By James Wilkinson
Leading hotels and the Accommodation Association are concerned about the implications of Expedia’s acquisition of Wotif.
Speaking exclusively to HM, TFE Hotels Chief Executive Officer, Rachel Argaman, said the company would “wait and see the implications of the takeover, but it raises concerns about commission levels in Australia”.
“With Wotif out of the picture that would change the competitive landscape in Australia for online travel agencies and we are concerned about the implications,” she said.
“We will continue to invest heavily in our own websites and to continue to drive a net RevPAR strategy aimed at maximising returns for our customers and our investors,” Argaman said.
This morning, Expedia group has announced that it entered into an agreement to acquire Wotif.com Holdings Limited, an Australian-based online travel company, for total cash consideration of AUD$703 million.
“This acquisition will allow both companies to continue driving growth opportunities by leveraging the unique strengths each brings to the table,” said Expedia group President and Chief Executive Officer, Dara Khosrowshahi.
Accommodation Association of Australia CEO Richard Munro told HM the competitiveness would need to remain.
“With respect to the news that Expedia are seeking to purchase the largest Australian-based Online Travel Agency in Australia , we wish all parties well in their negotiations,” he said.
“The Accommodation Association of Australia expectations would be that the competitiveness of the online distribution agencies remain, ensuring that accommodation operators are able to access the best global distribution systems to customers.
“We would also expect that reasonable transaction cost for accommodation operators would be a focus for this new proposed entity and for that matter any online agency to ensure consumers are receiving the best outcomes on price,” he told HM.
Emporium Hotel Brisbane General Manager, Peter Savoff, said he would be watching the merger closely.
“It’s no accident that Wotif has become the most influential online accommodation booking site in this part of the world,” he told HM.
“Their management team have worked hard to form loyal relationships with literally thousands of operators and millions of users, and I’m sure Expedia have also calculated the integrity and powerful influence of such a brand in the market place,” he said.
Several other major hotels and chains declined to comment when contacted by HM, whilst others, like Argaman and Savoff, said it was a “wait and see” situation.
Small boutique hotels and motels that don’t have sales teams and rely on OTAs like Wotif and Expedia will be the most concerned about the merger, given the difference in commission rates between the two companies.
More to come.