Travel Industry News
Online Travel Cos See the Light
Wednesday, 09, June 2010
The past year has been challenging for online travel companies, such as Priceline.com (PCLN - Analyst Report), Expedia Inc. (EXPE - Analyst Report), Orbitz Worldwide (OWW - Snapshot Report) and Travelocity.On one hand, the recession impacted consumer purchasing power (both individual and corporate), which indirectly hurt the companies' business. On the other hand, local municipalities in the U.S. have been at their throats, trying to earn additional revenue in the form of occupancy tax.Occupancy tax matters have gone to court a number of times, with some cases decided in favor of the online travel companies and some decided against.
Both Priceline and Expedia have been called upon to pay occupancy tax pursuant to adverse rulings.While the situation did look extremely bleak for online travel companies, at present it appears that their voices have been heard.Just recently, courts in Philadelphia and Chicago have decided that occupancy tax claims by municipalities could not be made without due evidence of misdemeanor. The judges are increasingly of the opinion that original occupancy tax collection did not come under the purview of the judicial system.
