The American Hotel & Lodging Association is asking government regulators to reject Expedia's proposed acquisition of Orbitz, saying the deal would give the merged company control of 75 percent of online travel agency business.

Expedia announced in February that it would acquire its competitor Orbitz for approximately $1.6 billion. The acquisition is now being reviewed by the U.S. Department of Justice to see if it complies with antitrust law.

In a lengthy statement, AH&LA CEO Katherine Lugar spelled out the reasons why the hotel industry opposes the merger. Top among them: The deal would dramatically cut the competition in online bookings marketplace.

"[S]hould this acquisition go forward as proposed, it will result in a duopoly with over 95 percent of the online travel agency bookings in the United States being controlled by two competitors, Expedia and Priceline," she said.

Lugar also said hotels currently pay 11 percent more in commissions to Expedia than they do to Orbitz. If the acquisition were to go forward, it "could result in Orbitz raising its rates to that level, further driving up distribution costs for hotel operators." http://bit.ly/1M7M4w7

The airline industry also has some reservations about the deal. Airlines for America told the Wall Street Journal that "online booking consolidation could have implications for consumers and competition." The government review should evaluate those potential impacts, A4A added. http://on.wsj.com/1JO55Ue

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