Putting the tax rebate to work

The hospitality industry has almost always been treated as an orphan by the Federal government whether it comes to subsidies as was the case with the airline industry post 9/11, visas or merely supporting the tourism industry as when the USTTA, an agency that promoted tour and travel to the US was disbanded by President Clinton.

But the rebate checks probably represent an opportunity for the industry to help itself to some of Uncle Sam’s largesse if the initiative of the retail industry can be emulated. The Financial Times reports that “US retailers are waging a promotional battle to win a share of the billions of dollars in tax rebates destined for US households as part of the $170bn (£86bn) federal economic stimulus package. Kroger and Supervalu, the two largest traditional supermarket chains, will give customers who convert their tax cheques into gift cards an extra 10 per cent of the sum transferred, offering, for instance, a $330 gift card for each $300 in rebate or refund money”. Others giants like Sears, Wal-Mart and Radio Shack are also rolling out similar promotions. Adversity is the mother of inventions and the retail industry is already seeing the effects of the economic slowdown which is yet to touch, much less smote, the hospitality industry particularly in major metropolitan areas. Hotel chains can, nevertheless, seek to capitalize on the rebate checks just as effectively with similar offerings either through affinity cards or directly at check-out. With an estimated $105 billion flowing from the President Bush’s spending initiative and the expectation that 40% of that likely to be spent by tax payers in the near term, it may well serve to mitigate the effects of the economic slowdown.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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