Online travel company lawsuits heat up, cool off

by Chris Owen on

Going back more than 10 years, U.S. city and state governments have been suing online travel sites for underpaying general excise and hotel taxes. Now, lawsuits filed years ago are being heard and the story continues as mixed verdicts come in.

First, here’s the beef. Online travel companies purchase unused hotel room inventory and then sell those rooms to consumers at a marked-up price. The online travel company pays the hotel occupancy tax on the discounted rate that it purchased from hotels and not on the rate charged to its consumers.

Cities from Honolulu to Houston to Washington D.C say “that’s not right” and want the taxes actually charged to be paid.

Online travel companies like Expedia, Orbitz, Travelocity, Hotwire.com, Hotels.com, Priceline and others say “forget it, we’re not paying.”

Some lose, some win as the issue plays itself out.

In January, Houston, Texas lost it’s battle when a a Texas trial court judge dismissed the allegations. “These claims are not based on law, but on the greed of plaintiffs’ attorneys,” Andrew Weinstein, spokesperson for the Interactive Travel Services Association told the Southeast Texas Record.

It’s a sketchy claim at best and both sides have their share of supporters and valid points.

“If the city’s right, all that means is there’s been an under-collection of taxes, and the city can’t sue us for that,” said Frank Lowrey, an attorney representing the firms to Business Week. “They’re telling us to collect more taxes than we said we would collect.”

Similar lawsuits or complaints have been filed around the country by cities and states including in Oklahoma, Maryland, Texas, New York, Illinois, Pennsylvania and in the California cities of San Diego and San Francisco. While some of the complaints have been dismissed, several are still pending.

Is this just cities and states grasping at any possible income source, however bizzare it may sound? Maybe, but that’s nothing new either. Just last year Gadling reported on how the state of Tennessee wanted to tax complementary hotel breakfasts and before that we reported how taxes are becoming a larger part of travel expenses all the time as cities and states are pumping up their coffers at the expense of visitors.

Those who lay claim to jobs as lawmakers may not have the oldest profession in the world but sometimes they sure act like it.

Flickr photo by Love My Tours

Related Stories



Hotels.com Black Friday and Cyber Monday hotel deals

by Melanie Nayer on

Still thinking about ways to get away this holiday season? One of the best things about the Thanksgiving holiday is what comes after – Black Friday and Cyber Monday. To help buyers celebrate, Hotels.com will launch one of their biggest sales of the year during the busiest shopping weekend of the year.

In addition to 50 percent off nightly room rates, the first 500 hotels.com customers who book the Hotels.com® 4-Day Sale and use code “4DAY” will receive a Flip™ Ultra camcorder.

The Hotels.com 4-Day Sale goes live at midnight on November 26 and ends at 11:59 p.m. CST on November 29. Some Black Friday and Cyber Monday hotel deals include:

The Hard Rock Hotel Chicago: The hotel is located in the center of Chicago Loop and close to the shopping district on Michigan Avenue. This four-star property has rates as low as $134 a night and is just one block from the Chicago Theatre and Grant Park.

Hotel Erwin, Venice, California:

Some of the best one-of-a-kind shops and restaurants can be found in Venice, California. With rates starting at $239 a night, the property is within two miles of fantastic shopping in Santa Monica and Marina del Rey. The hotel’s open-air rooftop lounge, High, provides panoramic views of the beach and Los Angeles

Le Meridian, Dallas:

The four-star Le Meridian in Dallas has weekend room rates starting at just $79 a night. Conveniently located across from Galleria Dallas, where signature stores, dining venues and an ice-skating rink are sure to bide your time, the Le Meridian is a perfect spot to stay while you shop for cowboy boots, bling and 10-gallon hats for the entire family.

Hotels.com offers three and four-star hotels for $99 or less

by Melanie Nayer on

Hotels.com® just launched their $99 or Less promotion, which offers many travelers an awesome break on three and four-star hotel prices.

Featuring nearly 2,000 hotels in the U.S., Canada, Latin America, and the Caribbean, travelers who book by November 1 and travel by November 15 can enjoy deluxe accommodations on a limited budget.

Need some enticing? No problem…

How about the Palms Resort in Negril, Jamaica. The three-and-a-half-star property is situated near a beach and offers guests ocean or garden view rooms. Rooms start at $85 a night.

