The American Hotel & Lodging Association is the industry’s voice in Washington, D.C., but we rely greatly on our state partners to keep us up to date on what is happening on the local level. Frequently issues begin to bubble up in states before they hit the national spotlight, so we thought we wrap up this year by taking a snapshot of the political landscape as seen by our Partner State Associations.
Local Lodging Taxes
Predictably, taxes seem to be of universal concern around the country. State and localities are running out of money and they are looking to make up for shortfalls wherever possible. Oftentimes, raiding areas such as convention and visitor bureaus is a band-aid to make it to the next fiscal year. To this point, jurisdictions in Ohio have floated the idea of using convention and visitor bureaus’ funds to close budget holes in other areas. In addition to using lodging funds for other purposes, cities and states are looking to raise taxes directly on hotels to ease budget deficits. For instance, Michigan is facing a 150 percent increase in room assessments. Similar concerns about increased lodging taxes can be seen in Ohio, Maryland, Florida, Massachusetts and many other states. The tax revenue that local jurisdictions count on is just not there and raising taxes on tourism-related activities is a popular, if shortsighted, solution.
Online Travel Tax
Missing tax revenue leads into the next prominent issue—local disputes with Online Travel Companies (OTC). While the lodging industry remits the taxes they collect from guests in full, OTCs choose to pay taxes on the wholesale rate at which they purchase discount rooms. States and localities see the difference in their coffers and many are taking action. In Maryland, Worcester County (Ocean City) and Baltimore City are suing the OTCs over room taxes, the Wyoming Department of Revenue has served notice that OTCs owe back taxes and the New York State Assembly proposed a tax on the charges added by OTCs to the price of hotel rooms. These are a just few examples, but it illustrates how a local issue has national importance.
Per Diems
The FY2011 Federal per diem rates saw an overall average daily rate decrease of 5.73 percent and were cited by many states as an issue of concern. Metropolitan areas such as Boston fear that substantially lower per diem rates for government officials may either generate a loss for a hotel or place the city as a whole at a competitive disadvantage compared to other metro areas. Similarly, the changes in per diem rates hit Maryland particularly hard due to the large concentration of military and government workers in the region.
Labor Issues
On the labor front, Wisconsin passed legislation that bars employers from requiring workers to attend a meeting on the employer’s perspective during union organizing. This is now being challenged in court. Maryland is dealing with new break time requirements for employees and the prospect of labor audits. North Carolina is facing mandated sick leave legislation and Massachusetts has seen a rise in discrimination cases filed by laid-off employees.
Unanticipated Blows to Tourism
This year saw unexpected issues arise such as the Arizona boycott and the BP oil spill. The Florida Restaurant & Lodging Association blunted the impact of the oil spill by having a person on the scene from the early days of the crisis. FLRA was able to serve as a source of information to decision makers to ensure that the industry’s interests were protected. This demonstrates that while it is hard to plan for emergencies, having a plan in place can make the most formidable challenges manageable.
These issues provide a good snapshot of the previous political year and an idea of what to expect when legislatures reconvene. Despite the difference in geography, many of the same issues arise across the country, and ultimately, in Washington, D.C. By working with our Partner State Associations, AH&LA can serve the industry both nationally and locally and make sure that hoteliers have the best possible environment to succeed
