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OTAs Taking Their Tax Case to the Streets
Tags: no tags     Categories: Opinion
Maybe it's just that many of us don't really think we're all that and a bag of chips. That's not saying we don’t know people who do think that they are. I just don’t think that’s most of us.

Like that commercial pilot I met (a few months back) who marveled at the prowess of Olympians but, when I told him that most of us thought what he did was pretty special, shook the compliment off with a “it’s not really that hard.”

I guess I think that the proven link between tourism promotion and community development is an equation even a fifth grader could understand. It’s really not that hard to connect the dots. But, I guess it is for people that don’t choose to connect more than two dots at a time.

Which is why what the Online Travel Agencies (OTAs) are doing in their ongoing fight to avoid paying Room Tax is so perfectly constructed.

For those that have not been following this fascinating saga, OTAs (like Orbitz) have been acquiring hotel rooms at firesale rates for years, and then selling them for more to consumers looking for a deal. What a deal for everybody, right? Except that the OTAs only pay the Room Tax on the wholesale price...not the final price. And, this is costing governments millions of dollars in forfeited tax revenues. Revenues that they need to balance their budgets and invest in their Destination Marketing Organizations (DMOs).

Naturally, the OTAs don’t want to pay these additional taxes and have been in countless court battles to try to avoid paying the difference. They’ve won some. They’ve lost some. Jury is still out. But, not for long. Indeed, Missouri just passed a law that says OTAs are only liable for the price "they" pay for the rooms they buy.

Rather than relying on the courts to settle the issue, the OTAs are taking their case to the people. And, since most people aren’t sophisticated enough to string five dots together (the minimum to explain the importance of what DMOs do), the court of public opinion will find in favor of the OTAs...because they’ve got a better story.

And that story is that the OTAs are saving Joe and Jill Consumer lots of money that greedy governments want to extract from them.

A grassroots campaign has just been launched by the Interactive Travel Services Association to encourage online travelers to express their opinions on tourism taxes...and we all know how that will turn out.

I can only imagine the giggle that ITSA Executive Director Art Sackler must have attempted to supress as he said "America’s travelers will no longer silently watch as tourism taxes rise."

The tactic is clear. Demonize government...which, today, is fairly easy to do. While most DMOs can’t be pleased about this new development, you gotta hand it to the OTAs.

Smart. Very smart.

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