Wednesday, August 5, 2015

PAII - Advocating For You

Your PAII is actively advocating now for YOU and your business.
In case you didn't know, Expedia (which also owns, Hotels.Com, Travelocity, Hotwire.Com, and Trivago.Com) is trying to merge with Orbitz.Com (which also owns (CheapTickets.Com).   This could create a virtual monopoly (the only other major OTA Player would be Priceline - which owns Kayak.Com and Bookings.Com), and they could begin charging almost whatever commission they want. PAII believes that such a merger could be harmful to many B&Bs.   
YOUR PAII, in coordination with the American Hotel and Lodging Association (AH&LA), has sent letters to the Department of Justice and several Congressman, requesting they block such a merger.   
You can help stop this merger.  Write your Representative and/or Senator and DOJ and tell them to block the merger.  AND sign/send a letter to AH&LA for their campaign: .  You can use our letter as an example: 

August 5, 2015

The Honorable Loretta Lynch
U.S. Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, D.C. 20530

The Honorable William J. Baer
U.S. Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, D.C. 20530

Dear Attorney General Lynch and Assistant Attorney General Baer,
As a member of the Professional Association of Innkeepers International (PAII), which represents thousands of Bed and Breakfast/Inns (small businesses) serving millions of consumers around the country, I am writing to urge you to block Expedia’s proposed merger with Orbitz,

               Expedia and Orbitz are currently competing online travel agencies and are some of the resources B&Bs rely on to distribute room inventory to consumers.  Currently there are only three major online travel agencies– Expedia (which also owns Travelocity,, Hotwire and Trivago), Orbitz (which also owns CheapTickets), and Priceline (which also owns Kayak and  If this merger is allowed to go forward, then the competition between Expedia and Orbitz will be lost and 95% of all online travel agency bookings will be made through one of two companies, Expedia or Priceline. 

This could jeopardize many B&Bs who already have difficulty reaching consumers directly. By limiting the choice of booking agents, B&Bs could face higher commissions and higher costs.  For many B&Bs, already faced with the unfair and frequently illegal operation of short term rentals from Airbnb, that could mean they would have to close their doors.

The proposed merger would also adversely impact consumers who are blissfully unaware of the consolidation that already exists among these online travel agencies.  A recent survey reveals that 82 percent of consumers who book hotel rooms online do not know how many affiliate brands are owned by either Expedia or Orbitz. Upon learning about the proposed acquisition, many indicated that they feared higher prices, loss of competition and a diminished quality of service.   

This drastic consolidation will have serious and negative consequences for our businesses.   The Expedia/Priceline duopoly creates substantial market power to raise commission rates on hotels.   Industry statistics show that the average commission rate on Expedia is 11% higher than it is on Orbitz.  Should this acquisition be allowed to occur, B&Bs will, at a minimum, lose the benefits of those lower Orbitz commission rates.  Going from three to two competitors, and given the likely Expedia/Orbitz control of 75% of the market, would leave Expedia/Orbitz in a position to dictate commission rates and raise rates.

               B&Bs, small independently owned Inns and Boutique Hotels, and economy hotels are particularly subject to the anticompetitive effects of this merger.  In many markets, these small businesses and independent hotels rely on online travel agencies to fill 30-40 percent of their rooms, with some as high as 60-70 percent. Yet these smaller businesses 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, unlike large hotel chains, 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 which are vital to the economy of communities across the country.  We urge you to block the proposed Expedia-Orbitz merger.

               Thank you for your attention to this matter.


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