Travel Weekly - July 27, 2009

opinion•

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Shame on New York

New York City has given us so much that it
seems churlish to complain when it screws
up, but New York has screwed up, and we’re
going to complain.

New York’s error was to adopt an ordinance on hotel taxes that is unworkable, overbroad and badly drafted.

As passed by the City Council and signed by the mayor, an amendment to the city’s tax code now seems to require retail travel agencies, beginning Sept. 1, to pay the city’s lodging tax on any booking fee charged to clients for making a reservation at a New York hotel.

The stated purpose of the amendment was to clarify how the city expects online travel agencies and other intermediaries to remit taxes on merchant model or wholesale transactions in which the seller gets a wholesale rate and adds a markup.

That much is clear from a report submitted to the council by the city’s Finance Division last month, just before the measure came to a vote.

The report said, “Let’s assume an online travel company rents a hotel room from a hotel operator valued at $100 for $50. The same online travel company subsequently charges consumers $80 to rent the same room. The travel company will pay the tax on the wholesale rate of $50, the amount rented from the hotel operator, rather than the amount rented to the consumer. In this transaction, $30 remains untaxed.”

The report continues that the bill “seeks to correct this problem by making clear that occupancy tax is owed to the city for the full amount of charges that customers pay for occupancy when they book through online travel companies.”

As a statement of purpose, that’s clear enough, or ought to be.

Unfortunately, the actual language of the bill goes far beyond this simple scenario and specifically includes “booking and service fees,” such as might be imposed by a travel agency in a traditional retail setting.

It seems not to have occurred to the city that there might be a difference between a merchant adding a markup to a wholesale rate and a retailer’s service fee for making a booking at a published rate.

For a city that is supposed to understand something about commerce, and tourism, this is an unpardonable lapse.

And it doesn’t end there. The broad language of the law seems to snare wholesalers who offer packages to domestic and international visitors that include hotel accommodations and sightseeing, theater tickets and other features. Sorting out the markup on the hotel component of such packages is going to be a daunting task for the city’s auditors.

A further complication is the law’s new definition of hotel rent and the creation of a new category, “additional rent,” which includes the markup and/or service fee retained by the intermediary.

On top of all that, intermediaries are expected to register with the city and pay a tax on this “rent.”

New York may deserve some credit for deciding not to go to court, the way many jurisdictions have done, to recoup “back taxes” on hotel merchant sales.

Also to its credit, New York’s politicos have refrained from calling the OTAs “tax cheats,” as some other local government officials have done.

But the city has to take this measure back to the drawing board and think about how to achieve its goals in a less disruptive manner.

This won’t do. EDITORIAL

LETTERS

Who needs to boycott? Just stop
selling airlines that are anti-agent

get what I’ve been telling my clients for years: The airlines are not your friends.

Name and agency affiliation withheld at the writer’s request

While we understand Mark Pestronk’s opinion on a boycott of United [Legal Briefs: “United boycott might be legal, but it carries too many risks,” July 6], we respectfully disagree.

We have not booked a Delta reservation for a client since its anti-agent campaign commenced in earnest, with debit memos for things such as “speculative bookings” (all bookings are speculative until the clients confirm them with payment) and “duplicate bookings” that the carrier itself agreed were not duplicates when we challenged the memos.

We inform our clients that we do not book Delta, tell them why and, if they insist, we book it on Delta’s website and charge the clients a higher service fee.

Any agents who choose to could do the very same with United.

The United situation is very sad personally, because the very first airline representative I met, on my very first day in the travel business 39 years ago, was June Alberi-no, one of the best reps we ever had. She was extremely efficient and professional as well as personable. I wonder what she would think today of United and its new anti-agent policy after all her years of trying to persuade us to book United.

Remember, everyone, just because you didn’t get the letter from United this time doesn’t mean you are not going to get one in the future, whether it’s from United or someone else. We’d be willing to bet this is just a test case, because we all know the airlines would never be in cahoots with each other on anything, would they?

Today, someone else. Tomorrow, you.

Of course, I must remain anonymous, but I’ve been a travel agent in the same state in the Northeastern U.S. for 39 years and counting.

Don’t say you haven’t been warned. And don’t ever for-

When one memorable rep departs,
it’s time to appreciate reps’ worth

Whether it is an airline rep or a rep for a tour operator or a cruise line, the good ones make a huge differ- ence in our lives and to our success.

Our preferred vendors are the ones whose sales reps we see on a regular basis. They keep the names of their companies front and center in our minds, and we feel confident that we can go to them to help us resolve a problem.

I started to think about the importance of reps when we learned that Giselle Landau was leaving Travel Impressions. It is very hard to say goodbye to such a wonderful sales rep. For more than four years, Giselle was there to help resolve a problem or answer a question. I don’t think the word “no” is in her vocabulary. If she didn’t know the answer, she would very quickly find the person who did. Customer service was her first priority.

Giselle kept in close contact with her accounts through email, regular visits and phone calls to familiarize her accounts with new programs and promotions or with hotels and resorts she had recently visited.

Giselle loved, believed in and strongly promoted Travel Impressions, and she lent whatever support was necessary for our agency to successfully sell Travel Impressions products. Her enthusiasm for her company was contagious.