A leading consumer group is joining the hotel industry in asking the Department of Justice to block the proposed merger of travel booking sites Expedia and Orbitz.
“The proposed deal would give the combined company monopolistic control of the online booking market, enabling it to impose higher fees on hotels, which would inevitably mean higher costs for consumers,” said John Simpson of the group, Consumer Watchdog, in a letter.
The group said that “economy travelers stand to suffer the most as these online travel agencies consolidate, since lower-priced lodging options would face the highest increase in commission costs, and consumers rely on online travel agencies to find smaller hotels and lower priced lodging options.”
The $1.3 billion merger was announced in February and is seen as bolstering Expedia in its fight against Priceline.
Expedia says it faces enough competition that the merger won’t reduce options for consumers substantially and called the travel market “more fiercely competitive than ever” in a statement.
“Booking options for consumers continue to expand with Google, TripAdvisor, Amazon, and others now facilitating bookings directly on their sites,” Expedia’s Sarah Gavin said in a statement. “Expedia’s acquisition of Orbitz will generate cost savings and other synergies that will enable Expedia to better serve consumers and travel suppliers.”
Hotels and their representatives in Washington loudly oppose the deal.
“This could jeopardize many of our small businesses, who already have difficulty reaching consumers directly,” said a coalition of hotel operators in a letter sent last week. “By limiting our choice of booking agents, we could face higher commissions and likelier higher costs. For some of us, that could mean we simply must close our doors.”
Last week, the American Hotel & Lodging Association announced its opposition to the deal, saying it thought it would lead to “significant negative consequences.”