Travel Sites May Raise Hotel Taxes
February 17, 2009 by Gennaro
Filed under Travel News
State and local governments, across the United States, are challenging online travel websites who book hotels at discount prices. Representatives, for the governments, are claiming that booking sites such as Orbitz, Expedia, and Priceline are able to offer lower rates by collecting taxes on the cost incurred by the travel site instead of the rate paid by the consumer. Read more at the NY Times.
Capsule Hotel, Japan © Robert Paul Young
Online booking sites provide a quick and relatively inexpensive method of securing hotels and airfare. The recent dispute will likely result in an increase in overall room cost for consumers. With travelers already taking a hit, because of the economic downturn, the timing of the news is hardly ideal. That being said, taxpayers will benefit from the additional funds allocated to their local governments.
Should travel sites be required to increase taxes that are collected on hotel rooms?
Looking to make up the cash lost on the hotel tax? Read about free hotel activities in Las Vegas. Prefer to rant about consumer rights? Check out Darren Cronian’s Travel Rants. Darren is always looking out for travel consumers. He helps to keep the tourist industry on its toes.
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Thought this was coming. It has been happening with other sites the last two years. I noticed it recently with Amazon.com. It was probably a bigger hit to them as the travel sites already collect most of the taxes. Amazon and other sites were often not charging at all. Hurt the consumer, for sure.
That was a creative way of getting around reporting a full tax. It’s true that the traveler will take the hit from this. Though with hotels sales dropping, it might be smart of the companies to to eat the tax for the time being. I do wonder what took so long for this to be caught. These sites have been running for years and years.
I’m guessing this will result in a few dollars more per night. I also wonder why now. I guess the local governments are really struggling because of the current economy. Don’t think this will stop people from buying online though. Much easier.
@Tyler
Interesting connection with the Amazon tax. True, I experienced it too.
@Kimmy
The U.S. government has been slow to adjust to the businesses on the Internet. This was coming. Perhaps, they were looking for the growth to happen first or to catch up with the technology of tracking.
@Seth
I agree that online buying will continue. If anything, it’s on the rise.
That’s an interesting photo. I’d be too claustrophobic to stay in a capsule. Not looking forward to an increase in prices.
@Tim
I couldn’t stay in that capsule hotel either.
Another day. Another tax.
@Tim
That is some tight quarters, huh.
@LN
I didn’t think the increase would go over to well if it happens
I’m already not sure about traveling in 2009. This doesn’t help.
@Ashley
It’s going to be a tough year for the industry. Hope you’ll find a way to travel anyway.
I’ve been predicting that the hotel industry will be the next industry to collapse in this recession. This is due to their inability to lower their profit margin. I just got back from a trip to Atlanta, and the hotel I stayed at had $5.00 bottles of Evian water in the rooms. Now, for those of you who aren’t familiar with the value of the dollar, the same bottle of water would be like $1.50 at most convenience stores, which already have a high markup!
The hotel industry probably doesn’t need this right now. I agree with the poster who said that the sites should just eat the tax. It would be a great marketing trick to claim in your commercial to say that “We pay the taxes so that you won’t have to!”
@Trey
That would be an interesting marketing approach. I also think it’s true that re-addressing certain policies would be smart including the $5 bottle of Evian. They must think their consumers are Evian backwards naive.
It won’t impact my travels, but I’d rather not pay it. Agree with Trey about the hotel’s other cost being ridiculous.
I feel that while you may not get as many overseas visitors because of the credit crunch, there maybe a surge of people deciding to hit more local holiday spots.
As for the Government and the tax collecting, the problem has always been that they do not use the money collected wisely.
@Lisa
If you love traveling, you have to deal with it. I will too.
@Sire
Didn’t think of that aspect. A lot of people who were going to holiday close to home to save a bit this year will be hit by this tax. Agree with the government-tax issue. Where it goes is the key. Though I doubt there will be much agreement on that by the populous.
I find it amazing how the Government always finds new ways of taxing their constituents. I’m sure that if they could tax the air we breathe they would. Which reminds me of how a local council was thinking of introducing a levy charged against those who chose to kite surf, which is sort of like an air tax.
@Sire
Air tax, ha! Hopefully the funds are put to good use. And hopefully the travel websites eat the added tax.