What will this mean for the hotel industry? And for the OTA business model?

Online agencies lose hotel tax case to Washington, D.C.

“Washington, D.C., won a court ruling against online travel agencies (OTAs) over who’s responsible for millions of dollars in annual hotel taxes when rooms are booked through intermediaries.

The decision marks what may be the highest-profile legal victory for municipalities in the five-plus years that municipalities and the OTAs have been fighting over the issue.

Judge Craig Iscoe of the D.C. Superior Court wrote that the defendants are responsible for transient taxes on the gross amount collected for hotel rooms from customers, and not just on the net amount paid by OTAs to hotels.

The defendants were Expedia Inc. (comprising the Expedia, Hotwire, Hotels.com and Travelscape brands), Priceline, Travelocity and Orbitz, The four companies collectively account for more than 90% of U.S. travel sold through OTAs.”

For more information and to read the rest of the article, please visit Travel Weekly.

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