting in “severely reduced customer choice”.
“We believe 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 Katherine Lugar, CEO of AHLA.
One of the group’s main gripes is that the commissions hoteliers pay are, on average, 11% more than what Orbitz charges.
The group’s statement said that many smaller, independent hotels rely on these sites to attract travellers who otherwise would not have heard of their properties. If Orbitz falls prey to Expedia, these properties would be priced out of the OTA game.
If Expedia’s purchase of Orbitz is successful, Expedia and competitor Priceline Group will control 95 percent of the online travel agency bookings in the U.S., according to the statement, which raises questions about whether the sale would end up violating U.S. monopoly/anti-trust laws.
Orbitz Worldwide Inc., is based in Chicago and owns CheapTickets.com, Orbitz.com and HotelClub.com.
The proposed acquisition is still under review by the U.S. Department of Justice.
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