Further opposition to Expedia-Orbitz merger

The global hotel owners’ alliance, HOFTEL, has condemned plans to create an effective duopoly among online travel agents (OTAs) in the United States.

Expressing its concern about the proposed merger of OTA giants Expedia and Orbitz, the group noted in a letter to the US Department of Justice:

“Most hotel ownership is in the hands of private families and small/medium-sized enterprises…. They are vulnerable not only to cyclical economic swings but also to relatively small increases in top line costs…. While traditional travel agents levied commissions, which were, as we understand it, generally around 10%, the OTAs are normally in the range of 15-25% – even before the creation of the duopoly proposed by the Expedia/Orbitz merger.

“HOFTEL is asking the Department of Justice to prevent the merger which would, we are told, give the combined Orbitz/Expedia company a 75% share of US online travel agency business and, together with Priceline, a duopoly share of 95%.”

HOFTEL Chairman Simon Allison, stressed, “Most of the capital invested in the sector is provided by owners not by the brands or the OTAs, yet the voice of owners is all too often ignored. That holds back the job-creation impetus that they stimulate, both in the building and the running of hotels around the world.”