It is easy for the online travel agencies to erase room offerings from a relatively small municipality like Columbus, Ga., with its 3,200 hotel rooms, when a court rules that the OTAs need to pay occupancy taxes on the retail rate.
But, what happens if things don't go the OTAs' way on the hotel-tax front in a few large cities?
Although it is under appeal, a hearing officer in Anaheim, Calif., ruled that the OTAs owe the city around $21 million in back taxes.
So far, the OTAs are still booking merchant-hotel rooms in Anaheim.
Boycotting large cities in terms of no longer offering their rooms on OTA sites could be a bit more painful for the OTAs than erasing Columbus, Ga., from the OTA map.
Meanwhile, given their current strategy, the OTAs hope that Columbus, Ga., feels some hurt for dogging the OTAs' about room taxes.
Other than Columbus, Ga., and Anaheim, Calif., the OTAs have won the handful of hotel tax cases that have been decided on the merits, even as hundreds of states and municipalities pursue administrative tax remedies against the OTAs.
The OTAs are trying to minimize their tax exposure and are sending a message to other cities around the country that if they pursue lawsuits against the OTAs and prevail, it will come with a price.
The underlying message is: Go after us for taxes, then see what it's like to try to put those heads in beds on your own.
For now, the OTAs would rather lose some business around the edges than change their merchant-business model.
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