Expedia plans Wotif takeover

Last updated 12:55 21/07/2014

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The Commerce Commission will run its ruler over Expedia's planned A$700 (NZ$755.7m) million acquisition of fellow accommodation booking service Wotif.

The competition watchdog said it had received an application for the takeover from United States-based Expedia and expected to decide within about two weeks whether to let it acquire the New Zealand assets of Australian-based Wotif.

Expedia is not believed to be as widely used in New Zealand as Wotif, but the proposed merger of the online booking intermediaries has raised hackles in some quarters because of fears it might lead to a rise in fees paid by hotels and motels.

Chris Parkin, owner of Wellington's Museum Hotel, said when the acquisition was first proposed last month that Expedia charged hotels a 15 per cent to 25 per cent commission on bookings placed through its website, versus Wotif's fee of about 12 per cent.

Online booking companies generally demand that accommodation providers do not advertise prices lower than those offered through their websites. However, Parkin said it was a "given" that travellers could get the best deal by calling accommodation providers and booking direct.

A Commerce Commission spokeswoman said it only had jurisdiction over the New Zealand elements of the proposed takeover, but both Expedia and Wotif had offices in New Zealand and contracted locally.

Expedia had separately sought approval from the Australian Competition and Consumer Commission to take over Wotif's Australian business, she said.

In the event that the Commerce Commission declined approval for the takeover, Wotif might need to find an alternative way to divest its New Zealand assets, she said.

"I expect it is something we will get quite a lot of submissions on."

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