Heard on the Hill

More than 200 industry representatives spent a day on Capitol Hill on March 16 as part of this year’s American Hotel & Lodging Association Legislative Action Summit. While many of the issues the industry discussed with legislators are extensions of ongoing issues—occupancy taxes, the Employee Free Choice Act, and the Travel Promotion Act, to name some of the highlights—many of the legislators in Congress are new to some of these discussions. And that had many of the hoteliers and other industry members on hand welcoming the opportunity to bring industry concerns to the forefront.

“I think all of us can generally agree that having some balance back on the Hill is a good thing,” Arne Sorenson, president and chief operating officer of Marriott International Inc., told the audience. “We have so many important issues that are being wrestled with, and we think some of those are better addressed as bipartisan issues.”

“The outcome of the election was positive in that it allows us to put the importance on national issues rather than special interests,” added Nancy Johnson, executive vice president, select service hotels, at Carlson Hotels Worldwide and vice chair of AH&LA. “I think the business interests of creating jobs and helping the economy has to be of fair amount of interest to Capitol Hill.”

Many of the panelist at sessions held at the JW Marriott on March 15, the day before hoteliers made their way to the Hill, encouraged industry representatives to take to Capitol Hill ready to discuss the importance of the lodging industry to creating jobs and its overall contribution to the U.S. economy. To that end, hoteliers were prepared to discuss travel promotion and the opening up of more countries to the visa waiver program. (see Travel and Tourism.)

“Travel promotion is the single most important issue we can bring to the Hill. It means jobs and it means help for the economy,” Johnson said. “You have to look at it as a business. It’s a form of economic stimulus.”

Speakers at LAS reiterated the fact that the funding for the Corporation for Travel Promotion does not come from taxpayers, but from small fees paid by international travelers visiting the United States.

In addition, industry representatives were prepared to further discuss the ongoing battle to stave off what they call a stealth effort by online travel agencies (OTAs) to pass legislation designed to exempt OTAs from paying full amounts of local and state occupancy taxes based on retail rates.

OTAs have written draft legislation that pre-empts state and local tax authority and limits tax at a discounted rate, mandates traditional travel agents would enjoy preferential tax treatment, and specifically bans hotels from utilizing a new tax category. While the legislation, called the Internet Travel Tax Fairness Act (ITTFA), is still in draft form and not yet an actual bill, industry representatives on hand at LAS said that passage of such legislation would cost hotels more money in taxes and put hotels at a competitive disadvantage.

It’s a battle the lodging industry can’t afford to sit out, they said. “To say we are being outspent 100 to 1 by the OTAs on this issue is a tremendous understatement,” said Harvey Kellman, vice president and senior counsel for Marriott International Inc. “ITTFA really is the tipping point because it shifts the risk to us because the municipalities have made it clear that they are going to get their money and they will come after us. San Francisco has already won cases against hotels. Staying neutral is no longer an option for us. This will cost us a tremendous amount of money.”

“It’s not a actual piece of legislation yet and that makes it hard. We’re constantly playing hide and seek,” said Robert Smith, senior legislative advisor at Venable. “They can put this thing into a large bill. They’ve got the right friends in the right places to be able to do so.”