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Team HuskerBoard
Irregular News for 06.09.06
Savannah, GA -- Tourism is big business for the Coastal Empire. But cities like Savannah are losing hundreds of thousands of dollars because of travel websites. Now many Georgia counties and cities are filing a lawsuit, trying to get some of that lost tax revenue back.
Travel websites buy up hotel rooms at discounted rates, then turn around and sell them at a higher rate. You still pay the same tax, but the website only pays cities and counties the taxes based on the discounted rates, and that adds up to a lot of lost tax dollars.
Tourism in Savannah is booming. The city expects visitors to bring in more than $9 million this year. Those visitors will fill the more than 12,000 hotel rooms in Savannah and Chatham County. Just how many of them will find their lodgings on travel websites? One hotel says a lot.
"I would say almost 70 percent of our business comes through these internet travel sites," said Scott Edwards, the sales and marketing director for the Hyatt Regency Savannah.
He says it's easy to see why. "It's easy for the consumer, that's the trend and that's how these people travel."
But cities and counties say they aren't getting their fair share of tax revenue from these travel websites.
Let's say you make your reservation directly with the hotel for a hundred dollars. You'll pay a 6 percent hotel/motel tax of $6. The hotel gets the $100 and pays the city $6. If you book your reservation through a travel website, you'll still pay a hundred dollars and a 6 percent hotel/motel tax. But since the website bought the room at a discounted rate, say $60, it only pays the city 6 percent of that, or $3.60.
Multiply that by the growing number of visitors booking online, and Savannah city officials say it's a tremendous loss every year.
"We're fairly confident it's in the hundreds of thousands of dollars," said Savannah assistant city manager Chris Morrill.
He says the city is still deciding whether to join many other municipalities in a class-action lawsuit against the travel website companies or file their own. "The real key is how do we clear this issue up so we can collect future revenues," he said.
Just how much of a difference can that lost revenue make? Just $50,000 to $60,000 can pay for the maintenance on Johnson Square and upkeep on the Nathaniel Green monument.
"Our River Street structure, to maintain the cobblestones and the historic walls, is extremely expensive," said Morrill. "So the more hotel/motel tax is collected and is owed to us that we can actually put toward that, the less you have to get into property tax revenues and other revenues."
Morrill says the main thing he wants people to understand is this is not a new tax. It's an existing tax that people have already paid to these booking companies. They just want to make sure it gets back to the municipalities.
Chatham County and Tybee Island officials are also looking into joining the lawsuit.
source
Savannah, GA -- Tourism is big business for the Coastal Empire. But cities like Savannah are losing hundreds of thousands of dollars because of travel websites. Now many Georgia counties and cities are filing a lawsuit, trying to get some of that lost tax revenue back.
Travel websites buy up hotel rooms at discounted rates, then turn around and sell them at a higher rate. You still pay the same tax, but the website only pays cities and counties the taxes based on the discounted rates, and that adds up to a lot of lost tax dollars.
Tourism in Savannah is booming. The city expects visitors to bring in more than $9 million this year. Those visitors will fill the more than 12,000 hotel rooms in Savannah and Chatham County. Just how many of them will find their lodgings on travel websites? One hotel says a lot.
"I would say almost 70 percent of our business comes through these internet travel sites," said Scott Edwards, the sales and marketing director for the Hyatt Regency Savannah.
He says it's easy to see why. "It's easy for the consumer, that's the trend and that's how these people travel."
But cities and counties say they aren't getting their fair share of tax revenue from these travel websites.
Let's say you make your reservation directly with the hotel for a hundred dollars. You'll pay a 6 percent hotel/motel tax of $6. The hotel gets the $100 and pays the city $6. If you book your reservation through a travel website, you'll still pay a hundred dollars and a 6 percent hotel/motel tax. But since the website bought the room at a discounted rate, say $60, it only pays the city 6 percent of that, or $3.60.
Multiply that by the growing number of visitors booking online, and Savannah city officials say it's a tremendous loss every year.
"We're fairly confident it's in the hundreds of thousands of dollars," said Savannah assistant city manager Chris Morrill.
He says the city is still deciding whether to join many other municipalities in a class-action lawsuit against the travel website companies or file their own. "The real key is how do we clear this issue up so we can collect future revenues," he said.
Just how much of a difference can that lost revenue make? Just $50,000 to $60,000 can pay for the maintenance on Johnson Square and upkeep on the Nathaniel Green monument.
"Our River Street structure, to maintain the cobblestones and the historic walls, is extremely expensive," said Morrill. "So the more hotel/motel tax is collected and is owed to us that we can actually put toward that, the less you have to get into property tax revenues and other revenues."
Morrill says the main thing he wants people to understand is this is not a new tax. It's an existing tax that people have already paid to these booking companies. They just want to make sure it gets back to the municipalities.
Chatham County and Tybee Island officials are also looking into joining the lawsuit.
source