Head to the San Juan Water and Beach Club Hotel in Carolina, Puerto Rico for just $95 a night. Recommended by 79% of past guests, this three-and-a-half-star property is pet friendly, has an outdoor pool, a spa, and is within walking distance to the San Juan beach.

If Sin City is more your style, rooms at four-star properties like Treasure Island Hotel and Casino start at $60 a night.

At the Hotel Allandale, in Austin, Texas, not only will you relax in comfort and style but you’ll only pay $85 a night for this three-star Southern hospitality.

Hotel prices hit bottom, survey finds

by McLean Robbins on


The average hotel room rate has begun to increase for the first time since 2007, shows the latest issue of Hotels.com’s biannual Hotel Price Index (HPI™). But the news isn’t all bad. Despite the 2% increase, hotel room rates are still markedly lower than rates at the peak of the market. As the 2009 HPI predicted, 2010 continues to be another great year for great travel values.

Las Vegas topped the list of top five most popular domestic destinations for the second time this year, with New York, Orlando, Chicago and San Francisco following close behind. Popular cities for international travelers include New York, Las Vegas, San Francisco, Orlando and Los Angeles.

“We’re seeing travel bookings pick up around the world,” said Victor Owens, Hotels.com’s vice president of marketing, North America. “There are, of course, still deals to be had, especially in international destinations like Abu Dhabi, Dubai and Reykjavik which each saw a major drop in hotel prices during the first half of 2010.”

In some cities, however, luxury hotels became a more attractive proposition, with average prices for top-end rooms dropping by over a tenth. Domestically, a 5-star hotel dropped 13 percent in Orlando ($259-$225) and San Francisco ($323-$280). Chicago’s rates have stayed steady with an average room rate of $137, making it ideal for business travelers and one of the best locations for meeting planners to book their next event.

The Big Apple was the most expensive domestic city of those tracked in the global list; but, U.S. and overseas travelers continued to flock to NYC. Prices averaged $224 per room per night during Q2 2010 – an increase of 14 percent compared to 2009. A Gradual return of business travel and an increase in domestic travel fuelled this rise.

The biggest loser is Abu Dhabi, which fell by 46 percent between Q2 2009 and Q2 2010. This means a hotel room that would have cost a U.S. traveler $304 during the first six months of 2009 cost a traveler just $163 this year – a drop of $141. This was fuelled by various factors, including a growth in the number of rooms, as new hotels opened, and a drop in the number of corporate travelers visiting the Emirate, due to the economic situation. This influential city of commerce was affected by the fall of international business travel, as was its larger neighbor, Dubai, which saw a 10% decrease in hotel room prices.

Cost rose most sharply in the second quarter of 2010 for locations that hosted major events or were the scene of major motion pictures. rices rose 60% in Cannes, France, 57% in Eat, Pray, Love location Bali and 53% in World Cup home base Cape Town, South Africa.

For detailed information on your home city or next travel destination, view the report online.

[Image courtesy of Hotels.com]

Expedia launches new search tool for disabled travelers

by Melanie Nayer on

A new search tool from Expedia and Hotels.com makes it easier for consumers to find hotels that offer accommodations for disabled travelers. The search function will allow travelers to filter results to only show those hotels with accessibility equipment for the deaf, handicap-accessible bathrooms, Braille or raised signage, a roll-in shower and more. Once a hotel is located, a customer can request one or more of the specific accessibility features on Expedia.com’s online Reservation Page.

I did a quick search for hotels in Miami with accessibility features on Hotels.com and Expedia.com. The results were plentiful, and included properties that range in price and star-rating. The Fontainebleau Miami Beach, for example, offers rooms equipped with accessibility equipment for the deaf, raised signage, handicapped parking, and rooms with roll-in showers. The Marriott Miami Biscayne Beach offers similar options, as do the 62 other hotels that came up after I filtered my search. However, all these hotels note that amenities may be available only in some rooms and some amenities may incur additional fees, so it’s best to double check with your Expedia or Hotels.com customer service rep about any additional fees before booking.

To ensure the hotel is absolutely accessible for the needs of the traveler, Expedia.com and Hotels.com customer service team will review the traveler’s request for the hotel booking and contact the hotel to verify the specific needs of the traveler are met. Expedia or Hotels.com will follow up with call to the consumer to confirm the reservation or aid in booking another hotel.

According to HotelMarketing.com, Expedia.com offers more than 15,000 hotels that publish accessibility options.