Travel Weekly's Technology E-letter: May 30, 2007

MIAMI-DADE COUNTY QUIETLY NOTIFIED ONLINE TRAVEL COMPANIES in February that it would commence tax audits related to unremitted 6% hotel bed taxes, and in March sent them estimated tax assessments totaling almost $10 million for the past five years. For example, Expedia Inc.-related entities (including Expedia.com, Hotels.com, Hotwire and Travelnow) would owe the county more than $6 million through March 22. Companies with Travelport ties (Orbitz, Trip Network and Internet Publishing Corp./Lodging.com) could face a $1.4 million tax bill. Priceline.com and its Lowestfare.com unit would have to cough up about $1.1 million. Travelocity-related entities (Travelocity.com and World Choice Travel) might have to cut a check for about $825,000. Miami-Dade County Interim Tax Collector Fernando Casamayor said the county formulated its estimates after contacting major hotel chains in Miami-Dade County, figuring out the percentage of rooms sold by the various online travel companies, checking the rates on their Web sites and applying the tax over the past five years.

MEANWHILE, THE COUNTY'S AUDIT STRATEGY emerged after Miami-Dade voluntarily withdrew its lawsuit Jan. 18 against major online travel sellers. The county had been rebuffed a day earlier when a state court judge dismissed six of the seven counts in the suit. The estimated assessments came as many of the major online travel sellers face nearly 30 hotel tax lawsuits from cities, counties, CVBs and consumers around the country. The cities and counties allege they've been short-changed on hotel occupancy taxes because the defendants allegedly collected taxes on the retail rate but remitted taxes on the wholesale rates they got from hotels. The online travel businesses have consistently asserted that they did not collect taxes on the full retail rate for hotel rooms because they were not acting as agents of the hotels, they controlled no inventory and, thus, they were not subject to the full bed tax.   

JETBLUE AND EXPEDIA INC. entered into a five-year global partnership in which the low-cost carrier's published fares, schedules and inventory are available through Expedia-branded points of sale worldwide as well as Expedia Corporate Travel and Hotwire. The agreement marks JetBlue's first with an online travel agency, although the airline has been providing standalone air content to Travelocity.com without a formal agreement since September. The JetBlue inventory on Expedia-branded sites and ECT is -- or will be available, depending on the point of sale -- as air-only and as part of vacation packages, said Brett Cochran, JetBlue's manager of distribution and sales development. And, for Hotwire, JetBlue's published, and not opaque, fares are part of the mix, he said. Cochran noted that JetBlue inventory is available in all four GDSs, but there are pricing issues tied to technical shortcomings with the way the airline's reservations system, powered by Navitaire, communicates with the GDSs. Asked about any pricing or availability concerns related to JetBlue content, Expedia Inc. spokeswoman Katie Deines said the company offers JetBlue through the same "high-availability infrastructure and Expedia shopping technology that all of our carrier partners enjoy." She declined to specify which GDS or GDSs -- Worldspan, Sabre or Amadeus -- Expedia Inc. uses to access JetBlue.

SIDESTEP BUILT an application for Facebook, the social networking site, that enables Facebook users to enter information about upcoming trips and find like-minded souls who are venturing to the same destinations at the same time. In addition, the Trips application enables users to input information about trips on their wish lists and find people, potential friends, who want to journey with them. The application, built using Facebook's just-released developers' platform, doesn't have a direct tie-in to SideStep's travel search engine. However, one apparent tie-in is that Facebook COO Owen Van Natta several months ago became a SideStep board member.

SPECIAL NOTE: Beginning in July, the Technology E-letter will be published once a month, on the first Thursday of each month, beginning with the July 5 edition.

Technology Editor: Dennis Schaal

Phone: (201) 902-1904

[email protected]

For promotional opportunities in the E-letters, contact [email protected].

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