Taxes could make discounted hotels more expensive

by Tom Johansmeyer on

If your next hotel stay is more expensive than you expected, blame the government. State and local governments, still reeling from the recession, are looking for any source of revenue they can grab. And, they’re next target seems to be online travel agencies.

Online booking sites, such as Expedia and Orbitz, negotiate a rate with hotels for available inventory, market it up a bit and pass it along to the travel-buying public. The business model is pretty straightforward. The problem comes down to which room rate should be used to calculate state and local occupancy taxes. At least 40 lawsuits have been filed over the issue, as local governments have rewritten ordinances to try to add a bit more to the coffers.

There’s a lot at stake, according to a USA Today report. Approximately $1 billion a year is perceived to be lost by state and local governments.

Yet, is it really lost? The online travel agencies are paying the hotels, and according to Andrew Weinstein, spokesman for the Interactive Travel Services Association:

“Occupancy taxes are based on the rate the hotel sets and receives,” he says, “not the profits, fees or commissions of its partners. … The facilitation fees are no more part of the hotel rate than the taxi that takes the guest from the airport or the tip they give the bellhop.”

How do you feel about this issue? Leave a comment to let us know if it’s what the hotel gets or what the occupant pays that should matter for tax purposes.

[photo by Howdy, I’m H. Michael Karshis via Flickr]

Recession’s been done for a year: start traveling!

by Tom Johansmeyer on

The recession’s over … haven’t you heard? So, why aren’t you traveling yet?

The National Bureau of Economic Research put the end of the recession at June 2009, though it obviously took the group a long time to come to this conclusion. So, if they average vacationer wasn’t able to figure it out as quickly as a group of econ nerds, forgiveness is easy. After all, most people (including me) measure recessions based on our own households – and much less from a macro perspective.

Now that the recession is officially more than a year in the past, it’s time to book those tickets!

[photo by herval via Flickr]

The top factors that influence blended travel opportunities

by Tom Johansmeyer on

Vacations are getting squeezed out, either because of personal financial pressures or a fear of looking like you aren’t crucial in your cubicle. We keep cutting out the time we need for ourselves and our families, which can make the strain of recession-era employment even worse. You don’t need any more pressure … so why are you creating it? You need to get out on the road, and not just for the company. Whether it’s with family, friends or your favorite mistress, you need some time to recharge. Play it right, and you can get your company to pick up at least a piece of it.

“Blended travel” – tacking personal trips on to business travel – is becoming increasingly common. I’ve done this for most of my professional career, turning road warrior time in Paris (among many other cities) into subsidized non-solo trips. I’ve popped third cities between business destinations, met friends and flown family out to hang with me. And if I could show that it saved the company a few bucks, it would wind up doing the same for me.

With your fun money being pinched, investing some time to research your options can help you turn business travel into a great vacation. Here are five factors to keep in mind:1. The nature of your travel: How you travel and what you’re doing on the road can have a profound effect on your blended travel experience. If you work late and get stuck in meetings all the time, bringing your family isn’t going to work (unless they want to enjoy the destination without you). If you go back to the same place every week, it could constrain how much time you have available (focus on the weekends, for example). Get a sense of the rhythm of your travel schedule, and use that to determine your blended travel options.

2. Company savings: By modifying your travel plans to accommodate your personal aims (including having your family join you), could you wind up saving the company a few dollars? This may not bring the cost of the personal side of your plan down to zero, but it could take the sting out a bit. Finding a way to save the company some money can work to your advantage. I used to look at the timing of flights relative to hotel rates to pull this off. Sometimes, all you need is a relatively tolerant boss.

3. Corporate discounts: Many larger companies have employee discount programs on everything from consumer electronics to mortgages … and travel. This could help you chip away at the cost of your (partial) family vacation. Also, see if there is a way you can use your company’s negotiated rates, too.

4. Where you are (and where you can go): Not every location is worth turning into our annual getaway. I can think of plenty of business trips that I’d never use for a blended travel experience. If your spot is particularly undesirable, think about what’s in striking distance. Maybe you could set something up to meet your family at a third location.

Hint: Again, it’s a cost game. If you can show that the cost of your jaunt is less expensive than a straight shot home, you can make the case for “subsidization.”

Almost two-thirds of vacations canceled

by Tom Johansmeyer on

Being a working stiff blows. It’s bad enough that two years of recession sorrows have forced us to “work smarter not harder” and “do more with less.” Now, we’re also turning our vacations into office time. A study commissioned by Westin Hotels & Resorts, based on 1,500 employed professionals, found that nearly two-thirds (64 percent) canceled their vacations this year. A third canceled their vacations for work-related reasons.

For those who pushed forward with their time off … well, why did they bother? Twenty-five percent of respondents say they check into work hourly while on vacation – by e-mail and phone.

Okay, so are you ready for the real shocker now? A whopping 58 percent of respondents say “they are more in need of a vacation than last year.” What good would it do, though, if they’re just going to spend the whole trip checking in at the cubicle farm? To make matters at least a shade grimmer, 67 percent “feel better on vacation” and 64 percent “sleep better when they’re not working.”

[photo by Evil Erin via Flickr]

Five signs that the hotel meeting business is recovering

by Tom Johansmeyer on

Business meetings are back in style. Group customer is on the rise for the hotel business, signaling that the corporate crowd Is getting back out on the road. Joining the party are other groups, such as associations, sports teams, religious groups, social organizations and the military, according to USA Today.

The U.S. Travel Association is predicting a 7 percent increase in meeting and convention spending this year, with a forecast of $90.7 billion. Last year, this measure fell 15 percent, as the effects of the financial crisis and subsequent recession led to cancelations.

To get the big bucks back in the door, hotels and convention bureaus have been rolling out favorable pricing and sweetheart deals, and it’s starting to work.

So, how do we know this sector’s coming back? Here are five hints:

1. The meeting planners say so: A June survey by Meeting Professionals International showed 61 percent of respondents saying “that they’re seeing more favorable business conditions, including attendance, budgets and number of meetings,” according to a USA Today report. Only 15 percent responded this way in August 2009.

2. Hotel groups say so: InterContinental Hotels Group has announced that its group and corporate revenue climbed 10 percent in the first half of 2010 relative to the same period in 2009. Denihan Hospitality Group’s eight New York City hotels are showing an increase in group revenue of 26 percent year-over-year.
3. Even Grand Rapids has good news: The JW Marriott in Grand Rapids, Michigan has sold more than 1,500 group room-nights so far this year, up 20 percent from last year.

4. So does Fort Lauderdale: In this Florida town, group revenue is up 30 percent at the Harbor Beach Marriott. Corporate deals are still down from last year, but other groups are more than making up the difference.

5. Hotels understand what’s going on: Even though the market is coming back, hotels realize that they still need to price aggressively. Notes George Aquino, general manager of the Grand Rapids JW Marriott Everyone’s felt the turmoil of 2009. We don’t want that to happen again.”

[photo by msprague via Flickr]