Hotel group says Expedia-Orbitz deal would hurt travellers

Expedia analytics team workers Mike Brown, left, Saurin Pandya and Prashanti Tata chat in an alcove set up for employees, in Bellevue, Wash., Tuesday, Jan. 15, 2013. (AP / Elaine Thompson, File)

NEW YORK -- The hotel industry is objecting to the acquisition of Orbitz by one-time rival Expedia, saying that it would lead to higher prices for vacationers and larger fees for hotel owners.

"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," Katherine Lugar, CEO of the American Hotel & Lodging Association, said in a printed statement.

Expedia early this year said it would buy Orbitz for $1.3 billion. It had hoped to complete the acquisition in the second half of this year, but the proposed buyout is still under review by the Justice Department.

The hotel trade group said Thursday that the deal would "severely reduce consumer choice." It also noted that Expedia charges hotels, on average, 11 per cent higher commissions than Orbitz.

Many smaller, independent hotels rely on these sites to attract travellers who otherwise would not have heard of their properties.

If the buyout goes through Expedia and competitor The Priceline Group Inc. will control 95 per cent of the online travel agency bookings in the U.S., according to the hotel trade group. Priceline owns sites such as Booking.com and Kayak.

Expedia declined to comment on the pushback from the hotel industry Thursday.

Expedia and Orbitz own several websites that allow travellers to book airline tickets, hotel rooms or car rentals. Orbitz Worldwide Inc., based in Chicago, owns HotelClub.com, Orbitz.com and CheapTickets.com. Expedia Inc., based in Bellevue, Washington, owns Expedia.com, Hotels.com, Check Tickets, Trivago and Hotwire.com.