Priceline.com, the national online travel agency, has been inconsistent in remitting hotel room tax back to the municipalities and agencies who depend on the revenue to keep the lights on.
In an email to the West Virginia Hospitality and Travel Association and other state tourism partners, president and CEO of Visit Mountaineer Country Susan Riddle said several area hoteliers have told her Priceline isn’t collecting any taxes on any reservations they sell locally.
“I know hotels are hurting for business and I don’t think if they let some non-tax sales slide that anyone will be paying attention for quite some time,” Riddle said. “This is just another example of why the occupancy tax statewide system needs to be improved. None of us should be spending time on enforcement and collection of a state tax law.”
For every $100 spent on a hotel room in Monongalia County, for example, $6 is collected. The money comes from the customer, not the hotel. The money is then sent to the local taxing authority, such as the city of Morgantown, and is then remitted to agencies such as Visit Mountaineer Country, which receives 3% of the room tax.
In most cases, online travel sites like Expedia, for example, will add the room tax to the customer’s statement. Priceline does it differently, explained a local hotel executive who asked not to be identified. When Priceline makes a reservation, a virtual credit card is created and the guest pays them directly, she said.
And to get the tax added, hotels have found they have to call Priceline, based in Norwalk, Conn., and request payment. Officials from Priceline did not return a request for comment.
In her investigation of the issue, Riddle said she found hoteliers will do one of four things:
- Accept the reservation as tax-exempt and not address the problem.
- Accept the reservation as tax-exempt and then forward the problem to the revenue manager.
- Stop taking Priceline reservations all together until Priceline corrects the problem and confirms the correction in writing.
- Attempt to collect the taxes from the guest upon arrival, but that has created “huge customer service issues, which most likely resulted in no tax collection.” Riddle’s email said.
“Knowing that a lot of other properties are just reopening in West Virginia, I wanted to know what you might suggest that we do to pursue a resolution to the problem,” said Riddle in the email shared with The Dominion Post. “One of my hoteliers contacted the West Virginia Secretary of State and the West Virginia Tax Department, and neither were aware of the situation nor we they able to do anything at this point.”
Hotel room occupancy typically runs at 60% in Visit Mountaineer Country. Because of the COVID-19 pandemic restrictions, people are not traveling as much and occupancy levels are hovering around 25%. This, in turn, has caused agencies, like the local CVB, to furlough staff and take voluntary pay cuts.
Ajay Aluri, assistant professor of Hospitality and Tourism Management at West Virginia University, said it is tough for hotels across the country to collect tax from online travel sites. He said the issue is not going away anytime soon.
“We live in a digital world and hotels should create demand. Convention and visitor bureaus should create demand,” said Aluri, adding online sites need to work with the hotel industry to find a common ground.
“There has to be give and take.”
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