Taxes – an (un)welcome mat for visitors

Some fifteen years ago, the New York Times ran an editorial urging government officials to reduce hotel taxes which at that time gave the city the dubious distinction of numero uno for high hotel taxes. With a slowing economy jurisdictions around the country are quick to sock it to seemingly faceless visitors (supposedly from overseas) whose protests don’t reach officialdom. But the correlation between increased taxes and decreased visitation requires constant repetition.

A recent study sponsored by the National Business Travel Association (NBTA) reiterates what the industry knows all too well – that higher taxes are a strong disincentive for travel planners. The article states that “travel taxes are growing in the top 50 U.S. travel destinations, according to a new study of car rental, hotel and meal taxes. The result, it suggests: Meetings decision-makers are scaling back”. It goes on to note that “local and state officials around the country wondering how to attract more visitors should look at Florida and California, popular destinations for both business and leisure travelers, (and) that 15 of the top 16 cities imposing the lowest discriminatory travel taxes are in those two states. Cities that disproportionately target travelers for revenue are probably losing market share without even knowing it. Travelers who have been burned by taxes start looking for alternatives. That could mean trading down to less expensive hotels, car or meal options; staying with friends; taking shorter trips; or choosing an alternative destination. The lesson here? If you want travelers to come back to your city, you shouldn’t hit them with ‘travel tax sticker shock”.

Published by

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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