Australia Clears Way for Expedia Acquisition of Wotif, Cites Ample Competition

Citing ample competition from Booking.com, TripAdvisor and Google Hotel Finder, the Australian Competition and Consumer Commission ruled that it won’t oppose Expedia Inc.’s $658 million acquisition of Wotif.com Holdings Ltd. despite initial concerns that the regulatory body expressed a month ago.

Hotels had argued that putting online travel agency Wotif into Expedia’s hands would lead to their paying higher commissions and hotel rates would rise.

However, for exactly the reasons the commission ended up citing — plenty of competition in the market — astute observers had confidence that the deal would go through.

Clearing the way for the acquisition, ACCC chairman Rod Sims said: “However, the ACCC found that there has been considerable change in the competitive dynamics of the online accommodation distribution market in recent years. This has included new entry by a number of competitors and business models, including Booking.com, which has grown quickly to become the largest OTA in Australia.”

The ACCC stated that TripAdvisor is consistently among the top two travel sites in Australia by consumer traffic, and that Google Hotel Finder, too, gives hotels a new avenue to market themselves and compete.

“Metasearch websites increasingly facilitate hotels’ ability to promote themselves alongside OTAs, and transact directly with consumers,” Sims said.

The still-pending acquisition of the Wotif Group, which includes Wotif.com, lastminute.com.au, travel.com.au, review site Asia Web Direct, and LateStays.com, among other brands, gives Expedia Inc. a better foothold to compete against Booking.com, Agoda and others in Asia Pacific despite the fact that the Wotif Group has been struggling in recent years.

Expedia has been on an M&A binge, and it has been raising money for further pursuits.

In July, Expedia Inc. announced its intent to acquire the Wotif Group, and that came a couple of weeks after revealing that it plans on acquiring European car rental company Auto Escape Group for an undisclosed sum.