There are better options for economic development
Updated - Oct. 1, 2012
Yes, hotel owners are panic-stricken – hospitality profits are down in Seattle and everywhere else. But once again, Seattle ranks fifth among the 50 most-expensive cities for travelers, according to a highly publicized report. It’s the 2012 study by the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA).
“Business travel is a key driver of economic growth, but overly burdensome taxes on business travel can often do more harm than good, especially when those taxes unfairly target visitors,” said Joseph Bates, GBTA Foundation Vice President of research.
“Cities and states must think carefully about the sales that local businesses will lose because of the higher costs that travel taxes impose,” he asserts.
Cities are ranked according to taxes levied on travelers for car-rentals, hotel rooms, and meals in addition to the general sales tax.
Highest-combined single day travel taxes:
- Chicago — $40.31
- New York — $37.98
- Boston — $34.83
- Kansas City — $34.58
- Seattle — $34.43
Lowest combined single day travel taxes:
- Fort Lauderdale, Fla. $22.21
- Fort Myers, Fla. $22.21
- West Palm Beach, Fla. $22.21
- Detroit $22.37
- Portland, Ore. $22.45
Ironically, Seattle ranks among the most-expensive but is only the 15th-largest city in America.
“Tax rates that spike add another dimension for travel managers and local businesses. If spending one night in Chicago is 81 percent more expensive than visiting Ft. Lauderdale, for example, it can have an effect on where businesses decide to meet, hold events, and spend their travel dollars,” continued Bates.
The study provides several different views of travel taxes to help readers make informed choices.
The top 50 markets were ranked two ways:
1) By overall travel tax burden, including general sales tax and discriminatory travel taxes.
2) By discriminatory travel tax burden, excluding general sales taxes to count only taxes that target car rentals, hotel stays and meals. Discriminatory travel taxes are targeted at travelers or travel-related areas and go above the general sales tax.
To see the full report, visit the GBTA Foundation.
Over-taxing business travelers hurt Washington state’s tourism and business competitiveness. Job creation and economic health will not be enhanced.
Better ideas: Keep the taxes at reasonable rates to stimulate more business conventioneers and tourism. The higher revenue will keep businesses thriving and the extra tax revenue will reach government coffers.
How? Partner with the travel sector, for example, with Alaska Airlines to generate revenue with special travel programs. And a strong PR program will help. I’m sure skilled pro bono PR help is available in Seattle.
From the Coach’s Corner, for ideas to promote business and economic development in the Great Northwest, see this Biz Coach category: NW ECONOMIC DEVELOPMENT.
“The economy is bad. It’s so bad, third graders in China are being forced to take second jobs.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.