Travel Weekly's Technology E-letter: June 1, 2005

THE FIRST PROCEDURAL SKIRMISH over whether online agencies must remit hotel occupancy taxes on wholesale or retail rates took place last month in Superior Court in Los Angeles with the judge ordering discovery on several issues and scheduling the next hearing for Sept 14. In a suit brought by the City of Los Angeles, the defendants -- Priceline, Travelocity,, Expedia, Hotwire, Travelnow, Orbitz, Cheap Ticketsand Cendant -- argued that a city ordinance, amended in July to specify their requirement to pay hotel occupancy taxes on retail rates -- was improper because new taxes must be subject to public referendum. They also contended that their cases should be separated. Steven Wolens of Baron & Budd, which is a co-counsel representing the city, told that the defendants are required to pay tax on the retail rate because they fit the definition of "managing agent" under both the prior and amended law.

MEANWHILE, THE BUSINESS TRAVEL COALITION blasted the Los Angeles tax ordinance, saying it will hurt area tourism and increase administrative and compliance costs that ultimately will be borne by business travelers. Wolens noted the Los Angeles ordinance deals with hotel occupancy taxes and not hotel rates.

ORBITZ introduced group hotel booking in partnership with Group Travel Planet (GTP). From the Orbitz hotel page, consumers can select a Need 5 rooms or more?" option. They then are transferred to a co-branded Web site, where they can access discounted group rates from more than 10,000 properties in the U.S. and Canada, according to GTP. GTP said it has automated the group-booking process from both the consumer and supplier perspective. Regarding the latter, GTP automated the way that its hotel partners allocate inventory and enabled them, if they desire, to establish two rate tiers, one for five to nine rooms and another for 10 or more rooms, said CEO Scott Harness.

MEANWHILE, With the GTP agreement, Orbitz became the second major online agency to establish a group-booking feature. Earlier this year, Travelocity partnered with GTP rival Groople for group hotel bookings. Groople recently opened offices in Paris and Denver, and said it will soon introduce group-booking capabilities for air, car, cruise and rail.

KAYAK introduced what it called interim vacation package and cruise offerings. Both products display the search engines of individual suppliers rather than provide simultaneous comparison shopping. Travelzoo takes a similar approach with its SuperSearch for air and hotel, as does for all of its offerings. The Kayak cruise offering has search engines from Carnival Cruise Lines, Celebrity Cruises,, Hotwire and others. Kayaks vacation product displays search engines from Funjet Vacations, Discount Vacations, Sunburst Vacations,, Hotwire, Vacation Outlet and Liberty Travel. Users enter their itineraries, click on one of the search engines and are transported to that Web site to book.


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