Hoteliers fighting Expedia's planned takeover of Orbitz

2 min reading time

Published on 10/08/15 - Updated on 17/03/22

Kathrine Lugar, Présidente de l'AH&LA

Agreed upon in February, approved by a majority of shareholders in May 2015, the takeover of the group Orbitz by Expedia is being reviewed by US competition authorities. The AH&LA hotel union is fighting to prevent it from being approved.

The American Hotel & Lodging Association (AH&LA), a leading professional association representing all forms of commercial accommodation in the United States, is trying to oppose the acquisition of Orbitz by Expedia that would, in their view, result in the absence of competition among OTAs on American soil.

Orbitz was the subject of a friendly $1.3 billion takeover bid by the Expedia group which should take control all of its brands: Orbitz, eBookers, Cheapdeals, Ratestogo... Before the deal, Orbitz stood at 4th position in the US market after Expedia, Priceline and Travelocity. The latter has already fallen into the hands of Expedia and only the parent company of Booking.com, Priceline, would have the means to modestly compete with Expedia (Priceline has around 20% of the US traffic on OTAs websites) to negotiate online marketing contracts with hoteliers.

A "Yalta" of online booking is now almost in place on the planet with a very wide domination of Booking over Europe that leaves the field open to Expedia and its subsidiaries in the Americas. In Asia, the Chinese Ctrip leads the pack.

It is against the strengthening of this trend that Kathrine Lugar, President of the AH&LA, has called on the US Department of Commerce to block the merger of othe Orbitz and Expedia groups. All distribution channels controlled by Expedia would correspond to nearly 75% of the volume of hotel bookings on American soil.

Kathrine Lugar denounces the lack of effective competition that would automatically lead to a revision of the commission rate up to the detriment of hoteliers and final customers. Currently, Orbitz practices commission rates that she says stand about 10% lower than Expedia's.

The Federal Bureau of Commerce is yet to decide, hence the current pressure from hoteliers' lobbies.
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