Karryon_Viking_Takeover_Left_150x750
Karryon_Viking_Takeover_Right_150x750

The cornering of markets

Could Expedia’s acquisition of wotif.com impact on Australia’s accommodation market?

Could Expedia’s acquisition of wotif.com impact on Australia’s accommodation market?

The Australian Competition and Consumer Commission (ACCC) has released a Statement of Issues regarding the proposed acquisition of Wotif.com Holdings Ltd by Expedia, Inc.

“The ACCC is seeking further information to determine whether the proposed acquisition is likely to substantially lessen competition in the market for the online distribution of Australian accommodation,”

Rod Sims, ACCC Chairman

The proposed acquisition involves two of the three largest online travel agents in Australia, with the other being The Priceline Group (Booking.com and Agoda).

ACCC-wotif-karryon

Wotif.com – a major brand on Wotif Group’s burgeoning Portfolio.

The ACCC is exploring whether the removal of Wotif from the Australian market has the potential to increase the rate of commissions charged to hotels and other accommodation providers in Australia.

According to the competition regulator, commission rates charged in Australia by Expedia and Booking.com are lower than the rates charged by those companies in other parts of the world.

“The presence of Wotif may be a contributing factor to this difference,” Sims said.

“Market participants have expressed concern that the removal of Wotif as an independent competitor will allow Expedia to increase its commission rate.”

However, the ACCC believe that the proposed acquisition is unlikely to raise competition concerns in relation to the market for the online distribution of air travel and the markets for distribution of other travel products, including holiday packages, car hire and cruises.

The ACCC will be collating further submissions from the market in response to the acquisition until the 19th of September.

The final decision will be announced on the 2nd of October.

ACCC-wotif-karryon

Do you believe the acquisition will have a detrimental effect on the accommodation market?