Hotels Fight to Block $1B Expedia-Orbitz Monster Merger
The hotel industry is taking complaints to the Justice Department to halt a proposed $1.3B Expedia-Orbitz merger, a move that could give online booking sites control of a whopping 75% of the market. Although online travel agents make up just 17% of all US hotel bookings—a hair short of hotel sites' 19%—the two sites would hold enough leverage to abuse hotels on booking commissions, said president of New Castle Hotels & Resorts Gerry Chase, who owns 22 hotels in North America. The proposed union comes on the heels of Expedia's $280M Travelocity acquisition, another transaction that led to scrutiny for possible market control. But Expedia's CEO Dara Khorowshahi believes the site is only a "small player" in the "grand scheme of things." Airlines have expressed similar concerns, believing it will affect their own state of competition. Expedia's recent loss over Google's own merger with airline comparing software company ITA Software may provide reason for the Justice Department to approve the merger. [WSJ]
