The letter says, in part, “Small, independently owned, and economy hotels are particularly subject to the anticompetitive effects of this merger. In many markets, small businesses and independent hotels rely on online travel agencies (OTAs) to fill 30-40 percent of their rooms, with some as high as 60-70 percent. Yet, smaller businesses with fewer than 30 properties face the most serious consequences because they often times pay in excess of 25 percent more in online travel agency commissions. They must do business with these OTAs but will have virtually no leverage to resist any commission rate increase imposed by Expedia. These serious anticompetitive effects will substantially harm our country’s small businesses, vital to the economy of communities across the country. For these reasons, we urge you to block the proposed Expedia-Orbitz merger.”
“On behalf of the hotel industry, AH&LA believes this proposed transaction and the resulting consolidation of the online travel marketplace will result in significant negative consequences, particularly for consumers and for the large number of our members who are small business owners and franchised properties,” said AH&LA President and CEO Katherine Lugar. “We are encouraged by the multitude of lodging-related groups adding their voice and opposition to Expedia’s proposed acquisition of Orbitz.”
Katherine Lugar, president and CEO of the American Hotel & Lodging Association (AH&LA), applauded Congressman Hank Johnson’s support against Expedia’s proposed acquisition of Orbitz. Congressman Johnson (GA-04) submitted this letter to the Department of Justice today. The letter follows several others to the Department of Justice expressing serious concerns with the proposed deal including letters by Senators Mike Lee and Amy Klobuchar who are Chair and Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights; another by several dozen hotel associations, small and independent properties and additional lodging-related industry groups; and consumer advocacy group, Consumer Watchdog, who also submitted a letter.
“When this proposed acquisition was first announced, we expressed our concerns about this transaction running counter to the goal of creating more consumer choice,” said AH&LA president and CEO Katherine Lugar. “As Congressman Johnson points out in his letter to the Justice Department, ‘further consolidation in the online travel agency market will have three primary negative impacts: restricting choice and increasing costs for consumers... confusing consumers about affiliate websites of online travel agencies... and endangering innovation and competition by new entrants.’
“We are encouraged by the multitude of groups and members of Congress adding their voices and sharing their serious concerns about Expedia’s proposed acquisition of Orbitz. We continue to watch this development closely as the proposed transaction moves through the regulatory process.”