LEXINGTON, Ky. -- ARTA accused California of engaging in unfair
competition by allowing its Office of Tourism to take hotel
bookings from consumers on its toll-free telephone line and Web
In a letter to California Gov. Pete Wilson, ARTA president John
Hawks protested the program, calling it "a classic example of
unfair competition, where tax-funded public agencies engage in
commercial activities that duplicate similar services provided by
for-profit small businesses that pay those taxes."
In addition to writing Wilson, ARTA sent letters objecting to
the Office of Tourism's subcontract with the BASS call center and
WorldRes Internet service to John Poimiroo, state tourism director,
and to state legislators.
The association also said it will inform the National Federation
of Independent Business and other groups that are fighting against
unfair competition from the public sector.
"We expect state governments to focus on those things that
taxpayers can't usually do on their own, like operating school
systems and building roads. When states cross those lines and start
businesses that do the very same thing that for-profit small
businesses do already, that's called unfair competition."
Under the state's contract with BASS, consumers who call the
state's toll-free lines for general travel information are
connected to reservations agents who offer to book the California
properties that sign up for the free program. The hotels pay BASS a
10% commission; 1.5 percentage points go to the state's marketing
In the letter to Wilson, ARTA's Hawks said the service "will
cause agents to lose millions of dollars in potential sales because
they will never get the opportunity to inform consumers of the
services they provide, since they will never receive even an
initial phone call."