A proposed combination of Expedia and Orbitz is being objected by the hotel industry. Some in the industry are saying that the Expedia-Orbitz deal would mean hotel owners would be faced with larger fees, and vacationers would face higher prices.
Expedia is proposing buying Orbitz in a deal that would be worth $1.3 billion. According to CBS, the U.S. Department of Justice is still reviewing Expedia’s proposed acquisition.
Katherine Lugar, The Chief Executive Officer of the American Hotel & Lodging Association, said that the Expedia/Orbitz transaction, as well as the resulting consolidation of the online travel marketplace would result in negative consequences. Lugar continued to say that the Expedia-Orbitz deal would negatively impact not only consumers, but also their many members who are small business owners.
According to NBC, The hotel group added that consumer choices would be severely reduced as a result of the Expedia-Orbitz deal. It also mentioned that on average, Expedia charges hotels 11 percent higher commissions than what Orbitz charges.
If the Expedia and Orbitz merger goes through, then Expedia and Priceline would control more than 90 percent of the online travel agency booking. A number of sites are owned by The Priceline Group Inc., and this includes Kayak and Booking.com. A number of sites are also operated by Expedia and Orbitz. Expedia owns Trivago, Hotels.com, and Hotwire.com, while Orbitz owns HotelClub.com and CheapTickets.com.
According to The Wall Street Journal, a spokeswoman for Expedia said that if the deal with Orbitz receives approval, then Expedia has no plans to raise hotel commissions. The spokeswoman added that asides from Expedia and other online travel agents, consumers have other booking options to choose from. She said they can turn to traditional travel agents, as well as hotel websites and wholesalers.
Expedia’s proposed acquisition of Orbitz comes just as New York Senator Charles Schumer spoke out about practices some airlines have been doing. As Inquisitr previously reported, Schumer spoke out against the practice of flight data and price being withheld by some airlines from third-party travel websites, such as Expedia. A few weeks ago, Schumer said that the feds should look into this, and when airlines take part in this practice, then consumers are blocked from being able to find the best prices.
As of now, there is no word on if or when the Expedia-Orbitz deal will be approved, nor is there any word if the feds will look into the practice Schumer discussed.
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